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PA seeks to tighten Medicaid-related financial services

By   /   January 13, 2012  /   2 Comments

By Stacy Brown | PA Independent

HARRISBURG — If a Medicaid recipient needs help with tax preparation, the state Department of Public Welfare directs him to an organization that specializes in income taxes.

Or when a caregiver gets sick and can no longer provide services, the Medicaid recipient is directed to the organization that handles financing for caregivers.
The Department of Public Welfare, or DPW, has 37 such organizations that offer financial management services, but that number could be cut to as few as three as early as April

The financial management services, which are used by about 22,000 mostly disabled and elderly recipients, allow Medicaid enrollees to direct their benefits to a company, which manages their financial, payroll, tax withholding and bill paying.
The DPW says this cost-saving measure is needed, and the transition for Medicaid recipients will be seamless, but how much money will be saved and how the transition will occur are not known.
"In this time when the economy requires funding cuts on both state and federal levels, we need to be more efficient," said DPW secretary Gary Alexander, who added that the transition will help lower the overall price of services and ensure compliance with state and federal laws.
DPW spokeswoman Anne Bale said Thursday she did not know what the cost savings would be.
For Linda Anthony, a Medicaid recipient and director of Pennsylvania Coalition of Citizens With Disabilities, a nonprofit that advocates for the civil rights of adults and children with disabilities, the changes to the financial management services is only the beginning.

"To impose this, along with the mandate for those who are receiving food stamps to prove their assets, is only the beginning of the dismantling of the Department of Welfare," Anthony said.
Further, the consolidation means the state "is taking away these vendors and will probably go with a vendor from out of state which makes me angry as a taxpayer as well," said Anthony. 
Anthony said the requests for proposals for agencies wishing to snag a contract eliminates many local vendors, who are providing the services. Most local vendors have contracts with the state, and because this presents a conflict of interest, they are not permitted to apply, according to bidding guidelines.
Applications are due March 30.
"To ensure that participants will not see a lapse in service or interruption of care, DPW has mandated that applicants submit a transition and implementation plan," Alexander said.
Despite that mandate, some said the move will hurt the delivery of services.
The transition will "primarily impact people with disabilities in a waiver program who use the cash counseling model," said Kathy Cubit of Philadelphia-based Center for Advocacy For the Rights and Interests of the Elderly, whose mission is improving the quality of life for vulnerable older people.
The cash-counseling model provides Medicaid recipients with financial assistance and professional development guidance.
The transition has safeguards in place that will not affect benefits, services or access to care, said Alexander, who did not specify what those safeguards are.

According to DPW, about 1.9 million Pennsylvanians receive Medicaid, which is jointly funded by the federal and state governments.

The federal government reimburses the state for a portion of the cost of their Medicaid programs depending on the state's per capita income.

The Federal Medical Assistance Percentage in Pennsylvania in 2009 — the latest statistics available —was 63.1 percent, which means that of every $100 spent on services and populations covered by Medicaid, $63.10 is paid by the federal government and $36.90 is paid by the state.

DPW is seeking to get in line with most states that have one or a few entities, which provide financial management services to Medicaid recipients.