North Carolina’s Medical Care Advisory Committee (MCAC) met at NC State University this morning at the behest of Gov. Perdue and DHHS Secretary Lanier Cansler to discuss how the agency will implement the legislative budget’s unprecedentedly deep cuts to the Medicaid program. Members of the committee have been asked to work with DHHS leadership and staff to determine how best to further cut the state’s share of Medicaid spending while upholding the department’s Division of Medical Assistance (DMA) commitment to “us(e) the power of the Medicaid program to improve the standard of care across North Carolina.”
Unfortunately for members of the committee, many of whom are themselves direct care providers, there’s clearly no way to meet the budget requirements set forth by the legislature without eliminating Medicaid services that are known to improve health outcomes while saving money, like adult dental care and community-based mental health services. Of the $354 million in Medicaid cuts made in the legislative budget for FY2012, DMA has identified about $236 million that can be saved via program changes and reductions within DHHS authority, leaving a “gap” of $118 to $168 million in legislative budget cuts that still must be made.
Identifying and prioritizing the exact nature and depth of Medicaid cuts needed to fill this sizeable budget gap now lies in the hands of the MCAC. It’s not an enviable task. The list of “options” for cuts presented to the committee for consideration, in no particular order, included:
- Rate reductions
- Further service modifications
- Additional waivers
- Elimination of “optional” services (i.e., adult dental care, in-home care, mental health, hospice)
- Expansion of assessment programs
- Expansion of sub-capitated services (i.e., cardiac imaging)
From a purely financial standpoint, none of these “options” are sure to meet federal approval; for example, the Centers on Medicaid and Medicare Services (CMS) which oversee all state Medicaid programs are currently reluctant to green-light further rate reductions for Medicaid providers due to concerns about access to care. Similarly, elimination of optional services cannot be done without approval from CMS, which can take upwards of 6 months to obtain if not longer due to legal and procedural requirements.
DHHS made it clear that the “options” presented are for the purpose of meeting a budget target, but not for developing a sustainable, rational system of care. In this case, DHHS sits between a rock and a hard place, struggling to balance competing, if not conflicting, goals of quality care provision, adequacy, and budgetary austerity.
The committee will meet again in September, at which point discussions on exactly what to cut are expected to begin in earnest.