Executive Branch takes over Medicaid, medical referral

After years of administering the Medicaid and medical referral programs, the Public Health Department has let go of both programs with the formal implementation of the Commonwealth Health Corp. beginning this fiscal year.

Public Health Secretary Joseph Kevin Villagomez told Saipan Tribune Friday that the Executive Branch has now full jurisdiction over the federally funded Medicaid program and medical referrals outside the CNMI.

However, medical referrals within the three main islands of Saipan, Tinian, and Rota will remain under the corporation’s responsibility, he said.

With the turnover, the Office of the Governor will now officially administer the operation of Medicaid, which receives federal funding through an approved 45-55 fund matching requirements.

“What this means is the corporation will now become a vendor of the Medicaid program, like other private clinics. The corporation will be billing the Governor’s Office for the Medicaid services we provide,” he said.

Under the previous practice when Medicaid was under DPH, there was no “sense of urgency” in paying the hospital for the services it provided as it was the Legislature that appropriated the amount, Villagomez said.

“Now that we’re an autonomous agency and we need the money to come to us to continue the service, we’re hoping that we are the payee of first resort,” he said.

Villagomez said the CNMI receives about $5 million to $6 million from Medicaid each year. However, because there is a cap on the federal amount for the program, any excess amount has to be shouldered by the central government, he said.

“Typically, the cap is $5 million to $6 million per year. If the local government puts in $3 million, the federal government has to put in $4 million and once the cap is reached, anything beyond the amount is responsibility of the central government. So if the total expenditure is $8 million, the central government has to shoulder the other $2 million,” he explained.

Medicaid is a state administered program and each state sets its own guidelines regarding eligibility and services. It is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state laws. Medicaid does not pay money to eligible clients. Instead, it sends payments directly to their health care providers. Depending on each state’s rules, patients may also be asked to pay a small part of the cost for some medical services.

Villagomez said the Executive Branch will now also be responsible for managing the off-island medical referral trips of patients.

DPH earlier revealed that it spent $16.3 million in referring medical cases to various medical facilities outside the Commonwealth in the last four fiscal years, ending in 2009. Fiscal year 2009 had the highest expenditure of $7.4 million for 907 patients. This is an over 50 percent increase from 2008’s expenses of $4.4 million for 716 cases.

In 2007, CHC noted 565 medical referral cases and spent $1.5 million compared to $2.8 million spent in 2006 for 526 cases.

The government has provided the corporation $5 million as seed money. Villagomez said the money may or may not be used right away, depending on the needs of the corporation.

“The $5 million is pretty much open. We have to prioritize how best we can use that amount. But our goal is to generate revenue and if it comes in, we may not touch the $5 million and save it for rainy days,” he said.

Villagomez said the corporation is expected to provide autonomy and management flexibility to the Department of Public Health and will also improve management efficiency by allowing managers to better focus on hospital operations.