Bill seeks to reform Pa. Medicaid spending

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The legislation, Senate Bill 600, proposes that Pennsylvania adopt new technology to monitor and identify unnecessary or wasteful health care services and procedures in the Medicaid program.

The legislation would require the state to pick a technology company and launch a program within 90 days of the bill’s passage, according to Sen. Scott Martin (R-Lancaster), who introduced the bill.

The idea is that by providing more information, patients and providers could make better health care decisions and therefore reduce Medicaid spending.

“If we can reduce the cost of care, that’s a win for everyone,” Hilda Shirk, president and CEO of SouthEast Lancaster Health Services said.

Still, Shirk wonders how the technology will work, what kind of burden the technology might process, and if the resources spent to get the technology up and running would be offset by the benefits.

Medicaid blends federal and state funding to insure children, poor adults and others. Pennsylvania, which refers to its Medicaid program as Medical Assistance, is one of the highest spenders per Medicaid enrollee in the country, a news release from Senate Republicans said. 

With national health care reform potentially translating into a cut in federal Medicaid funding to states, Pennsylvania needs to find ways to save on the program, Martin said.

Martin noted that Medicaid accounts for approximately one out of every four dollars in the annual state budget. 

In fiscal year 2015-16, the federal government spent about $15.3 billion on Medicaid in Pennsylvania, while the state spent about $10.6 billion, bringing the total to $25.9 billion. Medicaid spending has been growing steadily for the past 10 years, according to the state’s Department of Human Services.

“Escalating costs are placing an enormous strain on the state and federal budgets, even as health care outcomes consistently fail to meet the expectations of patients,” Martin said. “It makes good sense for lawmakers to see what other states have done to improve care and cut costs so we can create a health care system in Pennsylvania that reduces the burden for patients and taxpayers.”

Martin is looking to a technology firm called MedExpert to help Pennsylvania lower spending. In March he invited the California-based company to discuss its record in other states during a hearing of the Senate Majority Policy Committee in Harrisburg.

MedExpert, which uses technology to collect data and monitor patients to improve care, is currently working with Alaska’s Medicaid program. It has reduced misdiagnosis rates, improved outpatient care, cut waste, and trimmed Medicaid costs by over 14 percent, MedExpert claims.

Implementing a similar program in Pennsylvania could generate between $2 billion and $4 billion in annual savings, experts predict.

“How we address the exploding cost of health care is one of the most important public policy questions facing lawmakers,” Martin said, adding that failing to reduce costs will lead to “greater budgetary challenges and massive tax increases in the future.”