CNMI Health Providers Asked To Help Cover Medicaid Costs

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10 percent fund matching plan considered by government

By Haidee V. Eugenio

SAIPAN, CNMI (Saipan Tribune, July 9, 2012) – The Fitial administration in the Commonwealth of the Northern Mariana Islands (CNMI) is considering asking health service providers such as private clinics, pharmacies, and the Commonwealth Healthcare Corp. to help build a separate account that will be used strictly to locally match federal Medicaid funds, but Lt. Gov. Eloy S. Inos said this is just one of the options being looked at and is not firmed up yet.

Under this proposal, each provider would be asked to move 10 percent, for example, of their supposed Medicaid reimbursement to a separate account that will be used as local matching fund.

Right now, the CNMI government provides Medicaid funding through appropriation or inclusion in the annual budget.

The Fitial administration's revised fiscal year 2013 budget is proposing an additional $1 million in Medicaid matching funds, from the previous submission of $2.5 million.

Inos said one of the options considered is to have "earmarks" for Medicaid matching fund.

A revenue-generating bill could be passed to set aside proceeds of that proposal to be used for local matching.

Another way would be for healthcare providers to set aside 10 percent-or a higher/lower percentage-of their supposed reimbursement and build up that account to be used only for local matching.

"What it does is it shields the funding from other uses. The key is, 'what is the source?'" Inos told reporters on Friday.

He added that this is a "policy decision."

To illustrate his point, Inos said a service provider charges $100 for Medicaid, and that consists of 55 percent federal funds and 45 percent local matching funds. But for simplicity sake, he used a 50 percent federal and 50 percent local matching scenario.

"The CNMI government takes your billing and bills Medicaid $50, under a 50-50 matching. [The CNMI government] receives that $50 [from federal], puts it together with the CNMI's $50, to pay you $100. Before you get paid, they [CNMI] take out $10. And puts it here, and build that up for local matching. In other words, they as the providers are actually providing, they're the ones paying for the local match. But they get the benefit of it in turn," Inos said.

He said this could be established by law. Inos said input from providers will be sought.

"It's not one of those at-will. It's really in a way a tax but it's only on the service providers," he said, adding that this includes CHC.

He said this "cost-sharing" is also done in other states.

Gov. Benigno R. Fitial earlier told reporters that he asked assistant attorney general Jim Stump to look into this option, referring to a 10-percent deduction from Medicaid reimbursement that providers get to help build up an account for future local matching.

Last week, the Medicaid office talked about a plan to have a bill introduced that would create a reserve account for specific taxes that will be solely intended for Medicaid matching requirements. For example, the Legislature can increase certain taxes such as for tobacco and a portion of that tax will go directly to the reserved account for the Medicaid program.

At present, all appropriations and collections of the government go directly to the general fund and, until it has funds, that’s the only time the government can pay out obligations, such as that for Medicaid.

Currently, the CNMI pays 45 percent of the program’s operations, while the federal side is 55 percent.

Medicaid is a health program for people and families with low incomes and resources.

Inos also said he's not aware that the Medicaid program is having personal favoritism as to who gets paid first and by how much. He said there are criteria being followed.

He also spoke of plans to eliminate optional services being provided to program beneficiaries, which the Medicaid office disclosed last week.

If this plan pushes through, the optional services that will be cut could include clinic services, optometry services, other practitioner services, dental, physical therapy, occupational therapy; speech, hearing, and language disorders; prescribed drugs, dentures, prosthetic devices, eyeglasses, wheelchair, medical supplies, rehabilitative services, and transportation to off-island facility.

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