$17 Million Cut From Medicaid
December 11, 2009
The Oklahoma Health Care Authority board voted unanimously to cut nearly $17 million in the state’s Medicaid program Thursday, but left payments to providers such as hospitals, doctors and nursing homes untouched.
But Mike Fogarty, chief executive officer, warned that state legislators have indicated additional cuts are likely so providers likely will face a 1 percent reduction in Medicaid payments.
“If and when this board mee ts again to discuss more cuts, provider rates will unavoidably be on the table,” he said. “Additional cuts will take us into muscle.”
Cuts to patients — the agency serves about 20 percent of the state’s population — include such things as prescription co-payment increases and a cap on outpatient mental health services.
The authority had already pared its services by $9.8 million in state funding this fiscal year, which began July 1. That translates into an even deeper cut because every state dollar is matched by three federal dollars.
Gov. Brad Henry and the state Legislature ordered state agencies to reduce the remainder of the year’s budget by 5 percent.
“The day of reckoning has now arrived,” said board member George Miller as he presented the audit/finance committee report.
Board members expressed regret at having to make the cuts, but Fogarty noted that many providers and others helped determine reductions that would cause the least harm to individuals served by the agency.
“You will not see on this list any
effort to reduce financial eligibility,” he told the board of the staff’s proposed cuts to the Medicaid program, called SoonerCare.
Most cuts will take effect Jan. 1, Fogarty said.
The board cut Medicaid’s administrative costs by 5 percent, restricted the number of glucose test strips for diabetics to 100 from 300 without prior authorization, and reduced pricing by 36 percent for compressor-driven nebulizers for children with asthma while eliminating adult nebulizers.
The board also eliminated some durable medical equipment for adults, reduced the number of brand-name prescriptions allowed to two from three and raised prescription copayments to $2 and $3.
<p> ;Currently, SoonerCare clients pay $1 for prescriptions that are less than $30 and $2 for drugs valued at more than $30.
Earlier, the agency had considered limiting emergency room visits to three per year for adults who aren’t pregnant, and reducing payments to hospitals, doctors and nursing facilities by 1 percent. Neither of those reductions were approved Thursday.
“It’s important to us that we try not to step back from our commitment (to providers) and prolong (reduced payments) as long as possible,” Fogarty said.
Provider reimbursement cuts could lead to fewer doctors opting to accept SoonerCare, officials said.
Among other budget cuts were:
A reduction in payments for resin (white) fillings by 45 percent to the same rate paid for amalgam (silver) fillings for a savings of $1.8 million;
A reduction in Medicaid allowable for Medicare Part A and Part B crossover claims from 100 percent of that allowed to 25 percent for co-insurance (part B) and 75 percent of the Medicaid allowed for deductibles for a savings of $5.3 million;
A 25 percent cap on outpatient mental health care for those who are most seriously ill for a $630,000 savings and affecting 3,000 Oklahomans;
And a tiered reduction in reimbursements for psychiatric inpatient treatment for a $639,000 savings.
“They’re trying to be very fair and diligent,” Gail Lapidus, executive director and CEO of Family and Children’s Services of Tulsa, said of the board’s action. “But a 25 percent reduction is significant.”
The board’s action will affect 671 people in Tulsa County — 244 of whom are school-age children, she said.
As the largest provider of outpatient services to the state’s uninsured population, Lapidus’ a gency provides critical care that reins in costs by keeping adults and children in their homes and out of hospitals, she said.
“For children, (the reductions) just put them at greater risk,” she said.