Medicaid officials outline forecasting changes, update lawmakers on waitlist progress

Indiana Medicaid officials say they’ve adjusted their processes for financial reporting and forecasting to avoid future budget problems after a $1 billion error last year. Officials are starting their forecasting process earlier than normal and will continue to adjust the forecast as they collect more data.

The Indiana Family and Social Services Administration announced in January it would be improving its Medicaid forecasting and budget monitoring processes.

It started publishing monthly financial reports in May. The monthly financial reports include information for the specific month and year-to-date information on three categories: expenditures, enrollment and funding.

Paul Bowling, chief financial officer for FSSA, said the agency shares the reports with experts from other state agencies – including the state budget agency – to get feedback and develop commentary to improve the accuracy of this year’s forecast.

“We’re setting up a reporting structure review process so that we can identify certain trends and risks that we may have not been able to catch in the past,” Bowling said.

That reporting structure review process includes two groups formed after last year’s forecast.

The financial reporting group was established to create and maintain the monthly Medicaid financial reports, which includes providing feedback on “unexpected” trends. Feedback from other agencies is shared with the reporting group to validate the information and determine if any additional research and discussions are needed.

“The overall objective of creating financial reporting is to improve our monitoring of various Medicaid data elements, and the comparison of this data to forecast projections,” Bowling said.

The policy change review group was created so all Medicaid policies go through a review process to ensure the agency understands the potential impact of the changes.

Bowling said the output from those two teams goes through a steering committee before final decisions are made. That committee is responsible for getting input from the governor’s office, and state budget and legislative fiscal staff.

Bowling said there are three goals for the new process: reduce “data lag,” identify emerging risks, and produce a more detailed review of trends in the forecast.

Indiana Medicaid Director Cora Steinmetz said getting as close to “real time” data as possible should improve the overall forecasting process.

“The more we can shrink that gap and data lag, the more accurate we’re going to be able to forecast what we think expenditures and enrollment utilization looks like going forward,” Steinmetz said.

Bowling said FSSA is using the new process to develop the December 2024 forecast, which will be presented to the State Budget Committee.

“Since we’re starting this process much earlier than normal, we will also be refreshing our data before the forecast is finalized, which allows us to utilize the most current data available,” Bowling said.

Some lawmakers on the Medicaid Oversight Committee questioned Medicaid officials on what they would be able to do if they did identify a problem.

Steinmetz said there are categories of cost controls the state can adjust depending on what causes the problem. These include eligibility and enrollment criteria, what services are covered and reimbursement rates. Steinmetz said each of those categories has different tools.

“If these are mandatory services or something that we’re required to provide, we have limited ability to really control that as much as if it is something that’s within our authority to take action to steer towards, a lower cost of care setting or steer towards lower cost service or control utilization or rates,” Steinmetz said.

Medicaid officials also provided updates on the cost-containment strategies FSSA announced in response to last year’s error. They said FSSA has implemented all of the strategies and completed most of them.

Most of the changes FSSA announced were focused on home- and community- based services for people with disabilities and people who want to age in place. Among other things, the agency implemented a waitlist for services, restructured one of its Medicaid waivers, and changed who is able to provide attendant care under the two new waivers.

Several lawmakers echoed criticism raised at last week’s Medicaid Advisory Committee meeting about the implementation of the waitlist.

Sen. David Niezgodski (D-South Bend) said many people don’t have enough information — such as where they are on the waitlist — which he said can create a lot of fear.

“If people are getting hurt in this process, that’s the number one thing we should be concerned about,” Niezgodski said.