03/23/07 — Counties will pay Medicaid coverage

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Counties will pay Medicaid coverage

By Andrew Bell
Published in News on March 23, 2007 1:52 PM

Counties across the state might be forced to look within their own budgets by the end of the fiscal year to cover increasing Medicaid costs, state officials said this week.

Counties are expected to spend at least $5 million more than the one-time $27.5 million Medicaid cap granted by state legislators last year, according to the North Carolina Association of County Commissioners.

Wayne County officials say they expect to overspend the county's Medicaid budget by about $1.2 million this year.

According to data collected by the association, Wayne won't be alone. The state's 100 counties spent about $24 million more for Medicaid costs through February of this year than they had through the same period last year.

North Carolina is the only state that requires its counties to participate in paying for all Medicaid services.

During a work session last week, Wayne Social Services Director Judy Pelt told county commissioners that the nearly $7 million budgeted for Medicaid costs in Wayne this fiscal year likely will fall $1.2 million short by the end of the fiscal year on June 30.

In her conversations with other social services directors across the state, Mrs. Pelt told the commissioners that several other counties also expect to overspend their budgets.

State legislators had prepared for that overspending when the General Assembly approved the $27.5 million Medicaid cap. As soon as counties overspend their Medicaid budgets, they can request additional funds -- but the money is available on a first-come, first-serve basis.

County Manager Lee Smith said last week that he fears several counties will be competing for the state money at the same time. Wayne's Medicaid costs are projected to be about $751,000 for March, leaving the county with $324,000 for May and June.

If that projection holds true, Smith said, spending would have to come "to a screeching halt." Smith has met with county Finance Director Pam Holt to consider where the county might find more money, but he added that he hopes there will be enough money left at the state level.

The commissioners approved a resolution last week asking the state to reformulate its current Medicaid cap so that counties that run out of money during the fiscal year will have guaranteed funds available. The new formula would take a county's Medicaid population, current spending and projected spending into account.

Other Medicaid relief legislation being considered in Raleigh includes House Bill 57, which has the intent of phasing out counties' share of Medicaid costs over the next five years. Another measure, House Bill 560, proposes to phase down county Medicaid costs by 3 percent each year for the next five years.

Legislative sponsors chose this formula because counties are required by the state to pay 15 percent of the non-federal share of all Medicaid service costs. Although federal law doesn't mandate that counties participate with Medicaid costs, some of those costs have been passed down from the General Assembly.