CHC OK’d to use $5M seed money as matching fund for Medicaid

The federal Center for Medicare and Medicaid Services has allowed the Commonwealth Healthcare Corp. to use its $5 million seed money as local matching fund to increase the CNMI’s reimbursements in the Medicaid program.

At the same time, CMS is now reviewing a proposal by the corporation to tap the $7 million from the Marianas Public Land Trust for the same purpose-as local matching fund for Medicaid, according to corporation CEO Juan N. Babauta.

Medicare approved the use of the seed money as matching fund for the Medicaid program after it acknowledged that the $5 million budget for the corporation is a “certified public expenditure” that went through the legislative process and was enacted into law.

The same case applies with the $7 million approved by the Legislature to be loaned out by MPLT for the hospital’s use.

Medicaid is a federal-state program designed for low-income individuals and families. The CNMI shares 45 percent of its operational funding while 55 percent is funded by federal monies. The program is administered under the Executive Branch in collaboration with the public hospital.

Babauta described the current Medicaid program as having “too many people” but “too little money.”

Many providers of the program, including the Commonwealth Health Center, are suffering from either delays or non-payment of reimbursements due to the lack of funds. Among private providers alone, unpaid reimbursements now total over $15 million.

This fiscal year, Medicaid was budgeted for $2.4 million. The Legislature wants to give the program a far lesser amount of $1.4 million next fiscal year, based on the budget bill now pending at the Senate.

For the CNMI to draw down more reimbursement from the federal side, it has to come up with its local share. This fiscal year, the CNMI-with only $2.4 million in matching fund-was only able to drawdown $3.6 million from the federal side, resulting in an overall budget of $6 million to date.

Babauta said that in order for the Medicaid program to drawdown up to $32 million, the CNMI has to come up with a matching fund of $14 million and from federal side, $18 million.

Adding the corporation’s $5 million seed money and the $7 million from MPLT to the proposed appropriation of $1.4 million will boost the total local matching fund to $13.4 million.

19K client base

Babauta said yesterday that the corporation expects a spike in Medicaid clients, especially when the Affordable Care Act, which will apply the 133 percent national poverty level, kicks in in 2014.

He revealed that there are about 19,000 people certified for Medicaid in the CNMI. This represents about 30 percent of the Commonwealth’s estimated population of 50,000. He forecasts the client base to grow in 2014 to about 35,000 to 40,000-more than half of the population.

This is because when the national poverty level of 133 percent applies, individuals who are earning less than $15,690 per annum will become eligible for Medicaid.

Babauta disclosed that the CNMI situation will worsen when the matching ratio goes back to 50 percent starting in 2019.

If successful in increasing Medicaid funding, Babauta said these “dollars” will be used twice-both in payment to providers and for other expenses at the hospital. Babauta said the $5 million seed capital and the $7 million MPLT money were used “symbolically” for the purpose of increasing the federal reimbursements to the CNMI.