JLARC Report: Tens of Millions Unnecessarily Spent on Medicaid
Dec 12, 2016 06:51 PM
Medicaid costs keep rising, so a new study of Virginia’s program has identified ways to cut millions of dollars out of the yearly budget.
A watchdog agency, the Joint Legislative Audit and Review Commission, made dozens of suggestions to state lawmakers. This report finds annually tens of millions of dollars go to unnecessarily high pharmacy bills, hospital and emergency department visits.
Now GOP lawmakers say they will consider new ideas to control spending, they also heard the the details of the latest Medicaid study.
"This report shows that we still have a lot of challenges, there's still a lot of work to do to improve our Medicaid system in the commonwealth of Virginia," said Delegate. Steve Landes, R-25th District.
Nonpartisan staffers recommended capping profits for insurance companies that manage care. They also said legislators could consider limits on the program's eligibility.
"The short- and long-term impacts to the state budget and to recipients would depend on exactly what changes were made and these impacts should be fully explored before making any policy decisions,"said Jeff Lunardi, JLARC report project leader.
Another proposal is to have higher-income families on Medicaid pick up a share of the costs.
The two-year study came up with at least 35 recommendations for improvements to Medicaid. Republican lawmakers say they feel vindicated.
"This whole study was fought tooth and nail because it was not going to find savings according to the administration, and it did, and I think it was very justified," said Delegate Kirk Cox, R-66th District:
"We were told that, 'we've done everything we can do,'" said Landes.
But not all aspects of this report were negative. In one instance Medicaid takes up more than a fifth of the state's general funds, and it is not growing as fast as other health care programs.
Spending per patient has also remained flat in recent years when accounting for inflation. Another burden on the state has been that in recent years hundreds of thousands of Virginians registered for Medicaid either because they just became eligible or learned they were.
Now lawmakers will review these proposals and consider bills heading into the legislative session in January.
Press Release from the Virginia House GOP:
RICHMOND, VA - A Joint Legislative Audit and Review Commission (JLARC) report released Monday highlighted the inefficiencies of Virginia’s Medicaid program. The report showed that Medicaid general fund spending grew by nearly 9 percent annually over the last 10 years, while total general fund spending increased by just 1.3 percent. Medicaid spending comprised 22 percent of the general fund budget in FY16, up from 14 percent in FY07. The JLARC report outlined 36 recommendations to improve efficiency and manage spending.
“Today’s JALRC report is proof that Virginia’s Medicaid program is a broken system in need of significant reform,” said House Speaker William J. Howell (R-Stafford). “Millions of taxpayer dollars are left on the table every year due to inefficiencies within the Medicaid system. It is no surprise then that Medicaid continues to grow at an alarming rate. Now is the time to implement serious reforms in order to rein in spending. Today’s JLARC report shows that Virginia’s decision not to expand Medicaid under the Affordable Care Act is the right decision.”
“The JLARC report validates the House’s position to focus on reforming Medicaid not expanding it,” said House Majority Leader Kirk Cox (R-Colonial Heights). “According to JLARC, Virginia taxpayers could have saved over $41 million annually. This type of waste is unacceptable. We must look at ways to reform Medicaid in order to protect precious taxpayer’s dollars. The General Assembly will use the JLARC recommendations to introduce reform legislation this coming session.”
House Appropriations Committee Chairman S. Chris Jones (R-Suffolk) said, “Virginia’s Medicaid program continues to grow at an unsustainable rate. The more resources consumed by Medicaid put more pressure on other areas of the budget like education, transportation, and public safety. The General Assembly will make the necessary reforms to ensure that taxpayer dollars are spent efficiently and effectively.”
“I want to thank JLARC for their report today on Virginia’s Medicaid program,” said Chairman Bobby Orrock (R-Caroline). “At a time when we are facing significant budget pressures, it is vitally important that we ensure state programs like Medicaid are run as efficiently as possible. This report will guide the General Assembly’s deliberations on how to reform Virginia’s Medicaid program.”
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