Raimondo team seeks wiggle room to hit $70M Medicaid savings target

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Elizabeth Roberts_162615

PROVIDENCE, R.I. (WPRI) – The Raimondo administration is seeking special authority from the General Assembly to ensure the state hits its ambitious goal of shaving $70 million off Medicaid costs this budget year.

A provision tucked into the governor’s proposed budget asks lawmakers to give “authority to institute fiscal controls” to Health and Human Services Secretary Elizabeth Roberts so she can make sure the savings target is reached by June 30, the last day of the fiscal year.

The policy at issue – dubbed Reinventing Medicaid – has been one of the administration’s highest-profile projects. It encompasses more than 30 initiatives designed to reduce the cost of the state-federal health insurance program, which accounts for roughly 30% of Rhode Island’s state budget.

Last November, the state’s official number-crunchers warned that the various changes were on track to fall short of the $70 million in savings. In response, Roberts and Medicaid Director Anya Rader Wallack said the administration was still committed to achieving their “aggregate savings target” of $70 million.

“We recognize that we may not achieve the full savings initially projected for each of the 30+ initiatives, but I am confident … we will achieve greater savings in others to offset any shortfalls and close FY 2016 with the full general revenue savings,” Wallack wrote in a Nov. 9 memo to her staff.

According to the House Fiscal Office, there is a gap of $8 million in “undefined” savings between the official projected cost of Medicaid this year and how much the administration expects it to cost once the full $70 million in savings are booked. The House analysts said lawmakers may need to give Roberts the fiscal-controls authority immediately to ensure the $8 million is saved.

The Medicaid numbers are expected to be highlighted at a House Finance Committee hearing Tuesday, and it remains to be seen whether lawmakers will give Roberts the broad latitude she wants in determining how to cut Medicaid costs.

Larry Berman, a spokesman for House Speaker Nicholas Mattiello, said his boss “is aware of the issue and he awaits an explanation at the upcoming House Finance Committee budget hearings.”

Mike Raia, spokesman for the Executive Office of Health and Human Services, said the proposed authority would ensure Roberts has the legal ability to hit the $70 million in savings across the Medicaid program, even if the reductions don’t come exactly where lawmakers said they should when they wrote the current budget.

“This gives the secretariat the authority to manage to a bottom line, essentially,” Raia said.

Some of the Reinventing Medicaid initiatives that are currently falling short of their savings targets are “longer-term reforms” that are expected to pay dividends down the road, Raia said. “Others were more quickly implemented, and we’re going to be able to see even greater savings than we expected,” he said.

“And it is important to note that our reforms achieve these savings without making cuts to eligibility or reducing benefits and while enrollment grows,” he added.

Separately in the proposed budget, the Raimondo administration said it wants to cut Medicaid costs even further in the 2016-17 budget year that starts July 1, for an additional net savings of $38 million in state general revenue. The governor’s aides have described the ongoing Medicaid changes as an effort to shift state resources away from consumption spending and toward future-oriented investments.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter: @tednesi

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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