Idaho’s health care providers accepting Medicaid are about to take a hit to their wallets as state officials will cut reimbursement rates effective next month due to higher than anticipated costs.
In a memo sent to providers last week, Deputy Medicaid Director Juliet Charron said reimbursements will be slashed by 4% across the board.
“Healthcare expenses nationally continue to outpace inflation, and Medicaid is no exception,” Charron wrote.
Charron says new forecasts expect costs to balloon 19% above last year’s budget. The current Medicaid budget approved by state lawmakers factored in an 8% uptick.
“Medicaid is reviewing its operating expenditures and contracts to identify potential internal savings and will take appropriate actions,” she said.
But the vast majority of the Medicaid budget goes to provider payments and that this size of an unexpected cost increase cannot be covered by cutting internal services, according to Charron.
“While we continue to monitor budget needs, it is clear that waiting until the legislative session to make changes could have yielded steeper rate changes and service reductions.”
The news comes shortly after Gov. Brad Little ordered all executive branch agencies to cut their current year budgets by 3% excluding K-12 education.
The lower than expected tax revenue largely fell in the personal and corporate income tax collections, with state lawmakers this year including lower rates among their $450 million tax cut package.
Payments to tribal providers accepting Medicaid will not be affected.
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