Idaho could reduce its Medicaid spending by as much as $65.7 million, according to a presentation Monday from a contractor hired to evaluate ways to reduce Medicaid’s costs to the state general fund.
But almost every option would have a potential downside — making it harder for Idahoans on Medicaid to get health care, or driving up costs for another state program, for example.
Michael Heifetz, director of the consulting firm Sellers Dorsey, presented the firm’s preliminary recommendations Monday.
“… You’ll see through this, really, whole conversation that any aspects of cost savings bring with it the potential for other consequences,” Heifetz said. “So, you know, every action brings a reaction, and the degree of the reaction is not always easy to determine.”
The recommendations were necessarily short-sighted, since the consultants were asked to consider short-term options without the downstream implications of any cuts, he explained. But they are now working on a second report, which he described as a “more holistic” look at Idaho’s options for Medicaid cost containment.
Heifetz showed a breakdown of the firm’s early findings. It included cuts to hospital spending, adult dental care, reimbursements for doctors and other providers, and more.
“It is not a ‘favorite list’ of mine, so to speak,” Heifetz said. “I didn’t choose one over the other; we just wanted to approach it in the financial scope, given the charge that we were given in the (contract) was to find $41.5 million in short-term savings. So, we could say we overachieved by finding more than that, but it’s more to give you an opportunity to sift and winnow through those as you see fit.”
Lawmakers in both the House and Senate health and welfare committees asked many questions that Heifetz said were beyond the scope of his analysis.
For example, they asked whether eliminating dental care for adults on Medicaid would drive up costs elsewhere. If low-income Idahoans couldn’t afford routine cleanings and checkups, would they end up in the hospital emergency room with an abscess in their jaw?
“Idaho has really seen, I think, over my 16 years (in the Idaho Legislature), an attempt to be penny wise but have wound up being pound foolish,” said Rep. Sue Chew, D-Boise.
Several legislators made references to cases in the past decade wherein Idaho Medicaid changed how or how much it paid providers, and it made it harder for people on Medicaid to get services.
Heifetz said that, in his experience and research, when a state raises its Medicaid payments, new agencies and providers don’t come rushing to take Medicaid patients. But the opposite can occur when states cut their payment rates, he said.
The firm’s presentation showed that Medicaid could cut its payment rates to doctors and other professional health care providers by 7.5% and save $21 million, for example.
But that also “could exacerbate” the existing problem of Medicaid patients struggling to find a primary care provider or specialist who takes their health plan, he said.
The firm will deliver its final recommendations in April.
As one legislator pointed out, that report is scheduled to arrive after the legislative session ends.
