Latest Medicaid deficit relatively minor, DHS official says

A top official with the state health department says the agency plans to rely in internal measures to close an estimated $92 million deficit.

DHS Deputy Director Kevin Moore says the department plans to rely on contract negotiations with HMOs and Care Management Organizations for BadgerCare and FamilyCare respectively and reducing fraud to try and close that gap.

But Moore makes clear that his department is focused on implementing the overall health insurance plan Walker put forward, which means changes from the Legislature would likely be unnecessary at this point.

“The changes that were in the state budget, the delay that moved forward, right now we are truly looking at that as our blueprint and moving forward in implementing that,” Moore said in an interview with

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The gap is relatively minor, the DHS second-in-command says, and agency officials aren’t looking at any drastic changes to close the hole — and nothing that would require legislative action or money from the state’s projected $1 billion surplus.

“This is a pretty common occurrence, and it’s something that we’re going to continue to work through,” Moore said. “But again, when you’re looking at a Medicaid budget that’s $7 billion, we’re talking about a fraction of a percent swing right now. And so we believe it’s very manageable for us to be able to address that over the next 18 months.”

Moore said the shortfall is partially driven by a change to the fed-state matching rate. In fiscal year 2015, the fed’s portion of the matching rate will drop to 58.27 percent, which will leave the state with $52 million less in funds than originally budgeted.

Otherwise, Moore said the rest of the shortfall is the result of updates to possible expenditures for the calendar year 2014. He notes that since DHS has to work out new contracts with providers and vendors and get new numbers on changes in enrollment, the math is bound to change. In addition, he says the projected budget numbers are built on relatively “conservative” fiscal estimates.

The three-month delay of changes to BadgerCare eligibility did result in $23 million less in expenditures, but Moore tries to stress that such a move wasn’t done to save money.

“The purpose of the three-month delay was not about the finances. It was truly about making sure that people who were trying to access through November — and were completely stalled — had time through the end of the enrollment period, which goes to the end of March, to be able to access insurance through the exchange,” Moore said.

The agency strategy extends to pushing Wisconsin residents toward the federal health insurance exchange. DHS has been relying on grassroots partners throughout the state, while the department itself has been using “targeted communications” such as letters and phone calls to notify Wisconsinites about changes in health insurance options. Moore says the feds are starting to roll out advertising in southeastern Wisconsin, which is why DHS isn’t trying engage in an “air campaign.”

While Moore says the strategy has been successful, the numbers are still far below initial projections by both the feds and the state. Through Dec. 28, only about 43,000 Wisconsinites had signed up for coverage through the exchange. Moore said he expects a surge of activity near the March 31st deadline. But when pressed on what the backup plan is if the state doesn’t come close to its expected enrollment numbers, he says the state has done all it can within the framework of the federal health care reform.

“What you’re really talking about is not a Wisconsin issue, it’s a national issue,” Moore said. “I think the question then, as a former secretary here would say, is ‘Is the problem in the implementation or is the problem in the policy?’ From our perspective, at that point, the policy discussion has already been done. We’re at the point of saying, ‘Look: If we get people to the website, make sure they have the resources, we can’t force them to buy anything.'”

— By Jason Smathers