New Medicaid rules could cost Minnesota over $750 million

Medicaid rules promulgated by the Centers for Medicare and Medicaid Services (CMS) are not the most gripping topic, and yet this week I’d put them in the category of “breaking and important news,” thanks to a new report by a U.S. House Committee on Oversight and Government Reform (and reported by Congressional Quarterly). The report found that over the next five years, the new rules would reduce federal medicaid payments to Minnesota by an estimated $758 million (close to $50 billion nationwide). The rules would restrict how Medicaid pays states for things like outpatient services, school-based health services, graduate medical education and case management services.

To get these estimates, the Committee asked each state Medicaid Director how much it would cost them to implement the new rules. Forty-three states responded, which the House Committee says represents 95% of total Medicaid spending. They also helpfully posted the full response from the Minnesota Department of Human Services. It’s worth a read, as it gives some insight into the potential impact on Minnesota. Here’s an excerpt:

“We have significant concerns with all the rules you have highlighted in your request. A common frustration with the proposed regulatory changes is the unneccessarily disruptive effect they will have on our beneficiaries and our health care programs.”

The Bush Administration projects a much lower cost figure for the new rules – $15 billion over five years – than the estimates found by the House Committee report.  $50 billion or $15 billion – either way, the new costs certainly couldn’t have come at a worse time for our state.

-Katherine Blauvelt

About Katherine Blauvelt

Katherine Blauvelt served as the Minnesota Budget Project’s policy analyst from 2007 to 2009.
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