Medicaid waiver cuts state medical costs

Rhode Island's use of a global Medicaid waiver granted during the second term of the Bush Administration has been effective in cutting medical costs, the Wall Street Journal reported, although the savings claimed by the newspaper, other publications and state officials vary widely.

Medical spending under the first 18 months of the waiver came in at $2.7 billion, according to the WSJ, which cited data from the Rhode Island Executive Office of Health and Human Services (EOHHS). The projections reached as high as $3.8 billion for that period.

However, an EOHHS report on Medicaid spending trends noted the program cost about $1.8 billion to operate in 2010, with costs rising about 2.5 percent a year, putting the expenditures in line with long-term projections.

Other states have looked to cut costs by changing income eligibility, trimming other benefits or tying providers to quality and outcomes.

The waiver to date has focused primarily on reducing the percentage of Medicaid enrollees receiving long-term care in nursing facilities, according to a report by state officials and an independent evaluation released in late 2011 by the Lewin Group. However, other initiatives, such as switching all of the 210,000 Medicaid enrollees to electronic medical records and changing the payment structure for emergency room visits, have yet to be implemented.

Lewin's report pegged the savings from the waiver to date at around $35 million, although the Providence Business News marked the savings at closer to $22 million.

To learn more:
- read the Wall Street Journal article
- here's the Medicaid long-term report (.pdf)
- check out the Lewin report
- read the Providence Business News article