The Associated Press October 28, 2010, 7:59AM ET

Idaho to cut $8 million in Medicaid services

The Idaho Department of Health and Welfare is poised to make more than $8 million in cuts to Medicaid programs and services for low-income adults with severe mental illness and children with autism and other developmental disabilities.

The agency has drafted a new set of rules that authorize cuts in services or elimination of some programs designed to trim about $1.6 million from its current fiscal year budget. Those cuts, however, would also trigger the loss of another $6.5 million in federal Medicaid matching funds used to reimburse care providers.

The agency has been under pressure all year to find ways to cut more than $57 million from its Medicaid budget in fiscal 2011 to offset the financial pounding to the state general fund amid the economic downturn. The agency has only cut $36.2 million and will ask lawmakers in January for an additional $41.5 million to plug holes in the Medicaid budget.

"I know nobody wants to see a further reduction in services," said Leslie Clement, the department's Medicaid administrator. "But we have to move forward. I think we've been pretty careful about the changes we're making."

The temporary rules, obtained by The Associated Press through a public records request, are scheduled to be published Dec. 2 and go into effect in January.

News of the cuts have angered advocacy groups and organizations that provide services for hundreds of mentally ill and developmentally disabled clients who will be affected by the rules.

Critics say the cuts unfairly target a vulnerable population that can ill afford rollbacks in community-based services and preventative care and have no money to pay for them on their own.

Providers who stand to lose even more billable revenue say the changes could prompt layoffs or push organizations already reeling from state cuts to the brink of closure.

"This latest round of cuts is just hitting deeper to a population that can't afford it," said Jim Baugh, executive director of Disability Rights Idaho. "What I think these particular cuts are going to do is pretty serious.

The cuts are spelled out in two separate, temporary rules, both set to expire at the end of the fiscal year on June 30 unless made permanent by the Legislature.

Changes identified by the department cover a range of services, from support in managing medication for mentally ill clients, teaching life skills and appropriate behaviors for those trying to live independent or more self sufficient to group therapy for adults with the most severe and persistent mental illnesses.

Clement says the agency made decisions based on input from providers and advocates and the agency's own review aimed at eliminating duplication of services and preserved programs that could show clear, positive results.

"It's a fairly common concern that certain Medicaid benefits ... don't seem to lead to any positive outcome," Clement said. "In the end I think we've preserved our full array of benefits to our population."

Idaho is not alone in looking to Medicaid cuts as a way to cut government spending in the recession, even as enrollment in Medicaid programs has ballooned amid rising unemployment.

A report issued by the Kaiser Family Foundation in September found that 48 states took some action to limit spending in Medicaid, the state-federal partnership started in 1965 to help low-income families and elderly.

Thirty-nine states cut or froze payments to hospitals, doctors and other service providers, and most, including Idaho, face the likelihood of more cuts in fiscal 2012, according to the report.

Advocates and providers acknowledge the state must make difficult choices to balance budgets. But they contend the new round of cuts will lead to devastating problems for affected clients and more expensive, long-term social costs.

They point to a recent case in Pocatello, where a man was shot at random and severely wounded by another man police say was recently dropped from a state mental health program. Police say the shooter suffers from mental illness and had been recently dropped from programs eliminated in a round of state cuts designed to save $9 million.

"These kinds of changes aren't going to save us any money in the long run," said Kelly Keele, a board member for Human Supports of Idaho. "These people are going to get worse without those services and then we're going to bear the brunt of that in our justice system and corrections."


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