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The harbinger of delayed Medicaid payments

West Virginia’s worsening budget problems are about to be felt in the state’s massive health care delivery system.  The state Department of Health and Human Resources’ Bureau of Medical Services has sent letters to hundreds of health care providers that their Medicaid payments MAY be delayed.

Medicaid is the state-operated health care program for lower income residents that pays for doctor and clinic visits, hospital and nursing home stays and other medical needs.  The letter to about 24,000 providers from Acting Commissioner Cynthia Beane says, “Absent an upward trend in revenues or a funding solution identified, the Bureau for Medical Services (BMS) will be unable to continue to process claims at the same consistent level that has been maintained.”

Providers are being told that, for example, a clinic or hospital bill that would normally be paid by the state in 20 days may now be delayed up to two weeks, depending on the ever-changing status of state revenue collections and budget plans for next fiscal year beginning July 1st.

“We want to make sure they’re aware of the situation in case they would have a hardship created by receiving a payment a couple of weeks late,” said DHHR Deputy Secretary Jeremiah Samples on Metronews Talkline this week.

West Virginia has about 535,000 people on Medicaid.*

West Virginia Hospital Association President and CEO Joe Letnaunchyn said delays in reimbursements could cause cash flow problems.  “When you go from a couple of days to a week then you get into payroll periods, and then you get into trying to find cash to make payroll.”

The West Virginia State Medical Association was more pointed in its comments, calling the possible slowdown in payments “disappointing and totally unnecessary.”  The association, which represents 2,700 physicians, says the problem could have been averted if the Legislature had passed a $1 per pack increase in the cigarette tax.

“Politics ultimately won out over a common sense solution,” said executive director Brian Foy.

The Medicaid predicament is the latest, but certainly not the last, associated with the economic downturn in our state.  Passing a cigarette tax increase or cutting “the fat” from government will not change the more long-term structural challenges as a result of the accelerated deterioration of the coal industry, the slump in natural gas prices and the subsequent impact on business and individual tax collections.

Barring a rapid rebound, the letter to Medicaid providers serves as a harbinger which should cause policy makers to think seriously about all the functions of state government to determine the services taxpayers can afford to provide.

*(DHHR says the cash flow issues are not related to the expansion of Medicaid under Obamacare.  The services for the newest Medicaid recipients under the Affordable Care law are paid for entirely with federal dollars this fiscal year.)





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