Shortfall due to Higher BadgerCare Plus Enrollment and Neutral County Nursing Home Costs
From Forbes McIntosh, Government Policy Solutions, WALA Lobbyist
The Wisconsin Legislative Fiscal Bureau (LFB), and independent and non-partisan fiscal agency serving the state legislature, released a fourth quarter of fiscal year 2014 (Wisconsin fiscal years begin on July 1 and end on June 30). According to the report, the LFB’s “current projection for Medicaid program expenditures and revenues indicates a need for $93.0 million GPR in savings by the end of the biennium to remain within the budget.” In the LFB March report, they had projected the savings need to be $20.3 million GPR.
It is important to note that the $93 million in savings reflects only the state share – General Purpose Revenue (GPR). Generally the state share is approximately 40% and the federal government match is 60%. Therefore total or all-funds “savings” needed (both federal and state) is approximately $232.5 million. Further, budgeted GPR for the Medicaid program totals $4.8 billion for the biennium (2-years), meaning the $93 million GPR shortfall represents less than 2% of total expenditures. “Savings” are achieved by reducing expenditures, cutting programs or finding opportunities to recoup Medicaid payments made incorrectly.
According to the LFB report, “the larger GPR (state funds) need is primarily the result of two factors. First, enrollment of adults without dependent children in BadgerCare Plus has been higher than assumed in Act 20, the 2013-15 biennial budget. The budget had assumed childless adult enrollment would reach approximately 99,000 by the end of FY15. Through May 2014, 103,126 individuals have already enrolled. The fast pace of enrollment can be attributed in part ot the outreach efforts undertaken by the Department (of Health Services) and numerous community partners to inform individuals of BadgerCare Plus eligibility changes implemented on April 1.”
“Second, this estimate assumes lower federal Medicaid revenues for costs incurred by county-owned nursing homes for serving enrollees. Under current law, the Department (of Health Services) claims federal Medicaid funds for facility costs over and above the reimbursement they receive through the Medicaid nursing home rate formula. Act 20 assumed that conty homes costs would continue to grow each year as they have for the past several years. However, the Department recently received CY 12 cost reports, which reported that most homes showed little cost growth or actual decreases from the previous year. The reports appear to indicate that a number of homes, like local unit governments across the state, have been able to use the tools now available to them to manage personnel fringe benefit costs. Based on the lower costs in the CY 12 reports, the Department has revised federal claiming downward by $35 million through the biennium.”