Shortfall looms for NMI Medicaid

The CNMI Medicaid agency is expected to experience a financial shortfall estimated at $4.8 million and it is just a matter of when this will occur, according to acting Commonwealth Medicaid Agency director Vicenta Borja.

In a letter to Gov. Arnold I. Palacios and Lt. Gov. David M. Apatang Tuesday last week, Borja said immediate action is needed in order for the agency to comply with federal rules and regulations.

She said if CNMI wishes to stop or limit services for otherwise eligible for federal financial participation at any point, a State Plan Amendment is required that must specify what services will be affected and provide advance notices to the beneficiaries.

In the event the CNMI government will fully fund the agency at 100% local funding, compliance with the State Plan is optional, Borja said.

She urged Palacios and Apatang to pay immediate attention to this matter, considering that many individuals and families rely solely on Medicaid for their healthcare needs.

She added that Medicaid providers on and off-island will be significantly impacted by this matter and relationship with off-island providers will be jeopardized.

Borja said this will affect the future of much needed off-island medical treatment.

In an April 4, 2023, letter to Palacios, Borja projected a $4.8-million financial shortfall for the Medicaid program. She mentioned in that letter that the amount may change due to the interim monthly payments made to the Commonwealth Healthcare Corp. using the Certified Public Expenditure methodology.

In her letter last week, Borja said CHCC’s interim monthly payments are currently calculated using fiscal year 2020. However, she said, CHCC has officially submitted their most recent as-filed Medicare cost report reflecting fiscal year 2022, which will be used to recalculate the interim payments.

The acting director said it is at the CNMI’s discretion when and how to apply the revised interim payments if a revision is done in the middle of the fiscal year.

Borja said that, as of May 1, 2023, the remaining amount of the CNMI’s federal Medicaid funds is $19.32 million.

Borja said she analyzed the figures and applied them to three scenarios. In option 1, the CNMI government makes retroactive payment in the amount of $3.0 million covering October 2022 to April 2023, then reserves payments in the amount of $11.5 million for the period from May to September 2023. The remaining funds would be exhausted immediately, resulting in a $20.7 million total Medicaid financial shortfall.

In option 2, the CNMI government will not make a retroactive payment, and will apply new rates totaling $11.5 million from May through September 2023. The estimated remaining federal Medicaid funds is $7.7 million, but this will be fully exhausted in June 2023. The total Medicaid financial shortfall under this scenario is $11.7 million.

In option 3, the CNMI government will make no retroactive payment and will reserve payments in the amount of $8.2 million for the period of May to September 2023. An estimated $11.0 million in Medicaid funds is left, which will be exhausted in July 2023, but no later than August 2023. The total Medicaid financial shortfall is $8.4 million.