Last week, the DC Council’s Committee on Health took steps to restore one of the deepest reductions in Mayor Gray’s proposed fiscal year (FY) 2013 budget. The mayor has proposed cutting $23 million from DC’s publicly-funded health insurance program by eliminating hospital coverage, but the health committee restored emergency room and other hospital care by recommending saving through other avenues. However the Gray administration is pushing back against some of the savings identified by the committee, such as assumptions of slower caseload growth in key health programs.
DCFPI believes that the committee’s actions should be carefully reviewed to make sure the savings are legitimate, and we hope these adjustments will stand up to scrutiny so an important health benefit for the 23,000 residents in the DC HealthCare Alliance (Alliance) can be maintained.
The Alliance is DC’s locally-funded health program for uninsured residents who are not eligible for Medicaid, Medicare, or other public insurance programs. Because many DC residents became eligible for Medicaid as a result of federal health reform, the Alliance now primarily serves undocumented immigrants.
Mayor Gray’s proposed FY 2013 budget would eliminate hospital-based services for Alliance participants, including both in-patient and out-patient services. The mayor has argued the cut eliminates a “double-payment” because many hospitals receive a lump sum from the city ‘ known as “disproportionate share hospital” or DSH payments ‘ to address the uncompensated care they provide, while also getting reimbursed for care to Alliance participants.
Yet DCFPI and others have noted that eliminating hospital coverage will likely mean that many Alliance members will not be able to get needed care, and those that do are likely to be billed by hospitals, creating serious debt and credit problems for this vulnerable population.
The Committee on Health, led by At-Large Councilmember David Catania, shares these concerns and worked to identify savings that could be used to maintain the Alliance’s hospitalization coverage. The list of savings includes:
- $7 million in Medicaid managed care due to an adjustment in projected participant enrollment;
- $3 million from increased Medicaid pharmacy rebates;
- $2.4 million by maintaining current year enrollment levels for some community-based services, including the EPD and ID/DD waiver programs;
- $2 million in Alliance managed care due to an adjustment in projected participant enrollment;
- $1.8 million through lower projected cost settlement expenditures;
- $1.5 million due to higher use of the non-emergency transportation benefit;
- $1.4 million in additional revenue certified by the Chief Financial Officer in dedicated taxes;
- $1 million by keeping the Medicaid growth rate comparable to the current fiscal year;
- $252,000 from the Department of Health Care Finance from vacant positions; and
- $103,000 from the Deputy Mayor for Health and Human Services due to the elimination of one full-time position.
DC’s Chief Financial Officer (CFO) would have to sign off on these changed assumptions before the savings can be certified and used to restore the Alliance cut. Since the health committee’s actions last week, committee staff has been meeting with the Gray administration and the CFO to go over the proposed savings. The Gray Administration has expressed concern about lowering some growth rate and participant enrollment assumptions, noting that the city could face fiscal problems if the projections prove to be too low.
DCFPI agrees that projected health care costs should be based on best possible information. The Committee on Health has provided information to demonstrate why it believes the assumptions built into the proposed FY 2013 budget. We are hopeful that a careful review of the committee’s actions will show that many of the identified savings are realistic, so that funds can be used to maintain hospital coverage for the 23,000 DC residents who are only able to get health care coverage from the Alliance.
