Medicaid: It’s Complicated

| June 21, 2012

Managing Medicaid is not unlike sitting in the driver’s seat of a car without being able to steer, change speed or determine who and how many others can ride. 1.6 million North Carolina residents receive Medicaid, costing roughly 12 billion dollars a year, of which the state contributes 3 billion. This week’s firing of the State Medicaid Director underscores just how complicated, costly and frustrating this huge program can be.

Everyone is looking for a silver bullet to fix Medicaid, but there is no simple solution. Three variables affect the size, scope and cost of this behemoth program that has many masters but few willing to provide day-to-day management: eligibility, services and reimbursements to providers. Since the federal government provides approximately four dollars for every one North Carolina dollar it comes as no surprise the feds get the major say. State legislators also have control by establishing state policies, rules and funding, leaving little control but large administrative responsibilities to managers at The Department of Health and Human Services (DHHS), doctors, hospitals and other care providers. There is little question that DHHS can and must do a better job of administering this program, but too often special interests and lobbyists have prevailed upon legislators to insert legislation that favors or restricts parts of Medicaid, sometimes resulting in unintended consequences and cost increases.

Bad as the current state of Medicaid might be the future could be even grimmer. Lanier Cansler, former Secretary of DHHS predicts that if the Affordable Care Act withstands the current Supreme Court challenge North Carolina could see as many as 600,000 patients added to Medicaid rolls, costing our state hundreds of millions more each year. Regardless of the outcome of the court case it behooves us to tackle this complicated Medicaid mess that currently consumes 15 percent of our state budget and is growing each year.

There are three actions our leaders should take right now to set this program on a better course. The first is for elected officials, including the Governor and legislators, to thoroughly immerse themselves in understanding Medicaid, especially federal guidelines and current state legislation and policies, learning how the program is currently designed and administered. You can’t fix something you don’t understand. Then we must reach consensus about what we want our Medicaid program to accomplish, reviewing and refining our basic goals. Finally, we must design a comprehensive plan to get us from where we are to where we want to be. Who is ultimately responsible for Medicaid? Can we hold people accountable who have little input and control over decision-making?  How involved does the legislature want to be? What oversight protections do we need in place and who is to provide that oversight?

Our legislature tried making changes last year, only to learn that our federal partner is slow, and in some instances unwilling, to change, explaining in part the current two hundred million dollar shortfall.

One thing is very clear: finger pointing, repeated staff changes, undue influence, poor management and insufficient oversight won’t make Medicaid better. It is time for concerted and united action. We owe that to taxpayers, to state employees trying to do their jobs, but more importantly to the recipients. Medicaid may be complicated but it isn’t impossible.

Category: Healthcare, SPIN Blog

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