State Medicaid Program To Get Checkup Firms To Look Into How System Works As Cost-Cutting Measures Kick In

A team of national experts will examine Idaho’s fast-growing Medicaid program, to see what’s wrong and right with the huge system.

State lawmakers this year ordered cost savings in the program, which funds health care for Idaho’s poorest and disabled residents, because they were alarmed by soaring costs. Medicaid is paid for by the state and federal government, with the state paying 30 percent.

“Last session, the problem we had is we did not really know the real facts,” said Sen. Marguerite McLaughlin, D-Orofino.

McLaughlin chairs the Joint Legislative Oversight Committee, which voted unanimously Monday to hire two firms to conduct the study. It’ll be done by early December, in time for next year’s legislative session.

“I think it’ll give us a lot of information, and we can go from there,” McLaughlin said.

In the meantime, the Department of Health and Welfare is moving ahead with plans to comply with the Legislature’s cost-saving orders.

“We knew that we had to do something,” said Health and Welfare Director Karl Kurtz.

The $600,000 study that begins this week will give Health and Welfare “another tool,” Kurtz said. “Our overall goal is how do we serve those individuals that qualify for service, and have a cost-effective program?”

The study was one of a long list of proposals from lawmakers this year that sparked an outcry among Medicaid providers, recipients and their families.

Because the proposals came through the Legislature’s budget committee, they weren’t subject to public hearings. Disabled people who worried they would lose essential services converged on the state Capitol and Health & Welfare offices to protest, angering lawmakers who said they planned no cuts - just slowdowns in spending increases.

Gov. Dirk Kempthorne prompted the move by proposing a budget for Health and Welfare $39million below the department’s request, relying on unspecified “efficiencies” to make up the difference.

That left the decisions to the Legislature. By the time the dust settled, many of the proposed cutbacks had been scaled back, but Health and Welfare still has 13 cost-saving measures to put in place by Jan. 1. On July 1, when the new budget year starts, several types of services will be frozen at the previous year’s spending level, including medical transportation, medical equipment such as wheelchairs and crutches, and payments for beds in intermediate-care facilities for the mentally retarded.

Fewer physical therapy visits will be allowed. By November, the department plans to begin charging a small co-payment for many Medicaid services, and by Jan. 1, it will start its new pre-authorization and review program for services for the developmentally disabled and mentally ill.

Health and Welfare just wrapped up more than a dozen public hearings around the state on the pre-authorization idea.

The hundreds of Medicaid clients, service providers, family members and others who attended the meetings weren’t asked if the changes should happen. They were asked how they should happen.

“We said, `Here’s what we have to do, this is what the Legislature said we had to do. Now in light of that, how do we implement this?”’ said department spokesman Ross Mason.

By a 2-1 margin, people at the meetings and those who filled out surveys wanted private contractors to do the prior authorizations, rather than department staffers, and a 3-2 margin favored a decentralized rather than centralized approach.

When folks were asked how to improve Medicaid, they consistently said to make it more efficient and consistent; improve communication; streamline it with less paperwork and simpler forms; do better quality control; and hire more and betterqualified workers.

“Medicaid costs are increasing, there’s no two ways about that,” Mason said. “What we’ve tried to do is eliminate duplication and unnecessary services.”

Mason said that without prior reviews, Health and Welfare could only “rubber-stamp” the idea of giving a particular service to a patient. By “being a little more careful,” patients will still get needed services without waste or duplication, he said.

At the same time that Health and Welfare was holding its public meetings, the state Office of Performance Evaluations contracted for focus group meetings around the state to help determine how it should approach studying Medicaid.

Then, after a national search, it selected two consulting firms. One, Sjoberg Evashenk Consulting, is headed by the former California state auditor and his chief deputy, and has a staff of auditors experienced at examining government agencies.

The other, the Lewin Group of Washington, D.C., is headed by Chuck Milligan, a respected authority on Medicaid and former Medicaid director for the state of New Mexico.

Milligan said the team will look at every aspect of Medicaid services and spending in Idaho, including how Idaho’s program is set up and administered. It will examine the department’s contracts, check into people’s fears that they might lose needed services, and look at whether Idaho is getting all the federal funds it should.

The team began meeting with department staff last week. “They are very open to this,” said Milligan, who holds advanced degrees from Harvard and the University of California-Berkeley.

Kurtz said, “I think it’s going to give us an independent look at Idaho’s Medicaid program, how does it stack up against other states, benefits, costs.”

Any number of changes could be proposed, he said.

“We’re just looking forward to getting started.”