A rare piece of good news on the budgetary front. It looks like payments to Medicaid HMOs will plateau next year — a welcome respite from the 4-percent to 7-percent annual increases that have been typical in recent years.
As David Ress reports for the Richmond Times-Dispatch, an outside consultant is crunching numbers to set the rates the state will pay next year to its Medicaid HMOs, who administer the taxpayer-funded program for the poor and disabled. Said Patrick W. Finnerty, director of the Department of Medical Assistance Services: “It’s not looking like we’re going to see the kind of increases we had been seeing; it looks like that is flattening.” Indeed, HMO profits are hefty enough that the state actually could order a cut in Medicaid HMO rates.
The HMOs have cut expenses while improving quality by introducing programs such as preventative care for newborns, diabetes and asthma.
What the story doesn’t tell us is what percentage of the total Medicaid budget the HMOs account for. If it’s a large percentage, Virginia can look forward to a slowdown in the increase in total Medicaid spending, one of the state’s main budget busters. If it’s a small percentage, then the Kaine administration should seek to extend the HMO concept to a broader cross-section of the population.
