RD316 - Monthly Report on Medicaid Expenditures for July and August 2006


Executive Summary:
Medicaid expenditures in July and August were 2.5 percent less than expenditures in tile same months last year. Factors contributing to this decrease include the reduction in pharmacy expenditures as a result of the implementation of Medicare Part D, billing delays associated with implementation of 'DMAS' new prior authorization contract, as well as tile fact that there were only four remittance processing cycles in July 2006 compared to five cycles in 2005. Although overall expenditures have decreased compared to last year, it should be noted that state fund expenditures have actually increased by 1.2 percent while federal fund expenditures decreased by 6.1 percent. The shift in expenditures is a result of the implementation of the Medicare Part D program, which decreases pharmacy expenditures reimbursed at the current 50/50 Medicaid match rate, and offsets those reductions with Medicare Part D premium "clawback" payments paid with 100 percent state funds.