Fitial EO transfers Medicaid under Office of Governor

Gov. Benigno R. Fitial signed yesterday an executive order placing the Medicaid Office under the Office of the Governor, formalizing what his administration has been saying all along.

The governor ordered that the Commonwealth Healthcare Corp. shall relinquish responsibility for the administration and operation of the Medicaid Office.

This plan takes effect 60 days after submission to the Legislature, unless specifically modified or disapproved by a majority of the members of each house of the Legislature.

The Medicaid program has 18,000 beneficiaries in the CNMI.

Medicaid is a federal/state program administered by the states and in the case of the CNMI, funded 55 percent by the federal government and matched 45 percent by the local government. This means the CNMI is required to match funding 45 cents to the dollar.

Fitial, in his two-page order, said CHC is currently in a frail financial state and the matching requirement is an extreme fiscal burden.

“The Office of the Governor is in a better position to efficiently raise and allocate the necessary funds to meet the matching requirement,” he said in his EO 2011-06.

Fitial cited his constitutional authority in making changes in the allocation of offices, agencies and instrumentalities and in their functions and duties that are necessary for efficient administration.

The governor said that having the Medicaid Office under CHC creates a potential conflict of interest.

The Medicaid Office is the designated payer of Medicaid funds and as such it has a duty to make payments to all eligible payees. CHC is an eligible payee of Medicaid funds, the governor said.

“Having the Medicaid Office subordinate to CHC risks favoritism in payments to CHC over other eligible payees. Such a circumstance should not be risked or countenanced as it is unfair to other medical providers, risks Medicaid funding and opens up the government to potential sanction,” he said.

CHC chief executive officer earlier said the CNMI will explore a federal law where the Commonwealth may qualify for critical access, thus removing the federal cap or matching requirements.

He also urged the Legislature to conduct a thorough oversight on the Medicaid program because it continues to certify eligible recipients even without enough funds. This results in a big shortfall for the corporation and the government. Babauta met yesterday with lawmakers to present the corporation’s budget.