RD104 - Monthly Expenditure Report of the Medicaid Program - February 2007


Executive Summary:
Medicaid expenditures through February are currently 6.0 percent above expenditures through the same period last year. Current funding, based on the November 2005 Official Medicaid forecast and budget amendments enacted during the 2006 General Assembly session, provides for 8,8 percent annual growth. The updated Official Medicaid forecast and budget amendments included in Governor Kaine's Introduced Budget, projects 8.9 percent annual growth for FY 2007.

At the fund level, Medicaid general fund expenditures are currently running at 9.1 percent annual growth rate. DMAS' current appropriation provides for 12.0 percent annual general fund growth; the Governor's Introduced Budget provides for 11.6 percent annual general fund growth.

General Medicaid (Acute Care) Services

Expenditures for acute care services are currently running 3.4% more than expenditures at this time last year. Factor s contribution to the slow growth include larger than projected decreases in pharmacy expenditures associated with the new Medicare Part D program. Dental services, on the other hand, have increased at a higher rate than projected.

Long-Term Care Services

Expenditures for long-term-n care services are currently 9.8% above expenditures at this time last year. The higher nursing facility expenditures primarily reflect the annual rate adjustment, as opposed to increases in utilization. The additional 335 MR waiver slots and 65 DD waiver slots funded in the 2006 Appropriation Act and added effective July 1, 2006 are contributing significantly to the growth in home and community-based waiver services.

Mental Health Services

The significant increases and decreases in the subcategories reflect the changes in the classification structure of mental health services which was not fully implemented until September of last year. Overall, expenditures for mental health services are currently 16.4% above expenditures at this time last year.

Medicaid Recoveries

Normal prior-year recoveries, including revenues generated from revenue maximization efforts, are 54.9 percent higher than recoveries at this time last year, significantly above the funding in the current Appropriation Act which assumed a 38.9 percent increase in prior-year recoveries or the projections and budget amendments reflected in the Governor's Introduced Budget which revise that assumption to 28.2 percent. The transactions for prior-year pharmacy rebates have not occurred yet.