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Numbers come out on Medicaid shortfall for FY2012-13

Medicaid program staff released updated estimates of the current year’s Medicaid state funding shortfall as well as their estimate of next year’s shortfall at the monthly meeting of the Medical Care Advisory Committee. As has been reported elsewhere, the recent court order reinstating coverage of personal care services for adults with disabilities, the Division of Medical Assistance added $9.4 million in estimated expenses into the current year’s budget, driving the current year shortfall up to $149 million.

Next year’s estimated shortfall of $243 million will be driven by many of the same factors that created this year’s problem, according to DMA Chief Business Operating Officer Steve Owen. The legislature’s double-cut to program inflation – a measure built on expectations about changes to Medicaid that are beyond state administration’s control, such as federal changes and provider costs – shows up yet again as a confounding factor in an already cash-strapped budget.

The Medical Care Advisory Committee remains opposed to across-the-board provider reimbursement rate reductions, despite the fact that there are few budget reductions options beyond provider cuts left within the executive branch’s purview. Owen reminded attendees that states cannot run deficits and that DMA is working closely with OSBM to identify a solution that, presumably, won’t require legislative action.

As one committee member asked, what happens next? The answer: no one knows.

4 Comments


  1. Frances Jenkins

    January 20, 2012 at 5:29 pm

    I understand why Cansler resigned. You must admit this problem was caused by the Democrats.

  2. Alex

    January 21, 2012 at 9:06 am

    The number I would be worried about is the $ 2.7 BILLION that we owe the Feds on unemployment borrowing that is now increasing every week.I think we have the 3rd largest debt of all the states.

  3. Charlie

    January 22, 2012 at 10:24 am

    Perhaps the thing that bothers me the most about the Medicaid shortfall is this… Why, with these enormous Medicaid budget shortfalls, is the State continuing to move forward with the implementation of Medicaid waiver MCOs (LMEs). Per the June 2010 LME find balance report, the LMEs that reported their fund balances cumulatively held over $600,000,000.00. That’s way more than enough to cover the Medicaid budget shortfall for this year and the next. In addition, the LME system creates a layer of pure administration that did not previously exist. This will have to be funded on an annual basis for the foreseeable future. With behavioral health service providers falling like flies across the State, it would stand to reason that the allocation of funds by the LMEs for these services would decrease. But where are those funds? Where are the saved medicaid dollars touted by Medicaid Waiver proponents? Sitting in the LME fund balances. Perhaps PBH did desperately need a $10,000,000.00 administrative complex… I’d venture to say though, that Medicaid recipients needed treatment more.

  4. Alex

    January 23, 2012 at 8:31 am

    Charlie is exactly right on the LME’s. They run up a lot of administration expense, and do very little to enhance mental health services. Many of the directors, like the one in Durham , make over a $100,000 a year with very limited responsibilities, and usually get their job through political connections.

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