Governor Beverly Perdue’s Budget Director, Andy Willis, testified before the Joint Legislative Oversight Committee on Government Operations during a meeting dedicated to the Medicaid budget. Mr. Willis reported that money would run short at the end of this month but that DHHS had found $45 million within their state appropriation to continue to reimburse for services until the NCGA reconvenes on May 16.
Senator Pete Brunstetter (R-Forsyth), one of the Appropriations Chairs for the North Carolina Senate said, “This is something that we are going to have to address quickly, in the first few days when we return in May.”
The problem that he refers to is a limitation in the DHHS Budget that says the department must balance within its’ own budget. That provision essentially means that no money can be shifted from any other general funds (i.e., Transportation, the Rainy Day Fund) to balance Medicaid. The provision was included by budget writers in part because of a history of problems like this where overspending required the State Office of Budget Management to redirect additional general fund dollars to cover Medicaid overages.
Even with the various overages experienced this year, Medicaid is within three percent of the budgeted target for the roughly $12 billion program, of which the state funds about $3.4 billion. Many legislators agree that is a significant improvement over previous years. Lawmakers continue to look for ways to better predict these health care expenditures, which is difficult because of varying enrollment, fluctuating utilization and additional burdens steadily flowing down from the Federal Government due in part to the health reform law.
Your NCMS continues to work with legislators and other health care partners to identify savings opportunities without jeopardizing access to care for your Medicaid patients or payment reductions. While lawmakers still view rate cuts as a possible solution, Wednesday’s conversation revealed that this initial budget problem would be handled with money from other sources in the state budget. At the same time, we will be facing budget corrections for the remaining biennium budget year.
Watch the Bulletin and other action alerts for opportunities to communicate with your legislators about this issue in the coming month.