Colorado Governor Says Medicaid Expansion Will Bring Savings

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Colorado Gov. John Hickenlooper announced this week that the state would save more than $280 million in Medicaid spending over the next decade even with the expansion of coverage called for in the federal Affordable Care Act. Here are the details.

* According to Susan E. Birch, the executive director of the Department of Health Care Policy and Financing, the focus has been on transforming the health system to ensure all Medicaid recipients have access to the right services at the right time, in the right setting and at the right price.

* Starting in January 2014, the Affordable Care Act authorizes new coverage levels that expand Medicaid coverage in Colorado to those earning up to 133 percent of the federal poverty level, the governor's office reported.

* Currently, 133 percent of the federal poverty level is $14,856 for an individual, $30,657 for a family of four.

* According to the governor's office, current Colorado law allows Medicaid coverage for children and some adults in this income category. The expanded coverage will provide Medicaid to an additional 160,000 adults.

* The federal government will pick up 100 percent of the check for the costs of the newly eligible Colorado Medicaid population through 2016, with federal match rates declining for the next three years until the state's responsibility becomes 10 percent of the costs in 2020.

* Hickenlooper's office reported that the Department of Health Care Policy and Financing continues to strengthen its efforts to control costs and increase value in Medicaid services, with the biggest expected savings to come from increasing effectiveness in care delivery and reforming payment systems to reward value instead of volume.

* An example of increasing the effectiveness in care delivery, the governor's office stated, is the regional providers and organizations in the Accountable Care Collaborative who are rewarded for coordinating care and meeting performance benchmarks -- something that has to date reduced health costs by $20 million and is expected to save $86 million.

* The state also expects $43 million in savings from redesigning its administrative structure and reducing fraud, waste and abuse. Last year, legislation was put in place to incentivize counties finding and preventing client fraud.

* The state's Accountable Care Collaborative Program was put in place in the spring of 2011 and obtained an enrollment of 123,000 Medicaid clients statewide in the first year.

* The Accountable Care Collaborative Program operates on the central goals of improving health outcomes through a coordinated, client-centered system and cost control through reducing avoidable, duplicative and inappropriate use of health care resources.

* There are seven Regional Care Collaborative Organizations statewide that provide medical management, cost coordination among providers and management of a client's health needs by a primary care medical provider.

* Hickenlooper stated that projections show that -- due to the plans put in motion by the Department of Health Care Policy and Financing -- not one dollar from the state's general fund will be required for expansion, even in 2017 when the federal government reduces its share of the cost.

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