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Health care in the governor’s budget

January 31, 2012

The budget always features Rhode Island art on the cover. This year, it's a photograph by Mark Davis of Pawtucket.

Budget season is always crazy.  A bunch of reporters cram into a room and flip through pages and pages of charts and numbers as a representative from the administration tries to explain what they all mean.

When the embargoed presentation is over, we rush around to interview government officials about what this or that change means. I always feel like I’m asking questions about War and Peace after reading one page of the cliff notes. It’s hard to avoiding feeling like you’re missing something or asking the wrong questions.

Well, this year my colleague Ian Donnis attended the budget briefing. He brought back a copy of the power point outlining the major proposals in the budget. I took a look with an eye towards changes related to health care. Here are the highlights-

Rhode Island Department of Health

DOH isn’t getting too pummeled in this year’s budget. Governor Chafee proposes cuts totaling $700,000. He says this money will come from eliminating 8 full time positions in DOH’s lab. With these cuts, DOH will re-examine its priorities- what samples are more important to analyze than others?

In the good news category, especially for anyone who enjoys Rhode Island restaurants, Chafee proposes hiring 12 additional food inspectors– six in fiscal year 2013 and six more in FY 2014. Those new hires would cost $230,000 in the coming budget year.

DOH won’t get any of this money directly, but a four cent increase in the cigarette tax– from $3.46 a pack to $3.50 a pack- will help the department’s efforts around smoking cessation. Any time cigarettes get more expensive, folks are more likely to quit.


I’ve seen these proposals before. Chafee wants to charge a $2 dollar co-pay for elderly residents that get transportation to and from adult day care sites. The budget estimates these charges would save the state $150,000.

The budget also assumes a decrease in demand for Rhode Island’s Pharmaceutical Assistance to the Elderly (RIPAE) program. This fund helps seniors on Medicare buy their prescriptions once they reach the “donut hole” where government assistance falls away. The affordable care act is already shrinking this donut hole and the gap will eventually disappear completely, so RI won’t need RIPAE anymore. Estimated savings in FY 2013- $200,000.

The budget also assumes a savings of $355,000 by delaying an increase in staffing at the Veterans’ Home.


This is where Chafee cuts a big chunk out of the budget. But how the reduction works is a little wonky. Bear with me on this.

Currently, Rhode Island pays United Health Care and Neighborhood Health Plan a certain amount of money per patient per month for people on Medicaid. Those companies then use that money to pay patient’s health care costs. Chafee’s budget would reduce that per patient per month payment by 4.14%.

To pick a random number, let’s say Neighborhood got $25 per patient per month to pay for their  health care costs. Under the proposed budget, that amount would shrink to $23.97. Doesn’t sound like a huge reduction, but Chafee’s staff estimate the change would save $14 million dollars next year.

How would this change affect Medicaid recipients? It’s hard to say for sure. The budget includes some initiatives that will hopefully help Neighborhood and United reduce their costs so these rate decreases don’t really affect patients. These cost saving tools include-

  • Encouraging patients to get the care they need at community health centers and doctors instead of expensive hospital clinics.
  • Reducing the number of emergency room visits.
  • Rethinking how companies pay for services and work with providers.

You could put it this way- the rate reduction is sort of a big stick to get the companies managing Medicaid  to be more innovative and efficient.  Neighborhood Health Plan tells me it always works well with the Department of Human Services (DHS). Folks at NHP expect that the administration will offer lots of assistance to make the rate cut manageable.

There are some other wonky cuts, but here’s one that should get a lot of attention- DHS wants to eliminate dental services for adults on Medicaid. The cut would save $2.6 million dollars. But don’t count on it passing. This isn’t a new proposal. Last time I covered the proposed cut, community health centers successfully lobbied to put the money back in.

These are the major cuts, but not all of them. I only have a hard copy of the power-point explaining the budget, but I’ll link to a digital version when it’s available. Let me know if there’s an important change I missed.

2 Comments leave one →
  1. February 1, 2012 11:32 am

    I missed the part about the 4% from the Compassion Centers ? Talk about WONKY !


  1. AS Daily News Roundup: Thursday, February 2, 2012 | Advocacy Solutions

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