3:06pm: Hotline with Dave Weekley

Use of Medicaid surplus generates questions among W.Va. lawmakers

CHARLESTON, W.Va. — West Virginia lawmakers are already asking questions about the state’s plans to use millions of dollars in Medicaid money.

Gov. Jim Justice’s administration expects to have $309 million more for Medicaid spending than is anticipated to be necessary for the coming year.

They say that’s because the state’s unemployment rate has declined and the population has too, meaning fewer West Virginians qualify for the federal health care program for the poor. Meanwhile, a match of roughly three federal dollars for each dollar the state puts in makes the money go farther.

Dave Hardy

“We felt really confident that we could make a different approach on what to do with this $309 million,” state Revenue Secretary Dave Hardy told the Senate Finance Committee today.

So Justice and his budget staff have proposed using that pot of Medicaid money in several ways:

First, using some of it to bridge an estimated gap of $108 million in General Revenue for the coming fiscal year.

Second, setting aside $150 million for a Medicaid Families First Reserve Fund. It was described as being like a Rainy Day Fund for the possibility of Medicaid funds running short in future years.

Third, additional spending of almost $50 million on child health and welfare initiatives such as eliminating the waiting list for intellectual and developmental disabilities waivers along with dedicating more money for child protective services.

The reserve fund for Medicaid has received the most scrutiny so far. When asked about it on MetroNews’ “Talkline,” Hardy said the governor selected the approach as a priority.

“Here was the governor’s conclusion: We wanted to create a Medicaid reserve fund. We did not want to take these funds away and maybe three years from now have a problem with Medicaid,” Hardy said.

Eric Tarr

Also speaking on “Talkline,” Senator Eric Tarr, R-Putnam, questioned the establishment of the fund. Tarr is the vice chairman of Finance but is leading the committee for now while Finance Chairman Craig Blair recovers from a serious traffic accident.

“I have a couple of concerns. One is putting $150 million into a reserve account with Medicaid,” Tarr said, asking how the reserve would be affected by federal requirements.

“The problem I see with it is, when you put it into Medicaid that is going to dictate how it is spent. So can the Legislature reach in and move that to anywhere else?”

Tarr suggested the state could benefit from more flexibility than a reserve fund would offer. He suggested the state’s needs are changing and that the money could instead be used for economic development.

“Why pocket the money if we can use that money to generate economic development in West Virginia,” he said.

Senator Ron Stollings, D-Boone, also asked about the reserve fund during a budget presentation.

Stollings, a doctor who is also running for governor, wondered if the money should instead be used to raise reimbursement rates for West Virginia hospitals. Hospitals have long complained that the Medicaid reimbursement rate is less than the actual cost of treating patients.

“Has there been any consideration of changing any of these reimbursement rates to pay a little bit more so that our hospitals can keep their doors swinging?” Stollings asked.

“If you turn that $309 million into a billion dollars and actually paid the cost of delivering the service, maybe these hospitals could stay open.”

Hardy responded that’s a better question for officials with the state Department of Health and Human Resources.

Stollings concluded, “I think we need to magnify the use of our Medicaid dollars and not be as stingy as we have in the past.”

Delegates were also considering the proper use of the Medicaid money.

Mick Bates

Delegate Mick Bates, D-Raleigh, said he’s concerned about continued use of Medicaid dollars to patch budget holes, but pleased to see the increased investment in programs to benefit children’s health and well-being.

“I am pleased that some of the money being used is going to fund these additional initiatives,” said Bates, who is the lead Democrat on the House Finance Committee.

“So yeah, we are taking from Medicaid, but we’re reinvesting some of that into Medicaid programs with the IDD waiver and enhanced investment in child protective services.”

Bates said the establishment of the reserve fund “gives me a little bit more comfort,” but he would like assurances that the money is really set aside and won’t provide a financial temptation.

He noted that the state receives a match of three dollars for every one from the federal government for Medicaid spending. And West Virginia’s health needs are well-documented.

“All the health care needs in the state of West Virginia have not been met,” he said.





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