CONCORD – Health and Human Services Commissioner Nick Toumpas said he’s seeking a 25 percent increase in state spending to support Medicaid payments to nursing homes and acute care hospitals that previously sued the state.
The agency’s current $3.8 billion budget in spending from all sources is the largest in state government.
The request is for another $1 billion that includes a net upgrade of $321 million from state tax and fee sources.
Toumpas told a state budget review panel Tuesday that 80 percent of the increase would come from paying nursing homes and hospitals the rates they have sought from the state.
Last year, the hospitals sued the state in federal court alleging that its Medicaid rate of payment violated the constitution.
This came after the Republican-led Legislature ended a longstanding practice of sharing in a legal scheme to use free care spending to leverage more federal dollars.
This reduced state aid to hospitals by more than $200 million over the current two budget years.
During the recession, state caseloads on public assistance programs such as welfare, Medicaid and Food Stamps soared.
Agency staff became overworked, Toumpas said since the number of clients jumped 15 percent from 2009-11 while the number of employees in the agency dropped by the same percentage.
“Our staff are feeling extremely stressed as a result of the shortfalls we have in a number of areas,” he said.
Now that the economy has begun to recover, Toumpas said it’s disconcerting that these caseloads haven’t dropped, which has kept his agency costs higher than during similar economic cycles.
“Caseloads grew dramatically in the past several years, and while now stable, they have not declined in any significant way consistent with historical trends,” he said. “What we are seeing is the caseloads are remaining stable, they are not going down at all.”
The current budget relies upon saving $16 million in state dollars by converting Medicaid from a fee-for-service to an HMO-like, managed care model.
The state has issued contracts to three private vendors but they have all been unable to build sufficient networks because many hospitals refuse to join and accept lower reimbursement rates.
“If the hospitals do not join, then it will not get done,” Toumpas told reporters after the hearing.
Senate Finance Committee Chairman Chuck Morse, R-Salem, said changing to managed care is essential to maintaining costs in this program, the single largest item in the entire state budget.
Toumpas agreed and said he remains committed to the goal of the program.
“I believe absolutely that managed care has to happen,” he said in trying to reassure Morse. “I don’t have a Plan B in terms of doing this.![]()
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