Friday, May 21, 2004
Copyright © Las Vegas Review-Journal

HEALTH CARE FINANCING AND POLICY: Medicaid budget short $20 million

Number of aged, blind and disabled people in program more than anticipated

CARSON CITY -- The state program that pays medical costs for the poor, aged, blind and disabled has run out of money a month before the end of the fiscal year and will require a $20 million transfusion, an official said Thursday.

The Legislature's Interim Finance Committee will be asked June 3 to authorize a transfer from next year's Medicaid budget to cover the shortfall, program Administrator Charles Duarte said.

The transfer would leave the 2004-05 fiscal year Medicaid budget that starts July 1 short. Duarte said he doesn't know whether the Legislature will have to find money to balance next year's budget.

The $20 million would come from the state general fund.

Duarte, who runs the Division of Health Care Financing and Policy, which oversees the Medicaid program, said the overall Medicaid population as of March is below what was budgeted by the Legislature.

Officials budgeted for 164,619 people as of March, but 156,018 were enrolled.

But of that total, the aged, blind and disabled population was 39,019, above the budgeted caseload of 37,645.

Duarte said the cost of care for that group is much higher than for the Medicaid population as a whole, which includes people receiving welfare assistance. The welfare population on Medicaid also is experiencing higher-than-expected medical costs, he said.

Sen. Barbara Cegavske, R-Las Vegas, said the transfer might be necessary, but she wants to know why it was not foreseen and better planned for. The finance committee met April 4, and not a word was said, Cegavske said.

"I'm amazed that they didn't come to us before," she said. "Instead of being proactive, now we're hit with a crisis."

Cegavske said she has been told by medical providers that some Medicaid bills are not being paid because of a new information system that went online in the fall.

Cegavske said she would like to know that those problems have been worked out before approving a $20 million general fund transfer.

Medicaid is one of the most costly programs and totals $308.8 million from the state general fund this year. It accounts for 13 percent of the state general fund budget.

State Budget Director Perry Comeaux said one reason for the shortfall is the $80 million in advances to medical providers. Money was advanced because of problems with the new Medicaid information system.

Because bills were not being paid on time, the advances were issued so doctors and others would not be financially harmed by the delays.

If those cash advances aren't drawn down completely this year, the leftover funds will offset any shortfall next year. If the cash advances do pay for much of the cost for this fiscal year, the size of the transfer could be lower, Comeaux said.

The information indicates that the number and cost of claims is rising.

If that's a trend, "then all we're doing is postponing the pain and next year we're going to need more money," Comeaux said.