March 4th, 2010

AUDITOR GENERAL’S AUDIT

Argall: Do you feel that your Dept. has successful addressed all major issues identified by Auditor General’s audit?

Sec: We have gone through and have addressed or are close to finishing addressing all the issues, including the special allowance program regulatory package. We also need to be continuously looking to improve results and being effective using dollars.

Smucker: Audit by Auditor General, Medicaid applications. It seems you questioned assumptions made in the study and questioned samplings. Are you discounting the audit. The general public needs to know that the money spent is being spent well. Your original answer was not satisfactory. What has the department done…have there been internal audits done?

Secretary: Increased checking for increase in income of clients, strengthened electronic checks. We also fixed logic problem in one of the computer programs.

Smucker: Do we conduct internal audits regularly?

Secretary: Yes. We have internal audits being done and additional efforts under federal directions and other entities that help as well.

Smucker: Internal audit in that specific area and has it concluded something different?

Secretary: After audit we tried to confirm and verify results. We have had over 30 audits done of county assistance office, with no findings. A database was built for those audits to incorporate any findings and to be sure that if there was a finding that it would be corrected and not be repeated.

ENAHANCED FMAP FUNDING

Farnese: There is are $848mil increases in enhanced FMAP. I understand that Medicaid is a driver in this budget, but why is it necessary to cut $66mil to hospitals that serve many people getting Medicaid. This really doesn’t make sense. In stating that, what would it the budget look like without the FMAP extension??

Secretary: The enhanced FMAP has $620million worth to us, which constitutes 7.5% of the budget. Were we not to have it, the implications would be profound in regards to service delivery system. Community level services would be affected. 100,000s of people (clients, employment)would be impacted were we to implement a reduction of that size.

CMR WAIVERS

MJ White: CMR waiver budget. Overall we are cutting services to the vulnerable citizens. Less able to meet needs to those we are serving and those on the waiting list. Moved people out of hospitals and into community, and we have a very needy population.

Secretary: Calls for us to add 150 new people to the waiver program. We are annualizing participation. Total budget increment of $40million. The reduction is a reduction in the rate for the providers (1% reduction) First reduction we have proposed in this administration for this program.

PAY FOR PERFORMANCE

Costa: Pay for performance. Now budgeting $25mil to compensate for 08-09. Describe how that works. Positive/healthy outcome examples, how it benefits us.

Secretary: Pay for performance is about making sure our investment in Medicaid is producing better health outcomes. We have taken 12 measures, set up to managed care plans and asked to see improvements in these measures. We have seen statistically significant improvement in 9 of 12 measures. (Controlling HBP, comprehensive diabetes care, cholesterol management, early prenatal care, breast cancer screenings)

MCO

Costa: I see a 4% increase for MCO for physical health and a 2% increase for MCO with behavioral health. Explain.

Secretary: As a department, we have a legal obligation to provide actuarially sound rates.

PRESCRIPTION DRUG REBATES

Vance: In the budget, there is $102 in rebates for drugs. If it actually happens when will this savings be realized?

Secretary: This is different from previous proposals. It will be ready for the coming fiscal year and we will obtain the rebates ourselves.

Vance: How long can we wait for this plan to pass before we look to other options?

Secretary: We are evaluating our options and we can simply work as hard as we can to keep thefederal government knowing we are interested.

Gordner: These federal rebates on drugs, are they in the President’s budget proposal or in the health care reform?

Secretary: It is found in various versions of the health care bill. It avoids the controversy of the smart pharmacy plan. These are effective cost-based solutions.

Gordner: You’re correct that the “carve out” wasn’t well received. Have you had any recent conversation at the federal level?

Gordner: We are tracking this and continuing dialogue. We realize we are taking risks but they are well evaluated.