Governor’s Goal to Slow Medicaid Spending

Governor’s Goal to Slow Medicaid Spending

For the last two decades, Medicaid spending has been a consistent topic and priority for every Ohio governor. Now, it is John Kasich's turn at trying to control Medicaid spending.

Conducted by a blue-ribbon panel six years ago, a comprehensive review was conveyed on Medicaid spending and found dysfunctions that have driven up costs, including:

• Fragmented bureaucracy,

• Complicated regulations,

• Lack of coordination in services,

• Disproportionate use of high-cost nursing facilities over home and community based care; and

• Payment system that rewards volume of services rather than outcomes.

Previous administrations have initiated significant reform efforts to help slow the growth in certain spending areas. For an example, low-income families, which are the largest but least expensive category in Medicaid enrollees, now fall under managed care plans. Alternatives to nursing homes have increased to those who need long-term care and changes in the rate-payment formula for nursing facilities have discouraged overspending.

Today, Medicaid growth represents around 30 percent of state spending, which implies that Medicaid reform has not gone far enough.

In March, Governor Kasich presented a budget plan that he says will transform Medicaid and reduce costs primarily through cuts in payments to hospitals and nursing homes, which is where the majority of Medicaid dollars are spent.

Kasich's budget follows trends from previous administrations, such as increasing funding to support a system of coordinated care for disabled children and the chronically ill. His plan also includes taking care of the elderly by streamlining and simplifying long-term care services and procedures. His plan would also create a single waiver program for options such as PASSPORT, a program that allows seniors who require a nursing facility level of care to remain living at home or in the community and receive care in those locations, and assisted living.

Kasich's objective is to consolidate the funding under the Department of Job and Family Services. According to the Ohio Hospital Association, Kasich's plan also faces credibility problems. His budget proposes to increase options for seniors to receive care in settings where they want it, but at the same time the budget cuts 176 million from the PASSPORT program. To make the shift to home and community based care requires a support structure with the help of home health nurses and aides, but the budget reduces funding for home health nurses.

Just like any other proposal, Kasich's is meant with a lot of opposition. To keep up with the latest Medicaid news, please visit www.cms.gov.