WAITING IN WISCONSIN A bulletin about disability issues in Wisconsin written by Gerry Born March 2004 Vol. 3, No. 1 MEDICAID FUNDING PROBLEM PARTIALLY SOLVED Over the past several months, many meetings, e-mails, and discussions have taken place regarding the $400 million shortfall in state match for Medicaid. This would have led to a $1 billion deficit in Wisconsin's Medicaid program since $400 million in state funds generates another $600 million in federal funds for the $1 billion total. This is out of an $8 billion two-year budget. About $123.5 million of AB 909, the bill used to restructure some of the state's debt and use $175 million for budget problems, is to be used to help solve the Medicaid funding problem. This, however, leaves state funds still needed to solve the state's Medicaid funding shortfall at about $275 million. AB 909 only provides a temporary fix. Governor Doyle stated he hopes the rest of the $400 million can be made up through higher federal payments, cost savings, and increased revenue from growth in the economy. Here in lie some potentially big problems. Higher federal payments have been sought for almost a year now without success. The Department of Health and Family Services (DHFS) is working with the counties to attempt to get some federal match on funds counties are now paying with community aids or county funds that could receive federal match. This may take time but has a real basis for success in that counties do pay for services above the rate Medicaid pays. If the state and federal governments would allow rates to be based on real costs, hopefully additional federal match could be generated. The amount of the additional payments is not clear, but surely they will be far from all the funds needed to fully pay for the current Medicaid projected costs. At the same time Wisconsin is seeking federal help, our former Governor and now DHHS Secretary, Tommy Thompson, has declared the federal government will revisit tough new rules to curb the states' access to federal Medicaid funds. Cost savings in the Medicaid program can become very problematic. The basis for the funding problems are unanticipated caseload growth, increased utilization and intensity especially with higher use and cost for prescription drugs, and higher actual costs last year than were assumed in the 03-05 budget. Given these circumstances, where can cost savings come from? Caseloads are not likely to go down, and some changes can be made in administrative procedures like prior authorization to reduce some costs, but again this alone cannot generate the funds needed to make up for the shortfall that remains. Governor Doyle's third idea relates to expanded growth in the state's economy. The two major problems with this are that there is no guarantee the state's economy will grow fast enough to generate the funds needed, and there is no guarantee that the legislature will agree to appropriate these funds to Medicaid. This entire situation then leaves me with some serious questions and concerns. My main question relates to what DHFS and the Doyle administration are doing about the projected shortfall right now. If they are working to generate some additional federal funds and making a few technical changes to reduce costs in a very limited way, this would not be a serious problem for people who rely on the Medicaid program for critical parts of their lives. This would also suggest DHFS and Governor Doyle are expecting the legislature to appropriate additional state funds to solve the problem regardless of whether there is significant growth in the state's economy or not. On the other hand, if DHFS is planning to make significant cuts in provider rates including funds to counties for Medicaid Waiver services, reduce the services available to consumers, or start to limit the amount of services that are available to consumers, this situation would create a real hardship for people who rely on the Medicaid program and their families. In a recent meeting I had with Secretary Nelson, she indicated that DHFS and the Governor are not interested in reducing Medicaid benefits, eligibility, or provider rates, and there are no plans to do this at this time. Given this there is a need for DHFS to get additional funds from the federal Medicaid agency. DHFS is working on ways to do this as are the governors working with the Bush administration to obtain more federal funding for the states for Medicaid services. DHFS is also working on ways to address costs of Medicaid services such as through efforts to reduce high drug costs and the SSI managed care initiative that was in the 2003-05 state budget. Advocates will need to support DHFS in its request for the remaining funds for Medicaid from the state legislature likely in January to fully solve the Medicaid funding problems. This situation needs to be monitored closely. Unfortunately under current funding, waiting lists are growing and service costs are being curtailed. At times counties are even finding it financially necessary to revert to more restrictive and less integrated models of service. Consumers of Medicaid services can ill afford further cuts, nor can the counties or provider agencies. Significant cuts to provider agencies could possibly force them to shut down their services. More will be provided on this situation in future editions of "Waiting". CONSTITUTIONAL AMENDMENT REGARDING STATE FUNDING Republicans in the state Assembly are proposing through Assembly Joint Resolution (AJR) 55, a state constitutional amendment that would impose constitutional restraints on spending at both the state and local levels. These restraints include: caps on spending; require public referenda on new spending; a process for returning revenue growth above spending caps to taxpayers via automatic rate cuts; and detailed requirements for emergency funds and budget stabilization funds. If this were to pass, one can only wonder what impact it would have on disability waiting lists and services for people with disabilities. LITIGATION UPDATE Given the sad state of affairs for disability services across this country, lawsuits have become a way of life in many states to try to obtain needed services. Lawsuits have been filed in twenty-five states on behalf of people with developmental disabilities, with fifteen remaining active, seven having been settled, and six dismissed, four of which are being appealed. Several groups of advocates are studying the possibility of a lawsuit being filed in Wisconsin. After more than four years of trying to use the political process to obtain needed services for people on waiting lists and adequate funding for existing staff and agencies providing services to people in the service system, there is a significant number of consumers and advocates that now believes that the only way to get the state to respond to these growing unmet needs is through filing a lawsuit. Stay tuned. This bulletin was funded, in part, by the Wisconsin Council on Developmental Disabilities using federal funds provided under P.L. 106-402 through a grant authorized by the Administration on Developmental Disabilities and the U.S. Department of Health and Human Services. The information reported herein was compiled pursuant to the State Plan on Developmental Disabilities. Grantees undertaking projects under Council sponsorship are encouraged to express freely their findings and conclusions. Points of view or opinions do not, therefore, necessarily represent the official position or policy of the Wisconsin Council on Developmental Disabilities. The Arc Wisconsin provided additional funds to produce this bulletin. PEOPLE CAN'T WAIT ... SURVIVAL COALITION OF WISCONSIN DISABILITY ORGANIZATIONS 16 North Carroll Street, Suite 400 Madison, WI 53703 608-267-0214 voice/tty 608-267-0368 fax