Friday evening WRAL covered my Preliminary Injunction hearing at the Office of Administrative Hearings (OAH).
On October 21, 2013, the magazine Modern Healthcare published an article, “Medicaid budgets By State,” which showed each state’s total Medicaid spent in 2012, total number of Medicaid enrollees in 2012, and average spending per enrollee in 2012.
Where does North Carolina rank in terms of our Medicaid budget versus other states? We hear constantly that we spend all this needless money on administrative costs of Medicaid. But, in terms of our Medicaid budget, where do we rank? And my next question…do we simply have more Medicaid recipients in NC in relation to other states? Is NC’s average spending per Medicaid enrollee grossly higher or lower than the national average?
Inquiring minds want to know!
Surprisingly, at least to me, Alaska has the highest average spending per Medicaid enrollee: $13,073, on average, per enrollee. But then I thought about, much of Alaska is rural…not only rural , but almost impossible to navigate due to the snow and ice. I don’t know for sure, but I would imagine that getting to and from Medicaid recipients or getting recipients to services (while not always reimbursed by Medicaid) must impact some of the costs.
[Important to note: The average spending per enrollee, to my knowledge, does not mean actual money spent per enrollee. I believe the authors took the total budget and divided it by the number of enrollees. So the average spent per enrollee includes built-in, administrative costs.]
Or…Maybe Alaska has a low number of Medicaid recipients and that is why Alaska spends the most per enrollee…maybe Alaska has a huge Medicaid budget without many recipients on which to spend it…few people, big pie…
Alaska had, in 2012, 109,000 Medicaid recipients.
The fewer people you have at Thanksgiving, the bigger the pie pieces. However, interestingly enough, Alaska spent $1.425 million total in Medicaid in 2012. Delaware spent $1.421 in Medicaid in 2012. (Close enough, right?). Yet, Delaware spent $6831, on average, per enrollee. Maybe the pie analogy doesn’t work. Maybe sometimes, even with a big pie and few people, too many rats and ants nibble at the pie.
Out of 50 states, where do you think NC falls? Top 10 highest spender? Bottom 10? Right in the middle?
The only 8 states that spend more than NC per Medicaid recipient are:
2. New Jersey (somehow that did not surprise me) ($11,433/recipient)
3. Rhode Island (that did surprise me…I mean, look how little RI is…how big a Medicaid budget can it have?) ($11,080/recipient)
4. North Dakota (a less populous state (less tax dollars), I believe) ($10,969/recipient)
5. Pennsylvania ($10,835/recipient)
6. Minnesota (there are big cities there (more tax dollars), no surprise) ($10,080/recipient)
7. Missouri (I went to law school in Missouri. This number surprised me a bit). ($10,022/recipient)
8. Connecticut ($9883/recipient)
9. NC ($9,430/recipient)
Crazy! What about Illinois? With the hugely populous, Windy City and it being Obama’s home state, surely, Medicaid spending per recipient is, at least, in the middle, right?
Wrong. Illinois is dead last with only $5229, on average, per recipient being spent.
Probably because too many people were invited to Thanksgiving…in 2012, Illinois had 2.626 million Medicaid recipients enrolled….or too many rats and ants.
Compare to NC in 2012 – 1.471 million Medicaid recipients.
What was Alaska’s Medicaid budget/spending in 2012 that the average spending per enrollee was $13,073?
$1.425 million spent. Up 10.3% from 2011. And 109,000 Medicaid enrollees.
Here is NC:
Spending: $13.872 million. Up 22.8% from 2011. And 1.471 million recipients.
Here is a crazy one..Nevada:
In 2012, Nevada had 301,000 Medicaid enrollees. A little under 3x Alaska. Nevada spent $1.692 million on Medicaid (only 200,000-ish over Alaska), but Nevada’s average spending per enrollee was $5,621 (less than half of Alaska and the third lowest amount spent per enrollee). Where did all Nevada’s Medicaid money go?? Rats and ants eating away the pie?
North Dakota has the very least number of Medicaid enrollees in 2012…66,000. Wyoming is a close second with only 67,000 Medicaid enrollees in 2012.
North Dakota was the 4th highest state as to spending per enrollee with an average of $10,969/enrollee.
Wyoming was the 16th highest state as to spending per enrollee with an average of $8537/enrollee.
Guess which state had the highest total spending on Medicaid in 2012?
California. (Shocker!). California spent $47.726 million on Medicaid, up 4.2% from 2011. California also had the highest number of enrollees on 2012 with 2.624 million enrollees (over a million more than NC). California also spent the 5th lowest on average per enrollee, $6,065.
Having a high number of enrollees did not always have a direct correlation with spending the least, on average, per enrollee. Oregon only had 569,000 Medicaid enrollees in 2012 and spent the 4th lowest amount, on average, per enrollee, $6,007.
New York is the closest state to spending and number of recipients to California, but New York succeeded in a much higher average spending per enrollee than California.
New York spent $39.257 million total on Medicaid (less than $8 million difference from California) in 2012. New York had 5.004 million enrollees (2.8 million Medicaid enrollees less than California) and spent, on average, $7845/enrollee (absolute, dead-on-middle as compared to all states).
Georgia is, perhaps, the most comparable to North Carolina in terms of number of Medicaid enrollees in 2012. NC = 1.471 million enrollees in 2012. GA = 1.529 enrollees in 2012.
NC spent $13.872 million, while Georgia spent $8.497 million in 2012. So, Georgia had MORE Medicaid enrollees and spent over $5 million less……
Is that good or bad? Is Georgia more efficient? Did Georgia spend less in administration costs?
Actually (albeit there may be other factors), Georgia spent significantly less, on average, on each Medicaid enrollee.
Georgia spent 2nd lowest, on average, per Medicaid enrollee. Only Illinois surpassed Georgia in lowest spending, on average, per enrollee. Georgia spent, on average, $5,229 per enrollee.
NC spent $9430, on average, per enrollee. (Which, BTW, is more than enough for my “A Modest Proposal”).
That is a huge difference!
One other number jumped out at me when I reviewed Modern Healthcare‘s article, “Medicaid Budgets By State.” Remember I told you that NC spent $13.872 million on Medicaid in 2012…and that the amount spent was a 22.8% increase from 2011?
22.8% is a high percentage to increase in only one year!
I looked at the increases/decreases of the states. North Carolina gets the award for the highest percentage growth in spending on Medicaid in the entire nation. NC was the only state whose percentage “increase of Medicaid spending” percentage from 2011 to 2012 was in the 20s.
NC is #1 in the nation for percentage increase as to total Medicaid spending!!!! (Proud?)
The next state with the highest increase in spending on Medicaid is Mississippi with a 17.4% increase in spending from 2011. Next in line is Alabama with a 14.7% increase in Medicaid spending.
Guess which states decreased its Medicaid spending the most from 2011 to 2012?
Oregon (decrease of 23.2% spending) and Illinois (decrease of 15% spending). Is it coincidental that Illinois spent the absolute least, on average, per Medicaid recipient and that Oregon spent the 4th lowest, on average, per Medicaid recipient?
Regardless the size of the pie, the number of guests, and the number of rats and ants, we need to make sure that the guests (Medicaid recipients) are benefitting most from the pie.
Sometimes a decrease in spending equals a decrease in services to Medicaid recipients…sometimes not…I guess it depends on the number of rats and ants.
Why? Why? Why more harassment and audits??! I mean, come one, how many audits can we endure? Pre-payment reviews, Tentative Notices of Overpayment…now this?
What is a pre-enrollment site visit? Essentially a pre-enrollment site visit is a mini-Medicaid audit to determine that all licenses, staff requirements, and other administrative items are in compliance with state and federal law. But these mini-audits can get (for lack of better word) non-mini. As in these audits can be huge and create potentially dire consequences to the providers. Each individual provider’s audit’s procedure will depend on whether the provider is deemed “low,” “moderate” or “high” risk.
As defined by N.C. Gen. Stat., LOW RISK are the following types of providers:
1. Ambulance services.
2. Comprehensive outpatient rehabilitation facilities.
3. Critical Access Behavioral Health Agencies.
4. Dentists and orthodontists.
5. Hospice organizations.
6. Independent clinical laboratories.
7. Independent diagnostic testing facilities.
8. Pharmacy Services.
9. Physical therapists enrolling as individuals or as group practices.
10. Revalidating adult care homes delivering Medicaid-reimbursed services.
11. Revalidating agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics.
12. Revalidating agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
13. Revalidating agencies providing private duty nursing, home health, personal care services or in-home care services, or home infusion.
1. Prospective (newly enrolling) adult care homes delivering Medicaid-reimbursed services.
2. Agencies providing behavioral health services, excluding Critical Access Behavioral Health Agencies
3. Directly enrolled outpatient behavioral health services providers.
4. Prospective (newly enrolling) agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics.
5. Agencies providing HIV case management.
6. Prospective (newly enrolling) agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
7. Prospective (newly enrolling) agencies providing personal care services or in-home care services.
8. Prospective (newly enrolling) agencies providing private duty nursing, home health, or home infusion.
9. Providers against whom the Department has imposed a payment suspension based upon a credible allegation of fraud in accordance with 42 C.F.R. § 455.23 within the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the cessation of the payment suspension.
10. Providers that were excluded, or whose owners, operators, or managing employees were excluded, by the U.S. Department of Health and Human Services Office of Inspector General or another state’s Medicaid program within the previous 10 years.
11. Providers who have incurred a Medicaid or Health Choice final overpayment, assessment, or fine to the Department in excess of twenty percent (20%) of the provider’s payments received from Medicaid and Health Choice in the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the completion of the provider’s repayment of the final overpayment, assessment, or fine.
12. Providers whose owners, operators, or managing employees were convicted of a disqualifying offense pursuant to G.S. 108C-4 but were granted an exemption by the Department within the previous 10 years.
Ok, how does the audit differ depending on whether the provider is classified as low, moderate, or high risk?
42 CFR 455.432 describes the following:
FOR LOW RISK
(1) Verify that a provider meets any applicable Federal regulations, or State requirements for the provider type prior to making an enrollment determination.
(2) Conduct license verifications, including State licensure verifications in States other than where the provider is enrolling, in accordance with § 455.412.
(3) Conduct database checks on a pre- and post-enrollment basis to ensure that providers continue to meet the enrollment criteria for their provider type, in accordance with § 455.436.
FOR MODERATE RISK
(1) Perform the “limited” screening requirements described in paragraph (a) of this section.
(2) Conduct on-site visits in accordance with § 455.432.
FOR HIGH RISK
(1) Perform the “limited” and “moderate” screening requirements described in paragraphs (a) and (b) of this section.
(2)(i) Conduct a criminal background check; and
(ii) Require the submission of a set of fingerprints in accordance with § 455.434.
It is important to note that providers are automatically high risk if the provider is on prepayment review or received a Tentative Notice of Overpayment. Even more reason to fight prepayment reviews and Tentative Notices of Overpayment.
Remember my post on March 14, 2013, stating that NCGS 108C-7 violates federal law? Well, obviously I wrote that blog without pursuing a legal case and without having a judge decide whether NCGS 108C-7 actually violates federal law.
But there may be some validity to my claim that 108C-7 violates federal law.
Yesterday the Supreme Court of the United States wrote an opinion regarding another North Carolina Medicaid statute: NCGS 108A-57. Wos v. E.M.A. In Wos v. E.M.A., the Supreme Court held that the NC Medicaid statute 108A-57 is pre-empted by the Supremacy Clause in the Constitution.
By way of background, the case originated from a mom and dad bringing a medical malpractice claim against the doctor and hospital that delivered their child, E.M.A. E.M.A. suffered multiple serious injuries during birth, leaving her deaf, blind, and unable to sit, walk, crawl, or talk. She also suffers mental retardation and seizures. Due to these birth injuries, Medicaid paid $1.9 in hospital costs, surgeries and health care on behave of E.M.A. In November 2006, the NC Court approved a settlement for $2.8 million. If you think that the settlement seems low, it is low. Apparently the settlement was based on the amount of malpractice insurance the defendants possessed.
A representative from Medicaid (DMA) informed the parents that Medicaid would seek reimbursement for the $1.9 million expended.
“E. M. A. and her parents then filed this action under Rev. Stat. §1979, 42 U. S. C. §1983, in the United States District Court for the Western District of North Carolina. They sought declaratory and injunctive relief, arguing that the State’s reimbursement scheme violated the Medicaid anti-lien provision, §1396p(a)(1) .”
After appeal after appeal and all the way up to the U.S. Supreme Court, North Carolina fought E.M.A. and her parents, saying that the State was entitled to Medicaid reimbursement as required under NCGS 108A-57.
The U.S. Supreme Court disagreed .
In the words of the Supreme Court (as to why the NC Statute was pre-empted):
“Instead, North Carolina has picked an arbitrary number—one-third—and by statutory command labeled that portion of a beneficiary’s tort recovery as representing payment for medical care. Pre-emption is not a matter of semantics. A State may not evade the pre-emptive force of federal law by resorting to creative statutory interpretation or description at odds with the statute’s intended operation and effect. ”
Interesting that the Supreme Court picked the word “arbitrary.”
In light of the Wos v. E.M.A. decision, I think it would be prudent to question other Medicaid statutes. Most likely other Medicaid statutes, similarly, violate federal law. Maybe…..108C-7.
See my March 14, 2013, blog for my legal reasons that 108C-7 violates federal law.
During opening arguments during a recent Injunction Hearing against NC Department of Health and Human Services (DHHS), opposing counsel argued that the NC Medicaid contract is terminable at will.
Meaning, if DHHS felt the desire, it could terminate, for whatever reason, every single health care provider accepting Medicaid from the Medicaid contract except one. And allow one provider to be the Medicaid service monopoly, (I know, drastic example, but if the Medicaid contract is truly terminable at will, the example is plausible), none of the terminated providers could appeal, and, even worse, none of the Medicaid recipients all of a sudden discharged by their providers would have any recourse.
I felt obliged to research.
According to 10A NCAC 22F.0605, “All provider contracts with the North Carolina State Medicaid Agency are terminable at will. Nothing in these Regulations creates in the provider a property right or liberty right in continued participation in the Medicaid program.”
Snap! Very harsh!
Yet I did not stop at this NC Code. Sometimes, not all the time, but sometimes, states do not always enact Codes that follow federal law. So I continued.
According to the History Note of 10A NCAC 22F.0605, the aforementioned Code is based on authority from 42 CFR Part 455. Hmmmm…Federal law.
The Medicaid agency must have—
(a) Methods and criteria for identifying suspected fraud cases;
(b) Methods for investigating these cases that—
(1) Do not infringe on the legal rights of persons involved; and
(2) Afford due process of law; and
(c) Procedures, developed in cooperation with State legal authorities, for referring suspected fraud cases to law enforcement officials.
The phrases that should have jumped out to you are “infringe on the legal rights,” and “due process.” These phrases should have jumped out at you, despite the fact that I italicized them.
But, but, but…. the NC Code specifically stated that providers do not have a property right or liberty right in participation with the Medicaid program!!
Folks, let me tell you a secret. When state law flies in the face of federal law, federal law wins. Why? Ask our Founding Fathers.
Article VI of the U.S. Constitution states, in pertinent part:
This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.
Notwithstanding 42 CFR Part 455.13’s language, Part 455.106 explains certain circumstances in which the Medicaid agency MAY terminate a provider, such as nondisclosure of conviction of a criminal offense. The fact that 42 CFR Part 455 times in which the Medicaid agency MAY terminate providers inherently indicates that the Medicaid contracts are not terminable at will.
Of course, in order to legally determine whether 10A NCAC 22F.0605 violates federal law, someone would need to bring a lawsuit, or declaratory judgment.
But, until that occurs, I think I have a great argument that the termination of a providers’ Medicaid contract, without a hearing, does constitute a taking without due process.
Many providers continue to accept Medicaid despite the fact that the state is conducting Medicaid audits, the providers feel harassed by the state, the providers are terrified that they have to pay back hundreds of thousands of dollars for health care services actually rendered to Medicaid recipients, the providers are forced to wait months post-services rendered to receive Medicaid reimbursements, and the reimbursements are so much lower than the overhead costs.
Why? Why do health care providers undergo so much emotional and financial strain to provide health care services to Medicaid recipients? I believe that health care providers who dedicate services to Medicaid recipients truly understand and believe that the Medicaid population deserves and needs quality health care. These providers understand that most providers will not undergo the mental and financial stress needed to meet all the Medicaid criteria and documentation. So these providers feel a sense of duty to Medicaid recipients.
And to those health care providers who accept Medicaid in NC: “Thank you.”
I heard a story today of a health care provider who deserves this “Thank you,” and more. When the Personal Care Services (PCS) criteria changed this past January 1, 2013, many of the provider’s clients no longer qualified to receive PCS under Medicaid. Did that stop the provider from providing the needed PCS? No. Is the provider paid for its services? No. But this provider was dedicated to its clientele.
So when 80-year-old Dorothy (obviously, I have changed the names), who suffers from late-stage breast cancer, dementia, and Rheumatoid arthritis was told that she no longer met the PCS criteria, she was terrified. But this provider continues, even today, to provide Dorothy the care she needs.
The provider is not reimbursed for helping Dorothy. But the provider feels a sense of duty. Do you turn your back on someone in need because the General Assembly changed the PCS requirements? Or do you continue to help the person you have cared for for so many years and hope that the government will somehow right the injustice?
Interestingly, this same provider is undergoing two Medicaid audits for a total of approximately half a million in alleged recoupments. The provider was forced to hire an attorney and defend the Medicaid reimbursements it has received for years of providing quality health care service to the Medicaid population. Instead of getting a “Thank you,” the state has audited and claimed that the provider must pay back almost half a million dollars, even though the provider provided all the services for which it billed.
Yet this provider, not only provides all the services for which it bills Medicaid, but when Medicaid drops Dorothy (and thousands of others) from the Medicaid program, this provider goes above and beyond its call of duty and provides services knowing that Medicaid will never reimburse it.
Maybe this provider should not be audited. Maybe the Medicaid system should be audited for all the services for which this provider is not paid. Or maybe this provider, and many others, deserve a simple:”Thank you.”
Today, I had a fascinating discussion with a gentleman (who will remain unnamed. I will call him Joe). (BTW: The veracity of the information in this blog is not based on my first-hand knowledge, it is based on Joe’s). For years, Joe owned a nursing home ( he recently sold it). He explained that he never accepted over 20% Medicaid clients. His friend, Bill (also unnamed) also owned a nursing home. Bill accepted 100% Medicaid clients. So let’s explore the differences between the two nursing homes.
Joe’s: The nursing home was brand new. Joe had the building built with state-of-the-art medical access (pre-wired for medical equipment, etc.). The staff was exceptional. The beds were the kind that you can lay down or sit up; the beds also vibrated at certain times of the day to prevent bed sores. Each room had a television. The cafeteria provided an array of healthy foods.
Bill’s: The nursing home was located in an old concrete building. The nursing home met all the minimal requirements in which to meet the criteria to receive its Certificate of Need (CON). There was staff. There were beds, but not the movable type, just basic single beds. There was food. Residents and family of residents complained often about the living conditions, but the nursing home met the state’s minimum requirements.
Joe’s: The nursing home was profitable as long as it kept the number of Medicaid recipients to a minimum. Many times Medicaid recipients were turned away.
Bill’s: The nursing home was profitable as long as he kept his staff to a minimum and quality of food, beds, cafeteria meeting the minimum requirements.
What I extracted from Joe’s comparison between the two nursing homes, was that Medicaid recipients, for the most part, were receiving less quality care than those with private insurance. Fair?
You have to ask yourself why was Bill’s nursing home profitable with all Medicaid clients? Because the Medicaid clients were housed in a nursing home that only met minimum standards. Bill’s nursing home was a concrete block building. There were neither TVs nor upgraded medical equipment. By keeping his overhead at a minimum, Bill was able to make a profit off Medicaid clients.
On the other hand, Joe’s state-of-the-art nursing home had to limit the number of Medicaid recipients in order to maintain a profit.
Why does Medicaid pay so little to health care providers? With all the money going into Medicaid budgets/funds, why can’t more be allocated to paying higher reimbursements to health care providers? It seems to me that, if you agree that Medicaid is a needed program, you would agree that the Medicaid recipients should also receive quality health care. Personally, I would much rather end up in Joe’s nursing home rather than Bill’s.
In 2012, when the Medicaid rules changed (The rules didn’t change in 2012. The rules were determined to change in 2013) as to who could receive PCS, thousands of adults receiving PCS in adult care homes, suddenly, did not meet the criteria for PCS. Thousands of Medicaid recipients would no longer receive PCS; therefore, many group homes would go bankrupt.
Just to show the great breadth of this problem: The Office of Administrative Hearings (OAH) received 15,000 appeals this month from Medicaid recipients no longer eligible to receive PCS.
Expect to see a bill with a fix to the group home issue in the House Appropriations Committee on Thursday.
According to DMA Clinical Policy 8C, a Medicaid recipient, under the age of 21, who wants to seek mental health services by a therapist (Outpatient Behavioral Health services) is required to have an “individual, verbal or written referral, based on the beneficiary’s treatment needs by a Community Care of North Carolina/Carolina Access (CCNC/CA) primary care provider, the LME-MCO or a Medicaid-enrolled psychiatrist.”
Medicaid recipients over the age of 21 can self-refer him or herself to mental health services.
Adam Lanza, the boy who shot so many innocent children and teachers in Connecticut, was 20-years-old at the time of the horrible event.
Yet, if he lived in North Carolina, he could not have self-referred himself to receive therapy. He would have needed to see a doctor first.
I understand that Medicaid recipients under the age of 21 CAN see a therapist. But, by placing another hoop for them to jump through (seeing another doctor first), just makes it that much harder to receive therapy. If access to mental health services is that important, why make it more difficult for Medicaid recipients under 21?
Surely, a 20-year-old Medicaid recipient has the capability to determine whether he or she is in need of therapy.
Exactly how much has the federal government contributed to NC Medicaid? Throughout the years, I’ve heard 75%, 2/3, and as low as 60%. So I wanted to find out exactly how much the federal government gives North Carolina. I also wanted to compare the percentage to other states. And what will change if NC expands Medicaid? What changes?
Turns out that the Centers for Medicare and Medicaid (“CMS”) offers the historical stats I wanted.
In 2009 (the data for 2010 is not available yet, although it seems that by 2013 the data should be available), North Carolina’s population was 9,380,884. 1,974,287 of those residents were Medicaid enrolled.
In 2009, total Medicaid pay-outs were $10,888,466,523.00 (Yes, folks, that is ten BILLION).
The federal government paid $7,818,867.023.00 or 71.81%. The State paid $3,069,599,500.00 or 28.29%. The federal government’s 2009 contribution to NC’s Medicaid was higher than the national average, which was 66.30% in 2009. However, that was not always the case. In 2008, the federal government contributed 64.22% to NC’s Medicaid expenditures. Although it is important to note that in 2008, the national average declined to 57.03%. So NC was still above average.
But why the huge discrepancy? Why in 2008 does the federal government, on average, pay for a little over half the states’ Medicaid costs, and, in 2009, pay, on average, 2/3 of the states’ Medicaid costs?
The federal government pays states for a specified percentage of program expenditures, called the Federal Medical Assistance Percentage (FMAP).
FMAP varies by state based on criteria such as per capita income. The regular average state FMAP is 57%, but ranges from 50% (the minimum) for wealthier states up to 75% in states with lower per capita incomes (the maximum regular FMAP is 82 %).
This all sounds, to me, like a lot of statistical jargon. So I went to NC’s historical FMAPs. According to statehealthfacts.org, NC’s FMAP in 2009 was 74.51%. But, according to CMS, the actual federal Medicaid payment was 71.81%. So why the difference? Maybe one of the websites incorrectly calculated the FMAP. If so, it seems (just by gut) that CMS would have the actual Medicaid costs; thus providing more accurate data. The State Health Facts website also projected NC’s FMAP up through 2013, so again, it appears that the State Health Facts’ data were more projections. Just in case you were wondering, the State Health Facts website projected NC’s FMAP for 2013 as 65.51%.
Why will it go down? Apparently, all the factors that contribute to NC’s FMAP.
Well, we also have to consider Obamacare or the Affordable Care Act (ACA). If NC expands Medicaid, from 2014-2016, the federal government will cover 100% of our Medicaid costs (not ALL Medicaid costs) but 100% of costs to cover newly-covered Medicaid recipients. For example, if the projections are correct and 700,000 more North Carolinians will be covered if NC accepts the ACA, than the federal government will pay for 100% of the newly-eligible 700,000 Medicaid recipients, or, in other words, the federal government will pay 100% of approximately 35% of NC Medicaid costs. The rest of the NC Medicaid costs in 2014, or 65% of overall Medicaid costs, will be paid by the federal government at the normal FMAP amount (somewhere between 60-66%)
Let’s throw out some more projections: Remember, in 2009, the State paid $3,069,599,500.00 or 28.29%. But the FMAP was high at 71.81%. The State Health Facts website projected NC’s FMAP as 65.51% in 2013. So let’s use 65.51% for 2014 when it is projected that 700,000 more North Carolinians will be Medicaid recipients. In 2009, 1,974,287 people in North Carolina were Medicaid recipients. For the sake of simplicity, let’s say that by 2014 the number rounds up to 2,000,000 and the projected 700,000 additional Medicaid recipients occurred, as predicted, for a grand total of 2,700,000 North Carolina residents depending on Medicaid.
If we paid $10,888,466,523.00 for 1,974,287 people (both federal money and state money), I think it is a safe approximation that we would pay approximately $11,000,000,000.00 (this number is merely for this example) for 2,000,000 people (the increase in money is for an estimated additional 25,713 Medicaid recipients and the decrease in our projected FMAP). The additional 700,000 Medicaid recipients would cost approximately another $3,850,000,000.00 (assuming about 35% increase is correct with 700,000 more Medicaid recipients).
Thus the projected grand total of Medicaid costs to NC in 2014 (if NC expands Medicaid) will be approximately $14,738,466,523.00. The federal government, based on these estimations, will pay approximately $3,850,000,000 (100% of newly-eligible persons’ Medicaid costs) + $7,150,000,000 (65% of regular Medicaid costs based on the FMAP) for a total of 11,000,000,000.00. Leaving the $3,738,466,523.00 for North Carolina to pay.
Seems pretty sweet, right? I mean, our Medicaid costs do not increase terribly and the federal government pays for way more Medicaid costs in NC. However, this sweet deal does not last. Starting sometime after 2016 (the federal government states that the decrease will be “phased in”), the federal government’s portion for the newly-eligible Medicaid recipients decreases from 100% to 90%.
For NC, just the 10% increase in 2017 means approximately $1,100,000,000.00, increasing NC’s costs for Medicaid payments to up around $4.8 billion. In NC Medicaid history, NC has never paid over 4 billion. But NC will pay way over $4.8 billion in only four years under the ACA.
This is not a blog against Medicaid expansion. I am merely pointing out the financial undertakings and consequences if NC expands. If NC expands, NC must be ready to pay for the Medicaid program. Read the rest of this entry