Transforming Medicaid in Ohio

One of John Kasich’s first acts as governor was to create the Office of Health Transformation (OHT).  All state agencies that have had a hand in administering Medicaid in Ohio now report directly to the OHT including the Department of Health, the Department of Aging, the Alcohol and Drug Administration, Mental Health, Developmental Disabilities and Job and Family Services.  Streamlining and modernizing Ohio’s Medicaid programs is a top priority of OHT because Medicaid costs account for more than 30% of the state government spending.

Ohio Medicaid covers two primary benefit groups.  The first group, “Covered Families and Children” (CFS), includes low income parents, pregnant women, and children up to age 19.  CFS constituted almost 80% of the enrollees in 2010, but less than 1/3 of the costs.  The second group, “Aged, Blind or Disabled” individuals (ABD) accounted for just over 20% of the enrollees, but almost 70% of the costs.  Long term care services in home, community and facility based settings account for a large proportion of those costs.

Enrollment is increasing at an alarming rate due to demographics (as our baby boomers age and suffer disabilities) and economics (with high unemployment and decreases in employer sponsored insurance coverage).  Changes in federal policies may also place additional burdens on the states.  Key priorities for OHT center on streamlining and reorganizing the manner in which services are provided and reducing and reforming the payments made for those services.

Streamlining Services

In order to lower administrative costs, OHT will seek to combine related services for individuals now dealing with multiple providers and payer sources.  “Medical Homes” will coordinate care of Ohioans who are dually eligible for Medicare and Medicaid.  Mentally ill individuals who also suffer from health problems will have behavioral and medical care consolidated and overseen at a state level rather than separately by County Boards and ODJFS respectively.  Medicaid programs for people with disabilities will all be managed thru the Department of Developmental Disabilities rather than multiple agencies.

All Home and Community based waiver programs (PASSPORT, Ohio Home Care, Ohio Home Care/Transitions Aging Carve out, Choices and Assisted Living) will be combined into a single waiver program.

Payment Reform

Ohio Medicaid utilizes two systems of payment.  “Managed Care” involves a private health insurance company that provides or arranges to provide a package of medical benefits for enrollees in exchange for a set amount of money per member per month.  Almost all CFS receive managed care.  “Fee-For Service” payments are made directly to Medical providers based on a preset schedule of payment.

OHT’s payment reforms center on reducing fee for service payments and promoting less expensive managed care plans.  Payment formulas under the 2011 Budget reduce payments for nursing homes by 6%.  Hospitals and other medical providers will also see reduced payments.

Another budget initiative is to combine Medicaid funding for long term care in facilities with community based care monies in a single unified long term care line item rather than in “silos” for various types of care.  OHT hopes emphasizing and prioritizing waiver programs over more expensive nursing home care will reduce overall costs while allowing Ohioans to receive care in the environment they prefer.

The Office of Health Transformation’s top priorities are increasing administrative efficiency and financial sustainability.  Both will be necessary to provide care to more people with less money.  The new polices, however, may further stress health care providers and make it more difficult for Medicaid enrollees to access the care they need.

Navigating the complex and ever changing Medicaid system is difficult.  An elder law attorney can help in understanding the system and creating and implementing a plan to get needed medical care.

Written by:
Marta J. Williger
330-686-7777

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