Medicaid will cost Virginia half a billion dollars more than expected

Medicaid will cost Virginia half a billion dollars more than expected
Dr. Jennifer S. Lee, director of the Virginia Department of Medical Assistance Services. (Ned Oliver/Virginia Mercury)

Virginia’s lawmakers were smacked with an unexpected $462.5 million Medicaid bill in November that they have to pay in the biennial budget, and now they’re debating how to stop it from happening again.

The nearly half-billion dollar shortfall is mostly rooted in the state’s overly optimistic estimate of how much money it would save by putting its most expensive members — those with disabilities and older adults — into a new health plan, called Commonwealth Coordinated Care Plus.

(The shortfall isn’t related to Medicaid expansion. The federal government will pick up the vast majority of that tab.)

The Department of Medical Assistance Services, which manages Virginia’s Medicaid program, has already outlined a plan to rectify the problem and prevent it from happening again.

But Sen. Ryan McDougle, R-Hanover, has a plan of his own, and it involves creating a new state agency that would do the job for DMAS.

“Missing the estimates by the magnitude of almost a half billion dollars is a significant enough miss, in my opinion, that we need to go in a new direction,” he told the Senate Education and Health Committee on Thursday.

He has filed a bill to create an independent state agency, dubbed the Office of Medicaid Fiscal Oversight and Accountability, that would take over Medicaid’s forecast, oversee its expenditures and review the program’s fiscal impact, among other responsibilities. He said Thursday that it will not cost the state any additional funds because it will simply involve transferring the functions away from DMAS into the new office, which will still work under the governor’s direction.