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Features Health & Wellness Health department forced to raise fees in response to Medicaid reforms

Citizens seeking certain services at the Macon County Public Health Department may have to pay a little extra for their next visit, as local health department officials recently increased some fees in response to state changes to Medicaid reimbursements and the annual Medicaid Cost Settlement. Local health departments across the state are acting in unison, as state legislators changed the method used to calculate and disburse Medicaid Cost Settlement dollars.

“Most of the fee changes were mandated by the state, so we had little say,” said County Commissioner Ronnie Beale. “We hate to see fees go up, but unfortunately we had to make the changes. It’s a consequence of the recession and state policy actions.”

Macon County’s Public Health Director Jim Bruckner requested that the Board of Commissioners approve the fee changes last Thursday, Sept. 15. Subsequently, the board moved forward quickly and approved the changes, as county officials hope to stay ahead of the curve and alleviate the impact the new calculation method will have on the department’s Medicaid Cost Settlement amount for the next fiscal year.

“The NC Division of Medical Assistance (DMA) is trying to control overall Medicaid costs. One strategy for controlling these costs is to change the way they provide Medicaid cost settlement to local health departments,” said Bruckner.

The North Carolina State Department of Health and Human Services notified local health departments in late July about the pending changes that would impact local health department fees. In early August, DMA formally informed local health departments about their decision to change how they calculate Medicaid Cost Settlement dollars.

“In the past, DMA established its Medicaid Cost Settlement based on a statewide average of fees charged by local health departments. DMA now establishes its rate by looking at the average for each individual health department, rather than a statewide average derived from all health departments. In the past, health departments with higher fees raised the overall statewide average, while health departments with lower fees contributed to lowering the statewide average,” said Bruckner.

Macon County’s Public Health Department’s Medicaid Cost Settlement for fiscal year 2009/2010 was $145,000. For fiscal year 2010/2011, the amount increased to $250,000. Health department officials are predicting a decrease for this fiscal year, projecting the total to be about $144,000.

“We are adjusting our fees to be more inline with the current statewide average,” said Bruckner. “The fees are based on our actual direct and indirect cost. This adjustment was necessary because we may no longer rely on the statewide average reimbursement to cover our actual direct and indirect costs,” continued Bruckner. “Direct costs are expenses that can be easily related to the provision of a specific service. For example, physician and support staff salaries and benefits, medical supplies, lab tests, and other resources consumed at the time of the service,” he said.

“Indirect costs involve resources that are not directly consumed during the provision of a service, but without them the provision of that service would not be possible. For example, administrative staff salaries and benefits, training costs, facility costs, insurance premiums, office equipment and supplies, and recruiting and marketing expenses,” said Bruckner.

Some of the fee increases were determined by actual Medicaid rates and service costs, while other fees not associated with Medicaid rates were configured through cost analysis procedures.

“Costs for services received through Macon County Public Health are based on the current Medicaid rate and then adjusted according to the actual cost of the service. If there is no Medicaid rate then fees are determined through cost analysis. Cost analysis takes into account all of the resources associated with providing a particular service and calculates the actual cost to provide that service. Cost analysis includes the calculation of direct and indirect costs for services and then adding these figures together to determine the actual cost of the service,” said Bruckner.

The fee increases will not adversely affect Medicaid recipients in Macon County, but self-pay patients will be impacted to a certain degree.

“They will impact self-pay patients,” said Bruckner. “The fee increases will result in the MCPH reevaluating our sliding fee scale between now and the end of the calendar year,” he said.

“The sliding fee scale is applied to individuals in families with annual gross incomes exceeding specified levels of a scale based on current Federal Poverty Income Guidelines,” he said.


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