visimoney
TLDR:
In an effort to address a projected $114 million Medicaid funding gap, West Virginia officials are proposing an increase in the fee that Medicaid charges managed care organizations. The state would increase the fee, use the increased revenue to pay the state’s increased share to providers, and then seek reimbursement from the federal government at the increased level. However, Senate Finance Chairman Eric Tarr has expressed skepticism about increasing the provider tax, citing concerns about potential future financial burdens. Tarr questioned whether the state could face an even greater gap if federal policy changes and the benefits for Medicaid recipients continue to increase.
Medicaid, a joint federal and state program that helps cover medical costs for low-income individuals, is projected to face a $114 million funding gap in West Virginia for the coming fiscal year. The funding gap is attributed to adjustments in the Federal Medicaid Assistance Percentage (FMAP), increased prescription drug costs, and the “unwinding” of pandemic-era enhanced eligibility standards. To address the increase in state expenses, officials are proposing an increase in the fee that Medicaid charges managed care organizations.
If the proposed provider tax increase is rejected, another option would be a straight supplemental appropriation of $114 million. During a budget hearing, Senate Finance Chairman Eric Tarr expressed reservations about increasing the provider tax, citing concerns about the state potentially taking on a greater future financial burden. Tarr raised questions about the sustainability of the proposed solution and the potential impact of federal policy changes on Medicaid benefits.
Cynthia Persily, secretary for the Department of Human Services, emphasized that the managed care organization tax increase is just one step that West Virginia needs to take to address the Medicaid budget. Persily said the state also needs to examine service provision, rates, and quality of service.
Overall, officials are grappling with finding a solution to the Medicaid funding gap while considering potential long-term financial consequences and the need to strengthen the Medicaid budget through various means.
