Report Says Medicaid Inflated Budget Numbers

The Division of Medicaid inflated its prediction of a budget shortfall by $73 million, a new report by a legislative watchdog agency found. Medicaid Executive Director Rica Lewis Payton stands by her estimate of a $120 million deficit for fiscal 2003, which started Monday.

"I have been complete and accurate in my representation of the budget situation for Medicaid based on the best information that we had at the time and given the overall state of the economy,'' Payton said.

The report criticizing Medicaid was released Monday by the Joint Legislative Committee on Performance Evaluation and Expenditure Review, or PEER. It says Medicaid's 2003 budget is based on "an inflated growth rate of 22.5 percent rather than the Division's statistically projected growth rate of 9.7 percent.''

The lower growth rate is based on old spending patterns adjusted for changes in the program, the report says. Payton said she and other Medicaid officials have analyzed spending patterns and growth, and she believes the lower growth rate is unrealistic.

Officials have struggled for months with Medicaid's budget. The health insurance program for the needy, aged and disabled covers about 22 percent of Mississippians.

Legislators might meet in special session later this summer to consider putting more money into Medicaid. The program's enrollment has increased and prescription drug costs have risen even as the state has been receiving less money from the federal government.

The PEER report suggests ways for Medicaid to save money _ but Payton and other Medicaid officials say they have already started trimming costs in those areas. The report says, for example, that Medicaid should have tougher eligibility screenings before new patients can be enrolled. Payton said the agency enacted those tougher standards in early June. T

he report says Medicaid could save $6 million for every 1 percent reduction in enrollment of people who aren't qualified to be on the program. The report also says Medicaid should examine its contracts for non-emergency transportation. Payton told lawmakers last month that Medicaid is working on that.

The PEER report says Medicaid could save $7.7 million by changing the way it handles contracts. Payton said one part of the report points to a strength of Mississippi Medicaid.

In the federal budget year that ended in September 2001, Mississippi had the second-lowest Medicaid administrative cost in the nation. It spent $140 on administration for every person enrolled in Medicaid. Only Tennessee was lower, at $113 per person. The national average was $334 per person.

Sen. Hob Bryan, D-Amory, is a member of the PEER committee but was at an out-of-state conference last week when the Medicaid report was approved. He called the report "irrelevant'' and said legislators are not looking at the larger picture of how to improve health care.

"They're trying to blame the governor for the Medicaid problems, which is all the Legislature has been doing for years,'' Bryan said.