After years of relentless growth, Idaho lawmakers received a budget request for the state’s Medicaid program Tuesday that’s nearly flat in state funds, and just a 7.6 percent increase overall - even though the program is expected to add roughly 70,000 new recipients next year due to changes in federal laws. You can read my full story here at spokesman.com. The slower growth is mainly because Idaho’s caseload numbers in the health care program for the poor and disabled have stopped climbing so quickly as the state’s come out of the recession; it’s also because federal funds are up, meaning the state can spend less. Idaho’s federal matching rate for next year is going up, to the tune of $11.8 million.

It also in part reflects an overfunding of the program last year, when more growth was anticipated than actually came through. That prompted the program to turn back $46 million to the state general fund unused; officials say a new claims system is now allowing more accurate forecasts.

Sen. Shawn Keough, R-Sandpoint, vice-chair of the Joint Finance-Appropriations Committee, welcomed the slowing in the program’s growth, but cautioned, “The devil’s always in the details.” She said, “My focus tends to be less on the numbers, and more on the delivery of services to those who need it.”

Gov. Butch Otter's Medicaid expansion working group is receiving a report from consulting group  Milliman this morning on the potential impacts to the state. “On a purely financial basis, it would make sense to expand,” Justin Birrell of Milliman told the working group. “You save $6.5 million if you expand. It would cost you $284 million if you don't.” That's over a 10-1/2 year period starting in the second half of state fiscal year 2014. Added the firm's Ben Diederich, “The state and local offsets are what's very unique to Idaho.”

That's because of how Idaho currently funds health care for the indigent; through the state's medical indigency/Catastrophic Health Care program, the money comes entirely from the state general fund and from local property tax money. This afternoon, the working group is scheduled to decide on its recommendation to Otter on what the state should do; under the national health care reform law, states have the option of expanding their Medicaid programs largely at federal expense.

The Idaho Legislature's Health Care Task Force, a joint committee of 14 senators and representatives, is hearing updates this morning on the progress of two working groups looking into how Idaho should proceed under the national health care reform law on two fronts: A health insurance exchange, and expansion of Medicaid. State Insurance Director Bill Deal told the lawmakers that the exchange working group will hold its final meeting this Friday, and will settle on its report and recommendations to Gov. Butch Otter on how to proceed.

State Health & Welfare Director Dick Armstrong told the task force that the Medicaid expansion working group is working through three options: Don't expand Medicaid and keep Idaho's current medical indigency/catastrophic health care fund as-is; don't expand Medicaid and revise the CAT fund system; or expand Medicaid. The no-change option would lead to very fast-growing costs both for the state and for county property taxpayers, Armstrong said. Forecasts show county costs would rise from $29.6 million a year today to $39.6 million a year in 2020, and state costs to the state's general fund from $39 million this year to $52.5 million in 2020.

Revising the CAT program likely would save only about 2 percent on costs, he said, with a new, standardized claims-processing system costing between $1.5 million and $3.5 million. Medicaid expansion, combined with other expected increases in Medicaid, would push Idaho's Medicaid program from the current 229,000 participants to an estimated 453,000 in 2020. Costs would be almost entirely borne by the federal government, though Armstrong warned that that could change in the future if federal policies change.

Sen. Dan Schmidt, D-Moscow, said the three options don't include one he's been hearing questions about when he goes door-to-door campaigning for re-election: Don't expand Medicaid and eliminate the CAT program, and just say Idaho won't pay for indigent people's medical costs. “Could the state of Idaho just say we're not going to pay for indigent health care?” Schmidt asked. “People argue that that's something we should consider.”

Armstrong responded, “Well, then the bad debt would fall on the hospitals and the providers. My first-blush guess is all of us that pay for our own hospital care through insurance, that difference would be immediately transferred. It would be an immediate cost shift to anybody and everybody that's paying for health care - they would have no choice.” He added, “It would mean all of the dollars would then end up moving to another pocket.”

As the governor's Medicaid working group wrapped up its meeting today, Idaho Health & Welfare Director Dick Armstrong said it was “nice to hear such agreement on many of these principles - that's very encouraging.” He said he'll work on “simple graphic illustrations of costs and impacts” to bring to the panel at its next meeting Oct. 23rd. “I believe we have added to our information base and understanding,” he said, including today's point that administrative costs of the current county medical indigency system haven't yet been included in cost estimates. “We're going to try to put a dollar savings to that, so that was a good find today,” he said. The next meeting may be the group's final one, Armstrong said, but it'll reserve a date for an additional meeting just in case. “It depends on what happens with the November election - we may be back,” he said.

Members of the governor's Medicaid expansion working group are now each sharing “guiding principles” they want to see help guide the panel's future decision on how to proceed. Rep. Fred Wood, R-Burley, a physician, said the group needs clear, easily understood graphics comparing the costs of each option. “If we really believe that it's going to cost us less in the future, we have to be able to show that,” he said. He said there's concern about “creating an adverse business environment in the state of Idaho because we won't expand Medicaid,” to the point that a business considering relocating to the state might say, “Wait a minute, you want me to come to the state of Idaho and pick up a part of your indigent care? We're not coming.”

Susie Pouliot of the Idaho Medical Association said the IMA physicians took a policy position in July in favor of expanding Medicaid in Idaho. She said their hope was not only to get patients into “the appropriate care … at a more appropriate cost,” but also to make the move part of a transformation of health care in Idaho, into a more managed-care type environment, with a medical home model, with community care networks, so that “coordination and transitions are managed in a way that produces good health results.”

Sen. Patti Anne Lodge, R-Huston, said this summer she's received more letters, emails and personal contacts than ever before in a campaign season, and they're on this issue. Lodge said many of her constituents are telling her “they don't like Obamacare and they don't want anything that has anything to do with it,” and it's challenging to explain to them the issues involved. “We are not doing a good enough job … to show the taxpayers and the citizenry what the costs are going to be,” she said.

Gooding County Commissioner Tom Faulkner said, “I think we do want to make the point that we want to promote a strong business environment by minimizing the taxes and the costs to the citizens of the state. That is a big deal.” He added, “Part of the problem with our health care is our providers are going through the roof with the costs … just because they could get away with charging us whatever they want to charge us.”

Dan Chadwick, head of the Idaho Association of Counties, said of the existing medical indigency program, “They're unsustainable numbers. We cannot afford those any longer. And those same people that are going to the county now for assistance are the ones that are paying those increased property taxes or state taxes.” He said the current system “puts incredible pressure on county governments trying to keep up with those costs, simply because they're not predictable.”

Mike Baker of the Idaho Primary Care Association is now briefing the governor's Medicaid working group on Option 3: Expanding Medicaid in Idaho. “You look at the numbers, and this thing, this problem is just ginormous,” he told the panel. But, he noted, “We're paying for a lot of these things right now. They're coming out of inefficient systems, they're probably being paid at higher rates. … I don't think we're working as smart as we could.”

He noted a reference earlier in the day to Idaho's medical indigency program as a type of “debtors' prison.” “There's funding available to help these folks in our community access the care that they need, and it's up to us to figure out how do we utilize what we're paying now … to cover the gap,” Baker said. “There are all these holes in the system.”

He said, “We all know at the end of the day we're going to have some folks that fall through the holes, no matter what program we put together, but the goal here is to reduce the number of people falling through those cracks. … reduce the cost of their care … and stop requiring other folks in the community” to cover the costs through cost-shifting.

Baker, who noted that he sees patients who are part of this population every day at the Kootenai County community health center where he works, said, “This really can work, and get us closer to the day where we can say, 'Access to health care is not a problem.'” He said, “We have 65 percent of patients in our clinic are uninsured.”

He shared data that for Idaho's mentally ill patients, 95 percent could be shifted to an expanded Medicaid, saving $11 million in state general funds. About 75 percent of AIDS Drug Assistance Program clients would qualify for the Medicaid expansion, saving the state about $800,000. Shifting the uninsured population from the state's indigency program to Medicaid would save millions both for the state and for county property taxpayers. “We know cost-shifting is occurring,” Baker said. “This should be a no-brainer decision.”

He told the panel, “If your neighbor is healthy and they're able to work, your community starts getting better.”

Idaho Association of Counties head Dan Chadwick briefed the governor's Medicaid expansion working group on what's been designated Option 2 - Don't expand Medicaid, but redesign Idaho's medical indigency program. “I've talked to my peers around the country and they all scratch their heads,” Chadwick said. “There is no other state that does it the way we do it.”

He said there's no simple way to redesign Idaho's program - he describes it as a “scraper,” that would have to be scrapped and a new system developed from scratch. Possible elements of redesign could include standardizing claims processing and expanding utilization management and medical review, he said. But possible savings would be difficult to estimate - perhaps coming to 2 percent from efficiencies. Because the indigency program is incident-based, not eligibility-based - meaning a person is eligible for benefits only if their medical bills from a particular incident are more than they could pay off in five years - it's very difficult to predict costs, because there's no way to know when someone will get sick or be in an accident. “It's a really unique system,” Chadwick said.

“I don't think anyone think there is a silver bullet or a magic wand that's going to change this program,” Chadwick said. “Many of the providers and the counties really don't like this system. I think we'd all be happy to see it go away. … It's a difficult system to administer, and we don't know even where to start in terms of capturing the administrative costs for this.” You can read my full story here on the program, from the Sept. 9 Spokesman-Review.

The working group is now headed on a lunch break, and will discuss Option 3 - expanding Medicaid - when it reconvenes at 1:15.

Discussing the first option before the Medicaid expansion working group today - no expansion of Medicaid, and no change to the current medical indigency program - state Health & Welfare Director Dick Armstrong noted, “Clearly no expansion … does not mean no work. There's a significant amount of effort that has to take place.” The current indigency program is facing fast-rising costs, he noted, with a significant offsetter of costs, the pre-existing conditions insurance program, or PCIP, expiring in 2014. Current estimates show the indigency program, now at roughly $60 million a year between state and county taxpayer funds, would rise to $92.2 million by 2020.

Armstrong said those estimates are conservative, particularly because Idaho's household income has fallen for the last three years, even as inflation has continued. “So households today simply are not able to support themselves as they have in the past.”

Sen. Dan Schmidt, D-Moscow, a physician, asked if those figures include administrative costs, and the answer was no. “These are the direct benefits paid, and not any of the administrative costs,” said Dan Chadwick, head of the Idaho Association of Counties. Armstrong said, “That's a great question. Right now, there are approximately 100 county employees engaged in this process of indigency, and that's a cost we have not thought about until just recently, and needs to be folded into some of these other scenarios.” Administrative costs include everything from processing applications to placing liens on applicants' property and collecting on those liens, when possible, to offset benefits paid out. Hospitals, too, are facing significant administrative costs for participating in the program, said Steve Millard of the Idaho Hospital Association.

Chadwick said, “Fifty-three hearings are being held today on indigent claims in our neighboring county. That includes hospital staff, county staff, attorneys, county commissioners, sitting there listening to all these claims. That's a whole lot of time and effort putting in for just one day. It's a big deal. It's a large cost.”


Armstrong noted, “Sixty percent of the cases that come before the counties are not accepted.” Millard said, “The costs don't go away, just because the state doesn't pay for them, or the indigent program doesn't pay for them.” Unreimbursed costs drive up premiums and costs for everyone, he said.

Three options are up for examination at the governor's Medicaid expansion working group's all-day meeting today: Don't expand Medicaid and keep Idaho's current medical indigency/Catastrophic Health Care Fund program as-is; Don't expand Medicaid and redesign the existing indigency/CAT program; and the third option: Expand Medicaid. The population currently served by the state-county indigency program would virtually all be covered by a Medicaid expansion, which would be largely federally funded; the current CAT program is funded entirely with local property taxpayer and state general tax funds, to the tune of roughly $60 million a year.

Though each of the three options will be explored today, the panel won't pick one; that'll come later. First, today, the group is hearing a presentation on the Leavitt Partners report on the potentially eligible population. Still in the works is a report from Milliman, another consulting group, on the costs of each of the options. The working group will meet again Oct. 23 to get the numbers from the Milliman report.

State Health & Welfare Director Dick Armstrong asked the working group members to keep in mind the advantages and disadvantages of all three options today. Pros and cons of each option will be recorded and put into a spreadsheet for review. When those considerations plus the numbers from the Milliman report are before the working group, Armstrong said, “We will then be moving to recommendations.”

Gov. Butch Otter's Medicaid expansion working group meets today from 9 to 3 p.m. at the state capitol, to hear a presentation on a newly completed study and discuss Idaho's options on a possible Medicaid expansion. You can listen live here, and see the agenda here.

Every Tuesday morning at 9, they file in, some crying, some defiant - all with big medical bills they can't pay, pleading with Kootenai County commissioners for help. “It's at times frustrating, and at times gut-wrenching,” said Commissioner Dan Green, “especially when I have people that really need the help and then they don't qualify for the program, and then I see people that we are forced to help that think it's some sort of entitlement.” The scene is repeated in each of Idaho's 44 counties, which state law makes the last resort for uninsured patients who can't pay their medical bills.
 
Idaho's unique system for paying the catastrophic medical bills of indigent patients - which relies solely on local property taxes and the state's general fund - may make it the state that would benefit the most from the expansion of Medicaid under the federal Affordable Care Act, which would expand the federal-state medical insurance program for the poor to cover the same population that now is thrown on the mercy of county commissioners - and do it almost entirely with federal funds.

If Idaho were to replace its current system with a Medicaid expansion, the state and its county property taxpayers could save hundreds of millions of dollars over the next six years, according to a Spokesman-Review analysis of current and projected costs. But some prominent Idaho politicians already have come out against the move, saying they want no part of “Obamacare.” You can read my full story here from Sunday's Spokesman-Review.

Three guardians for developmentally disabled Idaho residents have dropped their lawsuit against the state over Medicaid changes, reports AP reporter Rebecca Boone; click below for her full report. The attorney for the group said the shift to a single provider of residential habilitation services for such patients statewide will result in more work for law enforcement and emergency rooms.

A group of severely disabled Idahoans is suing the state after the Idaho Department of Health & Welfare cut their Medicaid benefits by as much as 40 percent, then refused to tell them why, saying its formula for the benefits is a “trade secret,” and therefore exempt from release under the Idaho Public Records Law, the AP reports; the secrecy makes it nearly impossible for the patients to appeal the decisions. Click below for a full report from AP reporter Rebecca Boone.

Idaho is docking its payment to a Medicaid claim processing company, Molina Medicaid Systems, by $3 million because of the major problems the company had implementing its new system last year, the Associated Press reports; meanwhile, the state is still trying to recover nearly $10 million in double payments that were made to Medicaid-covered health care providers amid the chaos. Nevertheless, the state says Molina is improving and has made progress toward fixing the problems. Click below for a full report from AP reporter Rebecca Boone.

Gov. Butch Otter took to the national airwaves last night, in a phone interview with Fox News' Greta Van Susteren, touting Idaho's budget management as a “model for what the nation ought to do.” Otter noted Idaho's recently upgraded credit rating of AA+, the same level to which the national debt was just downgraded by Standard and Poor's, from AAA. “Idaho, obviously, with our upgrade, we went to AA+ while the nation was coming down, because we balanced our budget, we saved money when we had a surplus, and we didn't spend more money than we had during the economic crisis,” Otter said.

He also called for cuts in entitlement programs, touting Idaho's Medicaid cuts as a success story and recalling the “soul-crushing tyranny of entitlement” line he used in his last State of the State message. “There wasn't anybody thrown out in the streets,” Otter told Van Susteren. “People became more responsible for their own needs. And when they had to share the cost when there was co-pay for some of the entitlements they were getting, then they were more judicious in how they spent that money. The second thing that happened was churches and the rest of the community said we can help a little, but you have to help yourself.” Click below for a transcript of the interview provided by the program, “On the Record with Greta Van Susteren.”

Idaho cut $34 million from its Medicaid program this year, including new co-payment requirements, big new assessments on hospitals and other care providers, and trims in provider reimbursements. There were also cuts to services: More than 42,000 poor or disabled Idahoans lost their non-emergency dental coverage on July 1; dozens of patients are being discharged from nursing homes to home-based care; treatments like chiropractic care, podiatry, vision coverage and hearing aids were cut; and the state is revising programs to move to more of a managed-care approach. A federal lawsuit has halted one move, to a single residential habilitation agency for developmentally disabled patients in certified family homes, that would have driven dozens of existing agencies out of business and drastically reduced oversight of the treatment of those patients.

A judge says Idaho can't switch to just one provider for some types of Medicaid services for the developmentally disabled until the Centers for Medicare and Medicaid Services decides whether the practice complies with federal law, the Associated Press reports. The decision from U.S. District Judge B. Lynn Winmill was handed down Thursday — just one day before the state's contract with Community Partnerships of Idaho was to go into effect. The ruling keeps dozens of other residential habilitation companies across Idaho in business, at least for now; click below for a full report from AP reporter Rebecca Boone.

Two men with developmental disabilities and their guardians are suing the state over a recent money-changing change to Idaho's Medicaid program, saying the state is violating their right to freely choose providers, the Associated Press reports. The two are seeking class-action status on behalf of all residents of Medicaid-covered certified family homes in Idaho. Idaho decided this year to contract with just one agency, rather than dozens, to oversee the state's 1,800 certified family homes; the move is expected to save the state $800,000, though it also means far fewer inspections of the homes and other changes. Click below for a full report from AP reporter Rebecca Boone.

More than 42,000 poor or disabled Idahoans lost their non-emergency dental coverage last Friday due to state budget cuts, and there's some question about whether the state's expected $1.7 million in annual savings really will pay off in the long run. “Some of this stuff, if you don't take care of it at a certain level, then it gets worse, so it can cost a lot more,” said Dr. Jack Fullwiler, a longtime Coeur d'Alene dentist and current president of the Idaho State Dental Association.

Washington made a similar cut six months ago, but it exempted patients with developmental disabilities and those in long-term care from the cuts. In Idaho, all adults on Medicaid will lose non-emergency dental coverage except pregnant women. Fullwiler said Idaho dentists actually were relieved that the cuts didn't go even further. “At least we got the emergency programs for the adults,” he said.

In 2002, Idaho briefly eliminated non-emergency adult dental coverage under Medicaid as part of budget cutbacks, prompting a statewide outcry after an elderly woman who was denied dentures was told she'd have to gum her food; then-Gov. Dirk Kempthorne and the Legislature restored the benefit the following year. Now, Fullwiler said, “I know they're not going to pay for dentures. They're going to pay for toothaches, basically.” You can read my full story here at spokesman.com.

Here’s a link to my full story at spokesman.com on how Idaho’s Medicaid program is facing such a big potential shortfall next year that officials are suggesting turning to volunteers to help out the disabled and poor who now rely on its services. State Health and Welfare Director Dick Armstrong told state lawmakers today that back in the 1950s and 1960s, volunteers performed many services that Medicaid provides today - and perhaps they could be recruited again, for everything from driving disabled people to doctor’s appointments to checking on whether mentally ill patients have taken their medication. “I think it’s a good idea,” said Sen. Joyce Broadsword, R-Sagle, the vice-chair of the Senate Health & Welfare Committee. “That’s part of helping our community as a whole. If we don’t all pull together, we have less opportunity to come out of this as a healthy state.” Rep. George Eskridge, R-Dover, said, “I think there’s some merit there. We all have an obligation to help our fellow citizens - it’s not all a state responsibility. I’m intrigued by his comment and hope there’ll be some ways we’re able to pursue that.”

Idaho’s Medicaid program is projecting a $42.3 million shortfall in the current year, in state general funds. Last year, the program pushed $89.4 million in bills into the current fiscal year – leaving providers waiting from three weeks to three months for payment – in order to balance next year’s budget. But if that were tried again, state Health & Welfare Director Dick Armstrong told legislative budget writers this morning, the delayed payments would then fall under the reduced federal matching rate that Idaho will see next year.

“That doesn’t mean it might not be a good strategy, but it has a significant cost attached to it that we didn’t face last year,” he told JFAC.

Looking ahead, Idaho’s facing a projected state fund shortfall for Medicaid in fiscal year 2012 of $171.6 million. That’s a huge hole, and Armstrong said it’ll likely mean cutting services. Children are protected, so “we would have to focus on adult services – that’s where we’d have to go. We would have to eliminate major categories of service.” Armstrong said “every state in the nation” is looking at the same “Draconian” type of cuts.

One suggestion he offered to cope with the crisis: Back in the ‘50s and ‘60s, there was much more use of volunteers in providing services to the disabled and others. Idaho could “see if there could be a resurgence of voluntary assistance, specifically around keeping adults stable in the home environment,” Armstrong said.