Medicaid spending to jump 3.4% in 2013 as enrollment, costs rise

With the majority of state funds going toward Medicaid programs, total Medicaid spending is expected to increase 3.4 percent in fiscal 2013, compared to a 1.1 percent jump this year, according to a report issued yesterday by the National Governors Association (NGA). Last year, total Medicaid spending jumped 10.6 percent.

Medicaid spending continues to grow, thanks to increased enrollment, which grew 3.3 percent this year and is projected to rise 3.6 percent in 2013, as well as higher-per-capita healthcare costs, noted the report.

"Despite the recovery, when you would expect Medicaid case loads to go down, Medicaid costs continue to go up," NGA Executive Director Dan Crippen told Reuters."Healthcare is still the story, still the challenge."

To curb escalating Medicaid expenditures, some states have cut provider payment rates, limited prescription drug benefits costs, expanded managed care and placed enrollees in medical homes, among other cost-cutting efforts.

Utah, for example, clawed back $5.6 million in Medicaid overpayments and realized another $4 million in savings by scrutinizing providers' use of off-label psychotropic medications. Meanwhile, Alabama is considering hiring a chief financial officer and actuary to manage Medicaid costs.

Several other states are turning to accountable care to control costs in their Medicaid programs, according to a report released last week from the Kaiser Family Foundation. States' interest in ACOs stems from the Patient Protection and Affordable Care Act and other economic pressures, FierceHealthFinance previously reported.

To learn more:
- here's the NGA report (.pdf)
- read the Reuters article

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