South Dakota won’t get Medicaid expansion from this Legislative Session. We may not get Medicaid expansion this year.
Governor Dennis Daugaard held a press conference this noon at the Capitol to discuss the letter released Friday by the Centers for Medicare and Medicaid Services outlining the feds’ embrace of the Governor’s suggestion that Indian Health Service pay 100% of the cost of IHS patients’ services at associated non-IHS facilities. This new federal policy is in place now; non-IHS facilities who want to work with IHS facilities can sign a contract now to prpvide care for IHS patients referred from IHS facilities.
Here are the complications:
- Sanford and Avera can’t just up and take Medicaid-eligible IHS patients and get paid entirely by the feds instead of billing the feds and the state through Medicaid. Sanford and Avera have to sign complicated agreements. Governor Daugaard says existing IHS/non-IHS contracts involve “ridiculous detail.” Along with the letter, CMS sent the state a draft of a pre-approived template contract that could streamline the process, but that document still needs to be revised.
- Once we get non-IHS facilities on board, IHS will still not wholly replace the $67 million dollars the state currently spends paying for health care for IHS-eligible patients who seek care at non-IHS facilities. The new interpretation from CMS still requires IHS facilities to be “coordinating participants” in IHS-payable care. If an IHS-eligible and Medicaid-eligible patient in Sioux Falls goes straight to Avera for treatment, IHS won’t pay for that treatment, and the state will still foot a portion of the bill. (An important note: the CMS letter emphasizes that nothing in this new policy interpretation allows the state to require Indians to go to IHS facilities for care or to delay providing care to to Indian patients until they’ve gone to an IHS facility first.)
- Whatever fraction of the $67 million in current state Medicaid costs we can capture will not be captured by the state itself. It is up to our non-IHS hospitals and clinics to decide they want to sign agreements with and take patient referrals from IHS facilities. As the Governor explains it, those non-IHS facilities have no upfront incentive to participate in such deals: they get paid the same whether they bill the state and feds via Medicaid or switch to the new policy and bill the feds via IHS. The only incentive the non-IHS providers have to participate in the new IHS policy is that they will capture the dollars necessary to secure expansion of Medicaid, which would allow those non-IHS facilities to get paid for serving a whole new cadre of patients, the South Dakotans who don’t have Medicaid or any other coverage right now.
That last point is remarkable: the Governor has quite neatly thrown the ball into the hospitals’ court. South Dakota’s health care providers have been urging the Governor to expand Medicaid from when the Affordable Care Act first offered that opportunity. Having secured the IHS payment interpretation for IHS patients, the Governor can now turn to those hospitals and say, “Get us the money. Bill IHS instead of state Medicaid for an amount equal to the state’s share of Medicaid expansion, and you get expansion.”
But even if the non-IHS facilities play ball and pursue those savings, do they have any guarantee that the Legislature will pass Medicaid expansion? The Governor says the remaining two weeks of this Session are no enough to give the matter proper attention; he spoke this noon about looking for a special session this year or even waiting until the 2017 Legislature to expand Medicaid. The Governor refuses to act until all the numbers are added up and we know that implementation of the IHS payment policy can happen fast enough to generate enough savings to cover Medicaid expansion costs. Non-IHS providers will now have to put the money on the table to put naysaying Republicans (and that’s all who’s left to oppose Medicaid expansion, right? them and the Koch brothers?) on the spot and leave them with no fiscal reason to oppose Medicaid expansion.
As you can see from the above points, the federal government did not, contrary to my first reading this weekend, just drop $67 million into South Dakota’s budget. Governor Daugaard emphasized that there is no new pot of money from which appropriators can fund teacher pay or anything else. The money isn’t there until the non-IHS providers make the deal to take payment from IHS. Those providers have no reason to do that unless they see Medicaid expansion at the end of that policy rainbow.
And we may not get to the end of that rainbow until the 2017 Session. The federal government would drop $373 million into our budget to expand Medicaid right now, regardless of where our IHS patients get their care. We could spend $12 million this year to get that pot of gold and provide health coverage to 50,000 more South Dakotans. But that’s a fiscal bridge too far for the Governor, who said in today’s press conference that he will ask Appropriations to remove from his budget proposal that $373 million in federal dollars he had asked the Legislature to authorize for Medicaid expansion.
We’ve given up three years of benefits; Governor Daugaard appears to be prepared to give up another year.
Update 2016.03.01 11:07 CST: View the full press conference here:
My questions for the Governor come at 22:00 and 32:30.