Steadily improving economy reduces Medicaid caseload
Ohio Medicaid updated its budget forecast in May and determined enrollment will be less than originally projected as a result of Ohio’s steadily improving economy. The reduced caseload will translate into budget savings of $354 million ($54 million state share) in 2018 and $466 million ($122 million state share) in 2019. While significant, these amounts are within 2.6 percent of the original budget in 2018 and 3.2 percent in 2019. During the budget process, Ohio Medicaid made it clear that program savings, if any, would be used to mitigate the impact of the budget cuts described below.
Hospitals avoid budget cuts

The fiscal year 2018-2019 operating budget reduced the Medicaid appropriation for hospitals $1.1 billion over two years. Ohio Medicaid immediately implemented a plan to keep spending within reduced appropriation levels with the least amount of negative impact on hospitals and patients as possible. Based on the updated budget forecast, Ohio Medicaid adjusted its hospital spending plan to further reduce the impact of budget reductions. As a result, hospitals will absorb $185 million in Medicaid reimbursement cuts over two years but otherwise avoid an additional $956 million in cuts originally enacted in the budget.

Medicaid cancels June provider payment delay

Ohio Medicaid’s original plan to keep spending within the budget’s final appropriation level included a one-week payment delay for all providers in June 2018. A one-week payment delay results in one-time Medicaid savings and, because Medicaid pays most claims within ten days, stays well within the 30-day industry standard for prompt payment. However, based on the reforecast, Medicaid has determined that savings are sufficient for the budget to balance without needing the June payment delay. This is particularly important for behavioral health providers to maintain cash flow stability as they transition to managed care in July 2018.