Report Details Medicaid Spending, State Efforts to Control Costs

State governments across the country are experiencing extraordinary budgetary shortfalls due to the increased costs of their Medicaid programs over the past few years.  Enrollment in Medicaid programs in the United States grew 7.2% in 2009, 5.5% in 2010 and is expected to rise about 4.1% in 2011. 

$90 billion in federal stimulus spending, designed to lessen the impact of the economic recession on state governments, will expire at the end of FY2011, leaving states to come up with new strategies to pay for the state/federal cooperative health insurance program.  Facing slowly recovering state revenues and approaching the end of additional federal funding, states are left with a budgetary shortfall of  $149 billion for FY2012-13. 

The Kaiser Commission on Medicaid and the Uninsured report provides details on state efforts to deal with the increased costs of Medicaid over the past several years. From the Kaiser report:  

– Forty-six states have cut rates for some providers in fiscal 2012, after 39 states took similar action in fiscal 2011. About 28 states have raised payments to specific providers. But study author Vern Smith wrote that that the payment cuts tend to be broad while the increases typically are narrow boosts to a small range of providers. Hospitals were particularly hard hit, with 40 states lowering inpatient rates in fiscal 2012.

– Twenty-four states expanded the use of managed care plans or techniques used by health plans, after 17 states took similar steps in fiscal 2011.

– Fourteen states shifted more costs to patients by raising or adding co-payments, after five states did so in fiscal 2011. MORE

Orthotics and prosthetics benefits have largely been spared the budget ax thus far, but until additional federal funds for Medicaid programs are allocated as part of the Affordable Care Act mandated expansion in 2014, states will continue to face difficult budget situations. A watchful eye from the orthotics and prosthetics community in all states across the country will be required to ward off potential cuts to O&P coverage. If one state is able to realize significant cost savings as a result of limiting, cutting or institutionalizing O&P benefits, many other states will follow in hopes of realizing the potential budget impact.

OPGA Government Relations will continue to follow state efforts to cut costs related to their Medicaid programs and keep members up-to-date on changes that could impact orthotics and prosthetics.  Please contact us if you encounter issues in your state.

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