During the state budget process, the Kasich administration and the Ohio General Assembly disagreed, somewhat bitterly, on Medicaid budget predictions. Once the budget was approved, the Kasich administration stated that the General Assembly failed to appropriate enough funding for Medicaid predicting a Medicaid budget shortfall of $588 million in 2018 and $794 million in 2019.
The administration says that the House and Senate assumed savings from hospitals and nursing home rate reductions but then prevented the Ohio Department of Medicaid from making those reductions. As a result, every other Medicaid provider was at risk of significant across-the-board cuts and beneficiaries were at risk of losing important services. The administration predicted that a 7% across the board provider cut would likely be needed.
On a call held on August 31, Office of Health Transformation Director Greg Moody announced the administration’s plan for closing the shortfall – a plan that avoids cuts to physician reimbursement.
- Governor Kasich vetoed spending increases for nursing facilities (Veto Item 24) and rate protections for hospitals (Veto Item 35).
- Ohio Medicaid will use the House appropriated funds associated with the nursing facility rate changes to reduce the funding gap.
- Ohio Medicaid has proposed to reduce hospital spending $1.0 billion over two years, including a rate cut that can be relaxed if Medicaid underspends and the overall budget is stable.
- Ohio Medicaid has proposed to continue the Ohio Comprehensive Primary Care (Ohio CPC) pilot, increase the managed care plan payment withhold to 2% (Veto Item 32), synchronize fee-for-service and managed care payments, and other reforms that save $252 million over two years.
Ohio Medicaid is working directly with impacted health care professionals to refine each proposal and implement the plan. Again, this action is meant to eliminate the need, at least the immediate need, for an across-the-board cut in physician reimbursement.
To further elaborate on Ohio CPC, the Ohio CPC pilot was continued, but not funded in the state budget bill. The Ohio Department of Medicaid plans to continue funding the pilot for those practices who are already participating. Opening the Ohio CPC program up to all practices will be delayed (was supposed to happen in 2018). Practices who were eligible for participation in the original pilot, but decided to wait to join CPC until 2018, will be added to the program.