Indiana Medicaid cuts likely to be followed by more

The Office of Medicaid Policy and Planning has approved without comment a series of emergency rules that it expects to save a total of $4.1 million over the next six months, spokesman Marcus Barlow said.

But that will make up for only a small portion of the $31.4 million shortfall the agency anticipates for the fiscal year that ends June 30.

"This is just one round. We expect more changes in the future," Barlow said. Advocates said the rule changes, including prior authorizations for non-emergency hospital stays and lower reimbursements to podiatrists, chiropractors and home care attendants, will affect elderly and disabled people the most. Services for those groups account for about two-thirds of Medicaid spending in Indiana and provide the biggest targets as lawmakers and the administration of Gov. Mitch Daniels seek to rein in a state Medicaid bill expected to increase by about 25 percent during the current fiscal year and the next one.

Public health insurance advocate David Roos of Covering Kids & Families of Indiana said the rule changes taking effect Saturday were the least controversial and easiest for Indiana Medicaid to make.

"The remaining cuts will be much, much tougher. They will be down to the bone," Roos said Thursday.

The emergency rules were instituted without the usual public notice and comment procedures, but they expire in 90 days. They can be extended once for another 90 days. Barlow said the Medicaid office will aim to make the cuts permanent.

They are expected to save the state $12.3 million during the full 12 months of fiscal year 2012 and $13.3 million in 2013, Barlow said.

Spokeswoman Sally Morris of The Arc of Indiana, which represents developmentally disabled people, said the cuts caused concern but there's more worry about the unspecified ones still to come.

"It is a huge concern what will happen with the Medicaid program," she said. Capping dental services at $1,000 per year for Medicaid members over age 21 will save about $1.5 million over the next six months, Barlow said. The cap is expected to affect fewer than 7,000 of Indiana's roughly 400,000 adults on Medicaid, he said.

However, the cap could have the unintended effect of driving some Medicaid recipients with severe toothaches, infections and other dental emergencies to hospital emergency rooms, thus shifting costs to hospitals, since hospitals are barred by law from turning away patients, said Doug Bush, executive director of the Indiana Dental Association.

"We don't think this is going to result in a net cost savings to the state," Bush said.

Barlow said the dental association was painting "a doomsday scenario."

The Indiana Hospital Association issued a statement noting "the harsh, fiscal realities the state faces and that tough decisions must be made."

"At the same time, it is true that in the absence of routine care, all roads lead to the emergency room," the statement said.

Dr. Bernard Emkes, past president of the Indiana State Medical Association and one of the group's Medicaid experts, said the cuts were fair given the drop in state tax revenues. He noted that all health care providers absorbed an earlier across-the-board cut in Medicaid reimbursements.

"The dilemma is we're caught between a rock and a hard place. The state has no money right now," said Emkes, an Indianapolis family physician.