Raleigh, N.C. — State budget forecasters say the Medicaid program will likely face a smaller shortfall this year than last, but problems with computer systems and backlogs are making forecasting difficult.
At a meeting Wednesday morning, the Department of Health and Human Services, the governor's budget office and the legislature's Fiscal Research Division all agreed the shortfall for the current fiscal year probably won't exceed $130 million.
That's a sizable sum – about 3 percent of the program's budget – but it's far less than in recent years, when Medicaid shortfalls ran as high as $500 million.
However, all three groups noted that there's a great deal of uncertainty in that number because of data they don't have. That includes potential claims by tens of thousands of backlogged Medicaid applicants, delayed or erroneous cuts to the state's benefit program and thousands of backlogged Medicaid provider claims stuck in NCTracks, a troubled billing system launched last summer.
"We do not have a Medicaid forecast," Fiscal Research Division analyst Susan Jacobs bluntly said, warning that the uncertain data means the projections could change "drastically."
DHHS Chief Financial Officer Rod Davis said 81,000 Medicaid applications are backlogged – 59,000 that came in through the federal online marketplace from eligible people who had not previously been covered and 22,000 that came in through county offices.
Those applications carry the risk of retroactive claims, which makes predicting their cost difficult.
"Things are tracking fine for now. We’re just concerned about things we don’t know about," Davis said.
The state has spent less of its annual Medicaid budget to date than at this time last year, he said, even though claims are up. About 30 percent of claims are not being paid by NCTracks.
Jacobs predicted the cost of those unpaid Medicaid bills, both from the backlogged applications and delayed claims, will top $356 million. The state's share of that is about $120 million.
"We don’t know what the real backlog is. We are estimating," she said. "That has huge implications if we do not have that number right."
Medicaid Chief Financial Officer Rick Brennan also said the state will fall about $48 million short on its budgeted cuts from last year.
Lawmakers included in their 2013-14 budget about $147 million in "savings," premised on cuts and changes to benefits. Many require approval by federal program officials, which can take months.
Brennan said some cuts were being delayed, but others were simple mistakes. About $20 million in budgeted "savings" for 2013 was from cuts that lawmakers had already implemented in 2012.
A budgeted cut to physician visits, Brennan said, would send a projected 15 percent of affected Medicaid patients to emergency rooms instead, which would end up costing the state more money than the cut would save.
Rep. Marilyn Avila, R-Wake, called the errors "sophomoric," blaming the staff at DHHS.
"Are we working under too much pressure with too few people?" she asked Brennan. "Why didn't somebody bring this to the attention of the new people who were brought in? It should have never been implemented to begin with."
"At what point did you realize this was not an achievable savings?" asked Rep. Nelson Dollar, R-Wake, the House budget chief. "Why was that not specifically brought to this committee?"
Brennan said staff at Medicaid realized as early as the end of 2013 that some of the cuts could not be realized. He said he discussed the issue with the Fiscal Research Division and the governor's budget office but could not provide the documentation of that conversation that Dollar demanded.