“The Pennsylvania House of Representatives has passed a Fiscal Year 2017-18 general fund budget that could have significant implications for the state’s Medicaid program. House Bill 218 (HB 218) was approved along strict party lines and referred to the Senate Appropriations Committee on April 4. At $31.5 billion, the House Republican budget proposal is considerably more austere than the $32.3 billion budget proposed by Governor Wolf in February, and would reduce overall state spending by just under one percent compared to the current fiscal year.
“Among other funding reductions, and without specifying how such savings would be achieved, House Bill 218 contained the following Medicaid appropriations:
- MA – Capitation: $178 million less than the Governor’s Budget
- MA – Fee-for-Services: $2.6 million less than the Governor’s Budget
- MA – Long Term Care: $25 million less than the Governor’s Budget
- Behavioral Health Services: $4 million less than the Governor’s Budget
- Home & Community Based Services: $2.2 million less than the Governor’s Budget
- Services to Persons with Disabilities: $2.1 million less than the Governor’s Budget
“Without further explanation, House Majority Leader Dave Reed, R-Indiana, told reporters that implementing managed care ‘lock-in’ – by which Medicaid recipients could change insurance plans only once per year – would achieve $100 million in Medicaid savings. Whether the remaining Medicaid savings would require cuts to reimbursement rates, waiting lists for HCBS waiver programs, or still-to-be-announced policy changes is not yet known.
“HB 218 did include the funding for the consolidation of four Departments—Aging, Drug and Alcohol Programs, Health, and Human Services. Over the last month, Legislative Committees have been holding hearings regarding consolidating the Departments and forming one Department of Health and Human Services (HHS). Separate legislation would be needed before the departments could consolidate, and lawmakers have expressed concerned about the lack of details available thus far about plans to bring the agencies together as of July 1st-the proposed start date for this action. Legislative committees held two hearings in Harrisburg on this issue with another hearing scheduled in Pittsburgh on May 1, 2017. More information about the hearings held thus far can be found here. Governor Wolf has released a website that details draft HHS unification legislation and organizational charts. The website also includes a way for the public to provide feedback.
“Both chambers of the General Assembly and Governor Wolf are now expected to continue budget negotiations, with a final agreement expected before the next fiscal year begins on July 1st.”