PROVIDENCE – The Public Radio’s Ian Donnis, in his weekly TGIF politics roundup for April 25, included a short item about the budget uncertainty in 2025 regarding how potential cuts in the federal Medicaid funding will impact the state’s budget. “That’s because even a small cut to Medicaid,” Donnis wrote, “could blow a big hole in the state budget.”

True dat, as residents of New Orleans have been known to say. But how big a hole?

The impertinent question to ask is this: Where does the money in the Rhode Island state budget go when it goes to Medicaid? Approximately one-third of Rhode Island residents – roughly 330,000 folks – depend upon Medicaid for their health insurance coverage.

Further, about 90 percent of those on Medicaid receive their health benefits through what is known as Managed Care Organizations, or MCOs, private health insurers who contract with the state. Currently, they include Neighborhood Health Plan of Rhode Island, UnitedHealthcare of New England, and Tufts Health Plan, although the state has plans to award the future contract to just two private health insurers, pending the outcome of lawsuits.

But exactly what is the money actually spent on? What procedures, and what drugs, and what services?

Under the leadership of Cory King, the R.I. Health Insurance Commissioner, the Office of the Health Insurance Commissioner has been busily crunching the numbers, most recently, doing a comprehensive analysis of the rates for social and human services for the fee-for-service Medicaid recipients.

The most recent reports, submitted on March 31 to the General Assembly, are part of OHIC’s 2025 review of publicly funded reimbursement rates for “social and human services programs.”

As defined by law, social and human service programs include: social, mental health, developmental disability, child welfare, juvenile justice, prevention services, rehabilitative, substance use disorder treatment, residential care, adult/adolescent day services, vocational, employment and training, and aging.

Together, these services comprised approximately 50 percent of the Medicaid program fee-for-services expenditures in FY2024, according to OHIC.

It may seem like a bit of arcane number crunching, but given the threat of cuts in federal funding to Medicaid, understanding what investments are needed to sustain the current level of services – and what additional investments should be considered – provide the basic data that legislators will need to keep Medicaid functioning.

Here is the latest in a series of interviews by ConvergenceRI with Cory King, the OHIC Commissioner, talking about the most recent data analyses.

ConvergenceRI: At a time when the future of Medicaid funding from the federal government appears to be in jeopardy, how does the recent OHIC study clarify the need for additional investment in rates for social and human services?    
KING: OHIC’s rate review work does not consider broader state or federal fiscal issues. Our mandate is to review the rates and make a recommendation based on the data. It is true that uncertainty about the future of federal Medicaid funding casts a long shadow over all the policy and funding discussions concerning Medicaid and all of health care, but OHIC’s work is very focused.

ConvergenceRI: What is the relationship between rates for fee-for-services Medicaid delivery and the rates for private health insurers under the Managed Care Organization plans?    
KING: For services that are within the scope of the OHIC rate review and part of Manage Care, the Medicaid FFS rate is now the floor for MCO reimbursement. As a product of the 2023 rate review, EOHHS created a minimum fee schedule for Managed Care. MCOs that reimbursed below the rate included on the minimum fee schedule had to increase their rates to match. You can find this fee schedule, along with other information, on the EOHHS website here: https://eohhs.ri.gov/FY25-Medicaid-Rates

ConvergenceRI: Has there been any specific analysis into the rates that Optum, a for-profit division of UnitedHeslthcare, charges, for behavioral health management services under two of the three MCO plans?    
KING: The rate review is exclusively focused on provider reimbursement. We do not assess MCO administrative costs or analyze the terms of contracts between the MCOs and their delegates.

ConvergenceRI: What actions would you like to see the General Assembly take during its 2025 session?    
KING: Primary care rate review. I am eager to do this work. As you know, OHIC has been focused on primary care in Rhode Island and my office adopted new regulations in March governing commercial insurer funding for primary care. Correcting the funding issues facing primary care will require a concerted effort across all payers, and Medicaid is a major payer.

ConvergenceRI: Why should legislators, health care providers, and Rhode Island residents pay attention to the latest data analysis done by OHIC and how it may impact their future?    
KING: The OHIC rate review lays out the facts concerning reimbursement for social and human service programs. Our work is data driven and transparent. For such an important component of our economy, which serves thousands of Rhode Islanders, having a consistent, rational process to propose changes to reimbursement rates is a matter of public interest.

ConvergenceRI: What is the key messaging that you would like to communicate about OHIC’s ongoing work?    
KING: We are focused on getting the work done, following the data, and engaging directly with providers. I have found that provider engagement is key. Providers may not always like the outcome of our analysis, but when we are transparent about the factors that determine their reimbursement rates, reference data they provide to our team for analysis, and give them an opportunity to propose and defend alternative assumptions, it helps settle a lot of the questions and concerns before the recommendations start making their way through the appropriations process.

ConvergenceRI: What questions haven’t I asked, should I have asked, that you would like to talk about?    
KING: We still have a lot of work to do between now and the September 1 deadline for recommendations. We are convening provider focus groups to advise on the analysis and rate builds, while also updating independent rate models from the 2023 cycle. We will be busy over the next few months.