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New Mexico Lawmakers Consider $69M Medicaid Funding Increase

January 27, 2016

During an upcoming 30-day legislative session, New Mexico lawmakers will consider a $69 million increase in funding for the Medicaid program, a third of the new money that state officials are requesting this year. Despite this request and new performance measures to track outcomes and hold the program more accountable, complete up-to-date information about the population utilizing the $5 billion Medicaid program and its effectiveness is unavailable.

A recent performance report from the staffers for the Legislative Finance Committee noted that certain measures are difficult to track as a result of a 120-day window that health care providers have to submit claims.

The state Human Services Department (HSD) allocates Medicaid funds to 4 competing managed care companies, including United Healthcare, Blue Cross Blue Shield of New Mexico, Presbyterian Health Plan, and Molina Health Care of New Mexico, to reimburse providers for treating Medicaid patients.

In an effort to reduce costs, state policymakers planned to emphasize preventive care, but analysts found that the state is now paying more per Medicaid patient than it did before implementing Centennial Care, an expansion and overhaul of the newly named program in New Mexico by Govenor Susana Martinez. Cost-saving measures were delayed.

Data from the analysts also showed a decrease in emergency room visits by 1 point—from 42 per 1000 in 2014 to 41 in 2015. It also showed a decrease in the rate of hospital readmissions for adults within 30 days of being discharged was 8% in 2015 versus the previous year’s 11%.

Legislative analysts also noted that they cannot distinguish how much the state is paying for each type of service a patient receives as the state previously delivered mental health and physical health services under separate agreements but no longer does.

Information on patient outcomes is delivered using health care effectiveness data information sets (HEDIS) from managed care organizations. In a 2015 accountability report, legislative analysts wrote that tracking Medicaid data, such as the cost of treating a patient each month, "is one way of gauging the effectiveness of the Medicaid program."

However, they said, "This is the first set of HEDIS data for the Centennial Care program and we do not have historical data to compare with. HSD has also not established targets for these measures. The data do reveal a notable lag behind available national measures." The report also noted a lot of variation among the managed care organizations.

Cathleen Willging, director and senior research scientist, Pacific Institute for Research and Evaluation, who has studied the state's mental health system for the federal government, said officials need to be more aggressive in filling data gaps in the program. "Claims data is really important to analyze the behavioral health system and other public sector systems," she said.

Most of the requested $69 million for the expanding New Mexico Medicaid program will cover the costs of a decreasing federal match. The government originally funded 100% of the state's Medicaid expansion under the Affordable Care Act, but will now decrease its contribution to 95% next year.

Currently, ≥820,000 New Mexicans, roughly 40% of the state's population, are enrolled in Medicaid. According to Human Services, 220,000 enrolled in the past 1.5 years, and the number without health insurance dropped by 7%. The cost of the program is projected to reach $7 billion by June 2017, as a result of more than 900,000 New Mexicans projected to be enrolled in the program by that time.

Some advocates of the Medicaid expansion worry that the department will have to cut services to keep up with the enrollment demand.

"Both of the proposed budgets have over $100 million of cost containment built in," said Bill Jordan, New Mexico Voices for Children, of budget proposals by the governor and Legislature, "so they're already assuming they're going to find over $100 million in savings somewhere, so that means cuts to something."

Officials hope new preventive measures will result in long-term cost savings.—Amanda Harvey


Horwath J. Lawmakers mull $69M funding hike for Medicaid. Farmington Daily Times. January 18, 2016.

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