DCH scraps plans to restructure Medicaid because of ‘uncertainty’

DCH scraps plans to restructure Medicaid because of ‘uncertainty’

By Tom Crawford | Published: July 13, 2012

The Department of Community Health (DCH) announced Friday it is dropping its plans to restructure the Medicaid and PeachCare health insurance programs that serve low-income Georgians.

DCH Commissioner David Cook cited the “uncertainty” overhanging the Medicaid program as a result of the June 28 Supreme Court decision that upheld the constitutionality of the federal Affordable Care Act (ACA).

In a statement released Friday morning, DCH said:

The fallout from the recent U.S. Supreme Court’s decision on the Affordable Care Act as well as the potential impact of the November elections contributed to the uncertainty. There is also a great deal of unpredictability about Medicaid funding as a result of federal budget talks scheduled to take place later this year.

Moreover, substantial uncertainty exists about how states might replace the loss of federal Upper Payment Limit funding if they moved toward greater managed care. While waivers to offset the loss of that funding are possible, it takes nearly a year to get through the federal waiver process and by then the current waiver system could prove unnecessary.

DCH committed more than $3 million for consulting services and has been working for nearly a year on a comprehensive restructuring of the Medicaid program.

The Navigant consulting firm recommended that DCH retain the current managed care model that includes the majority of Medicaid patients but expand it to include the aged, blind and disabled population. Navigant also said the department should move some Medicaid participants into a “commercial” model of health insurance coverage.

DCH said it will continue to use the current system in which three care management organization (CMOs) contract with the agency to administer Medicaid and PeachCare to a large portion of the programs’ participants.

“As a result of our efforts, we will implement numerous initiatives to improve services in a cost-effective manner,” Cook said. “Even though increasing uncertainty in Washington would make a full Medicaid redesign imprudent at this time, it is important that we focus on what we can do to provide better service.”

In voting to uphold the Affordable Care Act, the Supreme Court also ruled that states have the option as to whether they will expand Medicaid coverage to persons making up to 133 percent of the federal poverty level. That would add an estimated 650,000 persons to Georgia’s Medicaid rolls.

Under the provisions of ACA, the federal government will pay 100 percent of the costs of Medicaid expansion for the first three years and 90 percent of the costs thereafter.

Gov. Nathan Deal opposes the Affordable Care Act and contends the state cannot afford to expand Medicaid coverage to an additional 650,000 people.

Shortly after the Supreme Court decision was handed down, Deal said he will wait to see if voters elect a Republican president and Republican-controlled Congress in November that would repeal the healthcare act and make Medicaid expansion a moot point.