A recent report by the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO) found that state spending on Medicaid grew an estimated 20% in FY12 and federal spending declined an average of 8%, as the enhanced Medicaid match rate in the American Recovery and Reinvestment Act expired.
In FY12, state Medicaid budgets grew an estimated 50 percent or higher in a few states – including Mississippi, Oklahoma and West Virginia. At 18.7%, the growth in state spending on Medicaid in Virginia in FY12 largely mirrored the national average.
The report found that states utilized a range of cost containment measures in FY12, such as enhanced program integrity efforts (31 states), reduced provider payments (30 states) and efforts to cut costs for prescription drugs (22 states).
NGA and NASBO analyzed governors’ proposed budgets for FY13 as well, and found that state Medicaid spending would increase an average of 3.9% in FY13, while federal spending would increase 3.4%.
According to the report, states are beginning to shift their cost containment strategies to embrace expanded managed care and augmented program integrity efforts in FY13.
McGuireWoods Consulting advises clients on Medicaid and other healthcare related matters at the federal level and in Virginia, North Carolina, South Carolina, Georgia, Illinois and Texas.
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