Kentucky reaches out for help to rebalance $140M Medicaid shortfall

In an effort to close a $142.4 million budget gap in the state’s Medicaid budget over the biennium, Kentucky Governor Steve Beshear has announced a series of requests for information (RFIs) to understand how other states are dealing with increased rolls during the national recession. Key areas the governor hopes to understand include performance-based management, fraud prevention and community-based care programs.

Kentucky’s statewide Medicaid caseload is over 800,000 and an average of 3,000 new cases are added each month, officials said Monday. While measures have already been taken to secure the state’s $6 billion Medicaid budget, gaps remain from a shortage in federal funds and few dollars saved through cost containment.

“While it is critical that vulnerable Kentuckians eligible for this program receive the care they need, it is just as critical that we manage every taxpayer dollar as wisely and resourcefully as possible,” Gov. Beshear said in a statement.

The Medicaid budget rebalancing plan will not compromise education, public safety or other state programs, the governor assured. Instead he wants to utilize public-private partnerships to implement cost saving measures and improve health outcomes. Key areas the governor hope to elicit information includes RFIs for:

  • Performance-based managed care programs for all Medicaid eligibles in the Commonwealth
  • Pay-for-performance physician and primary care provider incentive plans
  • Performance-based managed care dental programs for children
  • Performance-based pharmacy capitation programs
  • A long-term care coordination program for institutional and community-based care

“Our objectives are to utilize public-private partnerships to control cost growth, to provide incentives for health care providers to control costs and to improve the health status of our citizens,” Gov. . I also look forward to receiving the recommendations of the Medicaid Cost Containment Task Force and ideas they have to augment this proposal.

In addition to the RFIs, the Cabinet for Health and Family Service will soon be releasing a RFP for a vendor to manage high cost radiologic and imaging services, which is estimated to save $7 to $10 million annually.