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One of the Committee’s overarching goals is to slow Medicaid spending growth per person while ensuring long-term support of effective policies. To do this, the Committee looks at spending across all funds, not just General Revenue Fund spending.
The Joint Medicaid Oversight Committee (JMOC) met on September 19, 2024, to discuss the projected Medicaid growth inflation rate for FY 26-27. The meeting focused on sustainable growth. Jada Brady, Executive Director, presented the goals and methodologies used to assess the growth inflation rate.
Measuring cost, legislative effects and health outcomes
Ohio Revised Code 103.414 mandates that the Committee contracts with an actuary to project the inflation rate for Medicaid each biennium. A report on the growth rate must then be sent to the General Assembly, the Governor, and the Director of the Ohio Department of Medicaid. JMOC and its actuary, Optumas, use a per member per month cost formula to analyze trends and costs across various population groups and service categories.
Director Brady described how the formula affords greater transparency as to where dollars are being spent, legislative effects, and health outcomes. The formula excludes any one-time funds and spending, such as operating expenses from the Ohio Department of Medicaid and its other seven agencies that help administer the program. Director Brady went on to describe that in contrast, caseload growth is largely driven by external factors such as demographics and the economy. Adding that, to some degree, policymakers can influence growth in per capita costs through the policies they set for reimbursement.
Realizing the promises of Medicaid reform
Ohio Revised Code 5162.70 reformed the Medicaid program. Amended House Bill 33, Ohio’s operating budget for fiscal years 2024 and 2025, amended this section of the code.It now requires Ohio’s Medicaid Director to limit Medicaid’s growth to an aggregate level across the entire program to the rate established by JMOC or the three-year average Consumer Price Index (CPI), whichever is lower.
The Medicaid Director is now required to improve the physical and mental health of Medicaid recipients.
There are also other reforms. The Medicaid Director is now required to improve the physical and mental health of Medicaid recipients, ensure that Medicaid recipients receive services in the most cost-effective and sustainable manner, remove barriers impeding a Medicaid recipient’s ability to transfer to low-cost and more appropriate Medicaid services, including home and community based services, reduce Medicaid payment rates that result in Medicaid services being provided in the most efficient and cost-effective manner possible, and implement fraud and abuse prevention and cost-avoidance mechanisms to the fullest extent possible.
In addition, the Medicaid reforms also called for reductions in the prevalence of co-admitted health conditions and mortality rates of Medicaid recipients and reductions in infant mortality rates among Medicaid recipients. The reform also provided for the implementation of evidence-based strategies that include measurable goals.
Next steps between JMOC and Optumus
Upon ODM’s submission to JMOC of the projections on October 1st, Optumas will review the numbers and resubmit the draft report to the Committee by Friday, October 4, 2024.
Several actuaries from Optumas, the consultants who have consulted with JMOC since 2014 to develop the growth rate setting, provided a brief overview of projections and supplemental summaries.
After presentations there was time for questioning and questions varied in a partisan manner. Republican members of the committee asked questions on how to reduce the costs further. There were also questions about paying for refugees and illegal immigrants. Director Brady confirmed that refugees are covered 100 percent through federal funds.
Representative Liston asked questions about how to focus on value based care and the benefits of providing weight loss medications and sickle cell treatments that offer cost-savings along the lifespan.
We will continue to follow the growth rate setting process post this first JMOC meeting and provide updates as they become available.
