When the state’s tax collections sagged because of the lingering effects of the last recession, it was one of the big pots of money for covering shortages in other programs.
The financial strength of Medicaid matters because the health plan for the poor insures 1.6 million Georgians, including three of every five births. Every day, it pays out $36 million in medical claims.
In the budget he left for his successor, Nathan Deal, then-Gov. Sonny Perdue used a few bookkeeping gimmicks to tap into it.
For instance, shifting the timing of payments to the companies that administer Medicaid saved a whole month’s payment. Instead of paying in advance for service, the state paid afterward, omitting one whole month from the fiscal year in the transition. The next fiscal year will contain 12 months of payments again.
“We were able to gain $230 million last year that we were able to use to help balance the budget last year when it was so bad, and now it’s basically put back in there,” said House Appropriations Chairman Terry England, R-Auburn. “That eases up pressure on doctors, nursing homes and hospitals, all the providers.”
The pain of the budget tricks flowed downhill as the care-management organizations that administer Medicaid passed it along to the providers of the medical service in the insurance program for the poor. The 2013 budget stops that.
“The governor has funded the holes in Medicaid,” said Alan Essig, the executive director of the Georgia Budget and Policy Institute, an Atlanta think tank.
Deal even recommends that the Legislature put in enough money to cover some growth, which is important because medical inflation and enrollment growth combine to raise the cost yearly for Medicaid. The state has kept its medical inflation, 5.2 percent, below the national average, 7.3 percent, according to Community Health Commissioner David Cook.
While the yearly national payment per covered person was roughly $6,000 in 2009, Georgia’s was around $4,000, the second lowest among 16 states in the Southeast.
Cook is overseeing a redesign that could help slow cost increases further, but that won’t be in time to see benefits in the coming fiscal year.
“On the Medicaid side, all the action right now is around DCH’s redesign process,” said Cindy Zeldin, the executive director for Georgians for a Healthy Future, an advocacy group.
Another change Deal is recommending is reversing a 0.5 percent cut in the reimbursement rate providers got when the current budget took effect. Nursing homes will get a second bump as the state adopts new cost estimates upon which reimbursement rates are based.
“Even the patient-advocacy groups are glad that the provider cut was restored because we’re always concerned about access,” said Linda Lowe, a lobbyist for several advocacy groups.
Doctors often stop taking new patients when reimbursement rates make treating them unprofitable.
The reimbursement rates haven’t increased in 10 years, according to Donald J. Palmisano Jr., the executive director of the Medical Association of Georgia.
“This is important since Medicaid physicians are already paid at a rate that is less than the cost of delivering the service,” he said.
Deal is including $20 million to replace funds Congress had supplied temporarily to tide states over during the worst of the recession. His added money also accounts for the cost of allowing 21,000 state workers to enroll their children in the PeachCare for Kids program for the poor.
The state’s employee plan is getting $100 million extra spread over the balance of this year and all of the next as a boost in the employer share of premiums. The Board of Community Health modified the plan, though, to address a looming deficit.
Those modifications include eliminating coverage for some costly treatments, such as bariatric surgery and enriched incentives for workers to enroll in the option that rewards them for having a healthier lifestyle. As a result, Georgia now operates the country’s largest wellness plan, Cook said.
The House and Senate appropriations committees must still review and sign off on Deal’s recommendations. Friday, both Chairman England and Senate Majority Leader Chip Rogers said they anticipate few disagreements.