Platte Institute: Medicaid reforms could save Nebraska millions

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Nebraska Medicaid needs reform, not expansion, as part of the federal Affordable Care Act, a report from the Platte Institute for Economic Research says.

The report released Wednesday said Nebraska has taken an impressive first step toward reforming its Medicaid program with managed care. Managed care organizations authorize, arrange, provide and pay for delivery of medical and mental health services to enrolled clients.

But, the report said, there is "substantial room for improvement."

Jim Vokal, Platte Institute chief executive officer, said the organization is providing policy information on issues that could come up in the Nebraska Legislature's 2015 session. The institute's mission is to advance policy alternatives that foster limited government, personal responsibility and free enterprise.

Medicaid expansion has been debated twice, but both times failed to reach a vote. The bill's sponsor, Lincoln Sen. Kathy Campbell, said after last session's failed attempt that she would survey the political landscape next session, when the state has a new governor and at least 17 new senators, in deciding what to do with any future expansion bill. 

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Meanwhile, the Platte Institute is weighing in on policy alternatives and reform strategies by looking at what other states, including Kansas, Illinois, Pennsylvania and Florida, have done.

"Nebraska Medicaid costs are simply too high," said Dick Clark, the institute's director of research. "They're higher than the national average. They're higher than our neighboring states' cost. They've nearly doubled in our state since 2000. And they're growing faster than state revenues."

According to the Department of Health and Human Services, spending on Medicaid in July, when 232,839 people were eligible in Nebraska for Medicaid and the Children's Health Insurance Program, was $137,609,935.

That was down from one year previous, when those eligible numbered 246,664, and spending was $156,348,367.

But with the exception of five years, Nebraska Medicaid spending has increased every year since 1978, records show.

In comparing Nebraska Medicaid costs to other states in the region, in fiscal year 2010, the latest information available, Nebraska spending per enrollee ($5,894) was lower than enrollee spending in Kansas ($6,309) and Iowa ($5,920). But it was higher than the regional average of $5,660 and the national average of $5,192. 

Medicaid now serves poor children, pregnant women, older Nebraskans and people with disabilities. Expansion would bring in low-income adults — about 54,000 newly eligible, including childless adults 19 to 64 who have incomes of zero to 138 percent of the federal poverty level.

Reforms to Nebraska Medicaid could include expanding health care plans from two, as federally required, to three or four, with specialized options for people with particular needs, Clark said. More competition among plans has been shown in other states to give increased benefits to patients at no additional cost to taxpayers, he said. 

The state could also offer employment support programs for people with disabilities, which can offer health benefits.

Better documentation is needed in existing programs, he said. And different program designs could prevent overuse of Medicaid benefits.

"We need to root out waste, fraud and abuse in the system," Clark said.

Like Pennsylvania and Illinois, Nebraska could consider investing in technology that sorts through eligibility data, Vokal said. In some cases, that has led to discovery of more than $300 million in fraud.

The savings could be used, for example, for supplemental payments to hospitals, clinics and others providing charity care.

"By implementing more comprehensive Medicaid reforms as an alternative to Medicaid expansion," the report said, "Nebraska could produce significant savings and improve the quality of care for those who rely on the program."

Reach the writer at 402-473-7228 or jyoung@journalstar.com. On Twitter @LJSLegislature.