State to take $30M slice from Medicaid program

by Bruce Krasnow, Santa Fe New Mexican

New Mexico is moving forward with a broad range of cuts in reimbursements to hospitals, physicians, dentists and other providers who serve Medicaid patients across the state.

The cuts would take some $30 million in state money out of the insurance program that serves 761,000 New Mexicans, but that would be amplified with the loss of federal matching money, leading to a total reduction in medical care and support services of between $90 million and $100 million.

At a meeting Monday of the Medicaid Advisory Committee, many said the state needs to take a more balanced approach to the Medicaid budget, not just punish providers and those using services who might already have a hard time finding care.

Bill Jordan of New Mexico Voices for Children said Medicaid is spending its money wisely and managers are doing their best to control costs. “I don’t think we have a spending problem,” he said, “we have a revenue problem. It’s extremely frustrating to see how our tax policy has been used to gut the revenue we need for Medicaid. We need a long-term solution to our revenue problem.”

Since the expansion of the Medicaid program under the Affordable Care Act, spending in the state has consumed a larger and larger share of the state general fund at a time when the state is cutting spending to other programs such as higher education because of falloff in oil and gas royalties.

After expanding the program to low-income adults, enrollment in the state has climbed 66 percent, versus 23 percent nationally.

Total spending in fiscal year 2017 from the state is expected to reach $1.2 billion with another $4.5 billion coming from the federal government. But even with that, the shortfall to fully fund the program and provide the same level of service for all the enrollees was expected to be approximately $80 million in fiscal year 2017, which begins July 1.

Now, with the reimbursement cuts and other cost-containment measures, the Human Services Department expects the shortfall to be $24 million, Cabinet Secretary Brent Earnest told the Medicaid Advisory Committee on Monday. The new projections rely on $20 million in proposed transfers from the University of New Mexico Health Sciences Center in Albuquerque, the Associated Press reported.

“We are satisfied we’re making progress on our budget,” he said.

The committee has been working on several fronts to balance program spending with expected revenues. It is also looking at the benefits package for those who receive health care services and more long-range issues such as imposing a provider fee on hospitals, nursing centers and other outpatient facilities. The fee is backed by hospital administrators as a way to stabilize the Medicaid budget for years to come and put more money into the system.

New Mexico is one of the few states that doesn’t have a provider fee on hospitals or nursing homes. The Legislative Health and Human Services Committee is planning to hear a presentation on provider fees at its interim meeting on May 23.

Earnest said the advisory committee is also looking at that option and should move forward, but said he has had no discussions with Gov. Susana Martinez on whether she would support the effort.

Larry Martinez, chairman of the advisory committee, said the group looking at benefits has probably ruled out imposing copays on patients as there is an understanding that most probably can’t afford them and that it puts “major constraints” on providers to collect money from those who don’t have it.

Nancy Smith-Leslie, state medical assistance director, said once the public comments are received on the reimbursement cuts, the agency will formally negotiate with the Centers for Medicare & Medicaid Services, the federal agency that oversees Medicaid.

She expects any reimbursement cuts to become effective July 1.

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