Counties and Medicaid: A Snap Shot April 2010
Counties and Medicaid: A Snap Shot A Publication of the Research Division of NACo s County Services Department Written by: Kathryn Murphy, Research Associate April 2010 National Association of Counties 1
About the National Association of Counties The National Association of Counties (NACo) is the only national organization that represents county governments in the United States. Founded in 1935, NACo provides essential services to the nation s 3,068 counties. NACo advances issues with a unified voice before the federal government, improves the public s understanding of county government, assists counties in finding and sharing innovative solutions through education and research, and provides value-added services to save counties and taxpayers money. For more information about NACo, visit www.naco.org. For more information about this publication or the programs included, please contact: National Association of Counties Research Division a Phone: 202.393-6226 Web site: www.naco.org 2 County Contributions to Medicaid April 2010
April 2010 Dear County Official: Many of the counties across the country provide some form of support for the health care needs of their residents. This support varies from maintaining a significant public health care network, running hospitals, providing health care services for indigent residents to contributing to the non-federal share of the costs of the state Medicaid program. The National Association of Counties, as the Voice of America s Counties, frequently prepares publications that profile many of these various roles that counties have in the national healthcare network. This publication updates information on the counties that have a role in providing Medicaid services and an overview of the costs to those counties. Sincerely, Larry E. Naake Executive Director National Association of Counties National Association of Counties 3
Introduction With the continuing rise of caseloads and health care costs, counties are being required to contribute an increasing amount to cover the costs of Medicaid services. Obtaining data on exact costs incurred by counties is difficult due to the variety of state requirements and reporting methods. In addition, these expenses include only services classified under Medicaid, but counties may incur additional expenses for health services not covered under the Medicaid program. This snapshot provides an overview of the county responsibilities for Medicaid, but does not reflect any additional resources provided through the American Recovery and Reinvestment Act of 2009. Table 1 below shows the federal, state and county contributions to Medicaid. Table 2 outlines the federal share for states where counties are required to contribute, but the county data was unavailable. The notes section also explains the extent of county contributions required by each state. State Name Table 1 - Intergovernmental Contributions to Medicaid (County Share Data Available) Fiscal Year FMAP % Medicaid Notes State by State This notes section contains more detailed information of the county requirement obtained from previous research by the National Association of Counties: Counties Role in Healthcare Delivery and Financing July 2007 by the Community Services Division 2, a Survey of State Associations on Medicaid conducted by the Research Division in 2003, 3 an email questionnaire to State Association of Counties Executive Directors in April 2010, and other sources as noted. Federal Share (In Dollars) State Share (In Dollars) County Share (In Dollars) Arizona 2008 66.20 5,546,000,000 1,425,272,300 357,505,900 California* 2009 50.00 28,371,000,000 10,532,000,000 1,000,000,000 Florida 2008 56.83 8,114,000,000 6,608,000,000 200,477,595 New Hampshire 2008 50.00 615,000,000 530,000,000 105,000,000 Iowa* 2009 62.62 1,865,000,000 1,113,000,000 132,749,499 Minnesota* 2009 50.00 3,656,000,000 2,885,000,000 95,200,000 New York 2008 50.00 19,102,000,000 11,920,000,000 6,679,555,661 North Carolina 2008 63.75 6,395,000,000 4,082,000,000 517,161,526 South Carolina 2008 69.79 3,006,000,000 1,362,000,000 15,000,000 *FY 2009 Data The County Share estimates above were obtained from State Association of Counties. The federal and state shares were obtained from the National Association of State Budget Officer s 2008 Budget Expenditures Survey. Additional explanations of the data are provided in the Notes Section. 1 Arizona Counties contribute funds for administrative costs, long term costs, and acute care. The county spending estimate was obtained from the Program Summary Arizona Health Care Cost Containment System County AHCCCS- Related Payments updated September 2008 4. California California Counties contribute to two Medicaid programs: Mental Health Managed Care and In Home Supportive Services (IHSS). The county share for mental health managed care varies and is not subject to a sharing ratio; however, the county share is determined based on the gap between annual volume and the amount appropriated by the state budget each year. The 4 County Contributions to Medicaid April 2010
Table 2 - Federal Contributions to Medicaid (County Share Data Not Available) State Name Fiscal Year FMAP % Federal Share (In Dollars) Colorado 2008 50.00 1,398,000,000 Hawaii 2008 56.50 740,000,000 Idaho 2008 69.87 848,000,000 Illinois 2008 50.00 6,496,000,000 Indiana 2008 62.96 3,335,000,000 Michigan 2008 58.10 5,680,000,000 Montana 2008 68.53 531,000,000 Nevada 2008 52.64 684,000,000 New Jersey 2008 50.00 4,640,000,000 New Mexico 2008 71.04 2,199,000,000 North Dakota 2008 63.75 352,000,000 Ohio 2008 60.79 2,480,000,000 Oregon 2008 60.86 1,902,000,000 Pennsylvania 2008 54.08 9,596,000,000 South Dakota 2008 60.03 440,000,000 Texas 2008 60.53 7,813,000,000 Utah 2008 71.63 1,123,000,000 Wisconsin 2008 57.62 2,986,000,000 The spending estimates above were obtained from the National Association of State Budget Officer s 2008 Budget Expenditures Survey 1 and other sources detailed in the notes section. The Federal Medicaid Assistance Percentage (FMAP) was obtained from the FY 2008 percentages published in the Federal Register. county share of IHSS is 35%. All 58 counties in California contribute to Medicaid expenses, and last year counties contributed about $1 billion dollars total. Colorado Counties are responsible for up to 20% of the non-federal share of administrative costs. Florida Counties are required to pay a fixed amount ($55) per patient per month for nursing home residents and 35% of the non-federal share for the 11 th 45 th inpatient hospital days. In the 2007-2008 fiscal year, Florida s Counties were billed more than $200 million for their Medicaid obligations ($200,477,595.07 to be exact). There have been no changes in the last three years to the country requirements, but we are expecting our state Legislators to increase the fixed amount our counties pay for Medicaid nursing home services as soon as the federal stimulus dollars run out next summer. The proposed increase will be significant taking us from $55 per patient per month to $202. The last change was in 2001, when they increased the number of inpatient hospitals days by two. Idaho Counties provide approximately 50 percent of the non-federal share for administrative costs. Illinois Counties pay a portion the non-federal share of long term care costs. National Association of Counties 5
Indiana Counties are responsible for a portion of the non-federal share of long term care and mental healthcare costs. Iowa Counties pay the entire non-federal share for most services for persons with chronic mental illness or intellectual disabilities. Assuming that this is the percentage of Medicaid match, it is currently around 28% with the enhanced Medicaid match. For the past 12 months, the counties expended $132,749,499.79 in match on $477,143,501.01 in Medicaid gross expenditures. All counties are mandated to contribute to Medicaid. Approximately 50% of counties mental health & disabilities budgets are for Medicaid match. Because of the heavy reliance on counties to fund the match for disability services, our state Medicaid program has historically given counties some limited authority to make administrative decisions regarding Medicaid services--rate negotiations, determine number of waiver slots, service authorizations, etc. However, over the past five years, the Medicaid program has eliminated almost all local authority and increasingly looks upon counties simply as a source of revenue for the Medicaid program. When applying across the board budget cuts, the state did not treat those Medicaid providers which the county pays the match for equally and, in fact, gave many of those providers an increase before making the cuts imposed on all other Medicaid providers. The state Medicaid program has also reduced county input on policies at the system level. As a result, counties are seeing more and more waste, fraud, and abuse by Medicaid providers with these changes, but are unable to do anything about it. Michigan Counties pay a portion of the non-federal share of administrative costs and 10 percent of the cost of Medicaid mental health services delivered by county community mental health agencies. Counties with medical care facilities also provide a variable maintenance of effort payment for Medicaid patients in the facility. Minnesota According to the 2009 Minnesota Service Activity Funding Estimate, the total estimated amount of money Minnesota counties contribute to the state s Medicaid match in 2009 was $80.2 million. This includes matching funds to draw down federal Child Welfare Targeted Case Management (CW-TCM), Mental Health Targeted Case Management (MH-TCM), Vulnerable Adult/Developmental Disability Targeted Case Management (VA/DD TCM), and Rule 5 funding. Minnesota counties also pay a share of costs for client care provided in nursing facilities, Intermediate Care Facilities for the Mentally Retarded (ICFs/MR), Residential Treatment Centers (RTCs), etc. We re not clear whether this qualifies as a contribution toward the state s Medicaid match. Counties are required to pay 10% of the total Medicaid cost for the following: people under 65 who are in nursing homes more than 90 days; disabled people in ICFs (less than 7 beds); people in Institutions for Mental Diseases (IMDs). The Association of Minnesota Counties estimates the additional cost for these is about $15 million annually. Montana Counties pay 50 percent of the non-federal share of administrative costs related to eligibility determination. Nevada Counties must pay a portion of the non-federal share of administrative costs, long term care costs, and 100 percent of the non-federal share of long-term care for the aged, blind and disabled whose net monthly income exceeds set amount. Counties are also required to pay the total administrative costs for the federal match program. New Hampshire NH counties pay the non-federal share of Medicaid costs for long-term care recipients in nursing homes (both county and private homes) and those in the home and community based care waiver program up to a current cap of $105 mil- 6 County Contributions to Medicaid April 2010
lion/year. This is close to 85% of the non-federal share. This change from the previous 25% share happened beginning in state fiscal year 2008 at a time when the state took over some other costs (juvenile placement, etc.) which are less costly and not predicted to grow like our senior Medicaid population. New Jersey Counties pay a partial average of the operating costs for county nursing facilities. New Mexico Counties contribute about seven percent of the total non-federal share of Medicaid costs through the use of intergovernmental transfers. New York Under New York State Law counties are required to pay a set percentage of the non federal share for certain services. For most services and administration the share is 50 percent of the nonfederal portion, with lower percentages required for long term care. Under a new Medicaid cap agreement enacted in 2005 County Medicaid costs were capped at a hard dollar amount, using 2005 as the base year. North Carolina After years of intensive county lobbying, the N.C. General Assembly enacted a county Medicaid relief swap package in its 2007-08 budget to phase out the county share of Medicaid over three years, with the final components of the relief swap occurring in 2009-10. Prior to the Medicaid relief swap, the state required counties to pay 15 percent of the non-federal share, the last state requiring county financial participation in all Medicaid services. Counties ceded a 1/2 cent local sales tax to the state ($500 mil full year loss) in exchange for state assumption of county Medicaid expenditures ($561 mil in 2009-10). The Medicaid relief swap includes a state funded hold harmless provision that guarantees each county will benefit by at least $500,000 in Medicaid relief every year in perpetuity. Eligible counties receive 90 percent of the estimated hold harmless payment by March 15, with a truing up of the actual payment due by Aug. 15. In this and future years, the Medicaid hold harmless payment is based on actual performance actual Medicaid savings versus actual foregone sales taxes. Since counties are required to share most local sales taxes with cities, the relief swap package calls on counties to fund the city hold harmless payment, although this county revenue loss is also a part of the county s Medicaid hold harmless calculation. Counties received additional revenue authority as a part of the Medicaid relief swap - counties may choose to enact, upon successful referenda, either a 1/4 cent sales tax or a.4% land transfer tax on the selling price of real estate. These revenue streams are not shared with cities. Counties continue to bear the total non-federal portion for Medicaid administrative costs, estimated at $102 million for 2010-11. County employees, supported by county and federal funds alone, conduct all Medicaid eligibility determinations, redeterminations, and administrative case management services. North Carolina is a state supervised, county administered system of social services administration. North Dakota The best answer for if counties are required to contribute to Medicaid is yes, sort of. Until 1997, counties paid 15% of the non-federal share of all Medicaid expenses incurred in North Dakota (with the exception of Native American clients living on reservations). The 1997 Legislature passed a measure (supported by counties) that relieved the counties of 99% of all Medicaid expenditures. However, to make the change as budget neutral as possible for the State, the counties gave up (to the State) the federal reimbursement on their economic assistance administrative costs. Counties gave up in excess of $11 million in federal reimbursements to avoid in excess of $14 million in Medicaid match costs this past year. This swap, as it has been termed by the Legislature, obviously, has been a net benefit to counties over the last 12 years and the costs avoided continue to grow. In addition to the swapped costs above, counties were left with a small direct responsibility for 15% of the Medicaid costs associated with mental health services for children which totals less than $200,000 per year. National Association of Counties 7
In 2009, our Legislature provided all Medicaid providers significant cost-of-living increases to their reimbursement rates. They have also expanded some of the in-home and transitional Medicaid waiver services to the elderly and disabled to hopefully reduce overall costs on the more expensive nursing home end of the continuum. Due to the swap discussed above, counties do not share in the associated impacts to the match. Ohio Counties pay a maximum of 10 percent of the non-federal share of administrative costs, with some limitations. Oregon Counties pay a portion of cost for case management services. Pennsylvania Rules, match, trends, all differ among MH, MR, C&Y, behavioral health, long term care, transit.. Our codes require counties to contribute 10% to the cost of Medicaid recipients in nursing homes. Although IGT has that forward funded through 2011, counties must still cover IGT contractual work, which itself will change once the funding expires. South Carolina Counties are required to contribute a total of $15 million annually to Medicaid. South Dakota Counties pay $60 per month for each ICF/MR resident and $200 per month for each mentally ill resident in state inpatient facilities. Texas Urban hospital districts contribute funding to match federal disproportionate share funds. Utah Counties pay 20 percent of the non-federal share for mental health services. Wisconsin Counties pay the non-federal share for certain mental health programs (e.g., community support services and targeted case management) and some administrative costs. References (Endnotes) 1 National Association of State Budget Officers. 2008 Budget Expenditures Survey. www.nasbo.org/publications/stateexpenditurereport/tabid/79/default.aspx 2 National Association of Counties Community Services Division. Counties Role in Healthcare Delivery and Financing. July 2007. www.naco.org/template.cfm?section=technical_assistance&template=/contentmanagement/contentdisplay.cfm&contentid=24263 3 National Association of Counties Research Division. Survey of State Associations on Medicaid. July 2003. 4 Program Summary: Arizona Healthcare Cost Containment System County AHCCCS-Related Payments. www.azleg.gov/jlbc/psaxsctypay.pdf 8 County Contributions to Medicaid April 2010
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