Administrative costs to administer Medicaid programs between states are hard to compare because states have so many different ways of paying for care to be delivered to Medicaid patients. This hasn’t stopped NC Governor McCrory from justifying his decision to reject federal money for Medicaid by saying NC’s Medicaid administrative costs are much higher than in other states.
But this is contradicted by Carol Steckel, Republican Governor McCrory’s newly-appointed Medicaid director, who testified recently to a legislative committee regarding the issue of comparing NC Medicaid administrative costs to administrative costs in other states.
The NC Medicaid audit being discussed at the meeting claimed that NC’s cited 6.3% administrative costs were much higher than the 1.73% figure cited for Arizona’s Medicaid administrative costs. Steckel, when asked about this figure, said this comparison was simply not accurate. Why? Because Arizona puts all its Medicaid patients into privately-run managed care health insurance plans. North Carolina doesn’t put any Medicaid patients into privately-run managed care plans and instead runs its own statewide managed care program, Community Care. The figure for Arizona’s administrative costs does not include the administrative costs of the privately-run managed care plans.
As Steckel explained: “The administrative cost functions are in the managed care entities…if you look at that for Arizona, their administrative costs would actually be 13.74%”
So, saying that NC’s Medicaid administrative costs are higher than comparison states like Arizona is inaccurate when states NC is compared to have some or all of their Medicaid patients in private managed care plans. As Steckel ended her testimony on this issue:
We have a saying in Medicaid: If you look at one state you see one state.