OM: 47 States to Contain Medicaid, 42 to Reduce Provider Rates

47 States Planning 2013 Medicaid Cost Containment Initiatives;

42 To Reduce Or Restrict Provider Organization Rates

Open Minds  December 10, 2012

 

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In 2013, all but three of the 50 states are planning to implement Medicaid cost containment initiatives. In 42 states, cost containment initiatives will target reduction or restrictions to reimbursement rates for provider organizations as a cost control measure. These initiatives target different provider organization types. In 40 states inpatient hospitals are targeted; and in 20 states, nursing home rates are targeted. In three states, physicians are targeted, and in eight states, managed care organization capitation rates are targeted. No states are planning reimbursement cuts for primary care physicians; three are planning cuts for specialists, and two are planning cuts for dentists.

Even in states planning to restrict reimbursement rates for some types of provider organizations in 2013, rates for others may actually increase because 37 states are planning at least one rate increase. Across these 37 states, 10 are planning to increase rates for inpatient hospitals, and 30 are planning increases for nursing homes. In 12 states, physician rates are slated to increase, and in 17 states increases are planned for managed care capitation rates. In 10 of the 12 states, primary care physician rates will be increased; in nine states rates will increase for specialists, and in five states, rates will increase for dentists.

Benefit cuts were reported by 18 states for 2012, and eight states said they intended to use this strategy in 2013. Eligibility restrictions were reported by two states for 2012, and six states said they intended to use this strategy in 2013. Restrictions to Medicaid eligibility, enrollment, or renewal processes are generally prohibited by the Patient Protection and Affordable Care Act of 2010. For 2012, 32 states made enhancements to eligibility standards, and 21 states reported plans to make enhancements for 2013.

During fiscal year 2012, estimated Medicaid spending was $440.6 billion, about 2.0% higher than the $432 billion in Medicaid spending in fiscal year 2011. In their appropriations for fiscal year 2012, legislators had anticipated a 2.2% growth rate in Medicaid spending. Lower increases in Medicaid enrollments were a factor in lower spending growth. Medicaid provides health and long-term care coverage to more than 62 million low-income Americans and to about 9 million low-income individuals also eligible for Medicare. During fiscal year 2012, Medicaid enrollment increased by 3.2% over the 2011 enrollment level. Legislators had anticipated a 4.1% increase in enrollment for fiscal year 2012 compared to the 2011 enrollment levels.

States plans and the change in Medicaid spending growth were reported in “Medicaid Today; Preparing for Tomorrow A Look at State Medicaid Program Spending, Enrollment and Policy Trends” by researchers with the Kaiser Commission on Medicaid and the Uninsured (KCMU) and with Health Management Associates. The report is based on responses to the 12th annual nationwide survey of Medicaid officials in all 50 states and the District of Columbia.

The full text of “Medicaid Today; Preparing for Tomorrow A Look at State Medicaid Program Spending, Enrollment and Policy Trends Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2012 and 2013” was published in October 2012. The report is available online athttp://www.kff.org/medicaid/8380.cfm (accessed November 20, 2012).

OPEN MINDS reported on overall Medicaid cost containment measures in “40 States Increased Prevalence Of Medicaid Managed Care In 2012 Or Are Planning To In 2013.” The article is available at http://www.openminds.com/market-intelligence/premium/omol/2012/111212strat4.htm

OPEN MINDS reported on one aspect of state strategies to slow Medicaid spending in “33 States Implement Medicaid Pharmacy Cost Containment Measures In FY 2012.” The article is available at http://www.openminds.com/market-intelligence/basic/omolfree/112612strat5.htm

For more information, contact: Chris Lee, Communications Officer, The Henry J. Kaiser Family Foundation, 1330 G Street, NW, Washington, District of Columbia 20005; 202-347-5270; Fax: 202-347-5274; E-mail: clee@kff.org; Web site: www.kff.org.   

47 States Planning 2013 Medicaid Cost Containment Initiatives; 42 To Reduce Or Restrict Provider Organization Rates. (2012, December 10). OPEN MINDS Weekly News Wire.

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