R.I. projected to save more than $100M in annual Medicaid savings

CRANSTON – Rhode Island is poised to save a cumulative $120 million through the next fiscal year through an ongoing reorganization of Medicaid, according to Gov. Gina M. Raimondo and state health officials.
In large part because of the state’s decision to participate in the federal expansion of Medicaid through the Affordable Care Act, Rhode Island cut its percentage of uninsured residents in half since 2013, and 275,000 state residents are now enrolled in Medicaid, according to state officials.
On taking office, Raimondo said at a news conference Friday, almost one-third of the state’s budget expenditures supported the Medicaid program, “and were growing at an unsustainable rate.”
“When I took over, Rhode Island was on an unsustainable path,” she said.
Reform measures undertaken in the current fiscal year are expected to yield $75 million in savings, she said. Another $40 million is projected in savings in the fiscal year that begins in July, assuming required approvals from the federal government on reimbursement rates and other changes.
The state spent $887.6 million on Medicaid in fiscal 2015, an amount that was projected to increase to $964.4 million this fiscal year. Reforms that were put in place that year instead had the effect of reducing the amount to $889.4 million.
In the Ocean State, 95 percent of residents now have insurance. The reforms begun this year include changing how providers are paid, and how care is coordinated, with incentives created for providers to better manage patient results.
Some specific steps included:

  • Contracting with accountable care entities to create financial incentives for improving the total costs and quality of care for Medicaid patients. Five to date have signed up.
  • Creating a program to serve Rhode Islanders with significant mental illnesses.
  • Creating a program that addresses substance use disorders to improve care outside the emergency services.

“We took the Medicaid expansion, which means over 50,000 Rhode Islanders have Medicaid now, have health insurance, and we’re cutting costs in the process,” Raimondo said. “Because we’re being smarter about how we pay for services. We’re coordinating care better. We’re keeping people in lower cost environments.”
The governor convened a working group of health care providers and officials last year, to recommend changes that would result in savings without reducing benefits. Two members of that effort, Dr. Ira Wilson, and Dennis Keefe, Care New England CEO, spoke briefly on Friday and said the efforts will result in improved care and a more efficient system.

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