Interim Report of the Medicaid Study Group

In order to deliver high-quality care in a cost-effective manner, Governor Donald L. Carcieri established a Medicaid Study Group, with RIPEC’s assistance, to propose options for a sustainable and fiscally responsible Medicaid program and improving effectiveness and efficiency. 

The Study Group consisted of 26 members, representing provider groups, representatives from State government and RIPEC members. The Study Group organized into two subcommittees – the Subcommittees on Service Delivery and Finance. Both subcommittees have met four times since they began its work in October 2006. The Subcommittees discussed various proposals, and identified recommendations and options which are being transmitted to the Governor.

Rhode Island’s Medicaid program’s budget is growing rapidly, from $1.1 billion in fiscal year 2000 to almost $1.8 billion in fiscal year 2007, with State taxpayers paying about one-half of this latter amount. While this increase is not unique to Rhode Island (Medicaid expenditures are rising everywhere), the growing cost of Medicaid represents a potential critical situation for Rhode Islanders who are dependent upon Medicaid services.

However, it should be noted that healthcare is a major employer in Rhode Island, therefore, federal or state policy changes could impact Medicaid recipients as well as the State’s economy.
To address Medicaid’s future financial sustainability it was first necessary for the Study Group to determine what factors and programs were driving costs.

The salient programmatic and financial implications derived from the findings of the study group are obvious. The root causes are increased spending on services provided by institutions for both acute and long-term care. Therefore, information to support fundamental reforms of the system will require a thorough and comprehensive examination of the following:

  • Medicaid’s financial sustainability over the next five years, with sustainability defined in terms of the program’s impact on the State’s overall financial situation;
  • The principle of reimbursement and the way institutional reimbursement is established;
  • Benefit design, which includes a comparative analysis of the amount, duration and scope of benefits;
  • The methods and procedures used to conduct utilization reviews for high-cost cases, particularly those where multiple agencies are involved;
  • The roles, responsibilities and resources that the Executive Office of Health and Human Services will need to effectively provide for the coordination of Medicaid policy and service delivery and oversight; and
  • The feasibility of shifting more program expenditures from fee for services to managed care.
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