The federal government has refused to reimburse the state for its expanded Medicaid coverage this year and despite efforts to come to an agreement, the deferrals may continue into September.
The feds have been holding out on the state over a technical dispute regarding eligibility. Because of the disagreement, the state was not reimbursed for $249.2 million for the first quarter. The second quarter deadline is approaching next month, but Budget Secretary Ben Barnes said it’s not clear whether that payment is coming.
“If this is not worked out we’re going to have to substantially pay,” Barnes said Friday.
At the very least, Barnes said he believes Connecticut should be receiving 50 percent reimbursement until they can negotiate for the rest to cover the cost of the care already delivered for this population of low-income adults.
“This could put Connecticut into another cash crunch,” Republican state Rep. Vincent Candelora of North Branford said Friday.
Candelora said he hopes this issue is resolved quickly because if it isn’t, then the state is going to have to take $249.2 million “that we can’t afford to be without” out of the state’s checkbook.
A spokesman for the Social Services Department said Friday that they were working on getting the federal government the additional information it requested when it received a deferral notice in July for $249.2 million.
“It was not until then that funding was deferred,” David Dearborn, a spokesman for the state agency, said.
According to state officials, the federal government agreed in March to reimburse Connecticut at the 100 percent level for services provided to the newly eligible Medicaid expansion group. This new group, which includes low-income adults making up to 138 percent of the federal poverty level, was created under the Affordable Care Act. In 2010, Connecticut was one of the state’s to embrace Medicaid expansion.
The preliminary March agreement between the federal government and Connecticut covered payments to the state for January through March. State officials said Friday that the $249 million payment for the first quarter was expected to be made prior to the approval of an amendment to the requirements for reimbursement eligibility.
Then, as the state was actively working on getting the feds’ questions answered, it received notice that the payment would be deferred.
Earlier this week, Barnes, hinted that there was an issue with the funding in his monthly letter to state Comptroller Kevin Lembo.
Barnes told Lembo that his office is “closely monitoring federal review of Medicaid reimbursements for a variety of programs and services.”
Barnes said his office, along with the department of Social Services, is “actively engaged with the federal government in addressing issues relating to claiming methodologies and allowable costs.”
In a telephone interview Wednesday, Barnes said the situation regarding Medicaid expansion is “less than ideal,” but he believes they will find a resolution at the latest by the end of December.
After learning about the federal government’s decision to defer payment, Connecticut submitted additional information regarding the situation to the Centers for Medicaid and Medicare Services on Aug. 19. CMS has 90 days to review that information and reply.
Once the state plan amendment is approved, the federal funding for the increased reimbursement rates likely will be made available to Connecticut, state officials said Friday.
Meanwhile, the state has received closed to $1 billion in funding from the federal government for the first quarter of the year to reimburse other costs under Medicaid.