State Medicaid Agency Considers Cutting Reimbursements By 25 Percent | KGOU

State Medicaid Agency Considers Cutting Reimbursements By 25 Percent

Apr 12, 2017

A state budget crunch could lead to less money for health care providers in Oklahoma.


Oklahoma’s state Medicaid agency may cut Medicaid reimbursements rates by up to 25 percent to make up for a state budget shortfall of almost $900 million. Preston Doerflinger, the state’s budget director, has asked the Oklahoma Health Care Authority to prepare for a possible 15 percent reduction in state appropriations. This means that companies providing services to Medicaid patients might not be fully reimbursed by the government. 


For every $1 the state spends on Medicaid, the federal government gives $3 back to Oklahoma.  So a cut in state Medicaid reimbursements could also result in less money for the state government.


Reimbursement rates have decreased in recent years, and even a small cut could make a big impact on long-term care facilities like nursing homes, said Nico Gomez, former chief executive officer of the Oklahoma Health Care Authority. Last year, Gomez warned against the consequences of a reduction in reimbursement rates, and now, as executive director of the Oklahoma Association of Health Care Providers, which represents nursing homes in the state,   he expressed similar concerns in an interview with The Journal Record:


Gomez said an average facility has about $220,000 in Medicaid losses annually. A 5-percent cut would raise those losses to $330,000. About 100 nursing homes would close, displacing 8,000 residents and resulting in 8,000 people laid off from those businesses. Since 2000, 116 long-term care facilities have closed, leaving 301 remaining.

Rural nursing homes are at a greater risk, because those nursing home owners typically have a higher percentage of Medicaid-reliant patients, Gomez said

The state legislature is also considering the elimination of pharmacy, equipment and mental health benefits from the state Medicaid program, SoonerCare. 


While the cuts have not been made yet, Gomez said that health care providers have to prepare for whatever may happen.

“If we don’t panic and we end up getting significant cuts, that does tremendous damage to people and to businesses,” Gomez said. “But if the cuts don’t happen and we hit the panic button, we end up upsetting people for no reason.”

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