Shortfall seen in Medicaid

Friday, May 21, 2004 | 9:44 a.m.

CARSON CITY -- Medicaid, the state-federal program that provides health care to poor people in Nevada, is $61 million short this fiscal year.

Chuck Duarte, director the state Division of Health Care Financing and Policy, said he is asking the Legislative Interim Finance Committee for permission to move money from next year's budget into this fiscal year to cover the shortfall.

That would require shifting $20 million of state general fund money into this year along with the federal allocation and other revenues that are budgeted for 2005. And Duarte estimates that next fiscal year the program will be $17 million short in state funds.

The Legislature budgeted $972.6 million in federal, state and other funds for Medicaid this fiscal year. Of that $308.8 million comes from the state.

Duarte said the problem arose because of two factors. He said there were higher medical costs for the aged, blind and disabled. And there was a higher number of people in that category who were enrolled.

Switching to a new computer system exacerbated the cash flow problem, Duarte said. He said the division decided last October to give cash advances to doctors and hospitals for treating Medicaid patients.

The cash advance was done because the new computer system being installed was not functioning properly. Duarte said there is still a backlog of claims that have not been processed.

"There is a high level of frustration" by hospitals and doctors about the slow payments, he said.

First Health Services designed and installed the $24 million computer system and had said it would be stable by April. But the company was wrong, Duarte said.

Many of the claims were improperly rejected, and there were problems with the new coding that had to be put on the bills by doctors and hospitals, Duarte said.

Duarte said in January that $90 million had to be advanced to health care providers who had submitted bills that had not been processed.