Rhode Island: Medicaid Working Group Delivers First Report with FY16 Savings Opportunities

The Working Group to Reinvent Medicaid, established through Executive Order in February, delivered its first report to Governor Gina Raimondo (D), identifying 34 initiatives to reduce State spending on Medicaid by $91.1 million in Fiscal Year (FY) 2016. The Working Group's recommendations are categorized into three domains: 1) Payment and Delivery System Reform, 2) Targeting Fraud, Waste, and Abuse, and 3) Administrative and Operational Efficiency. The two largest initiatives, expected to generate $29.0 million in State funds savings, include the payment cuts to hospitals and nursing homes proposed by the Governor in her FY16 budget. The Working Group recommended that a portion of those savings be used to fund incentive payments to providers to reward performance and quality outcomes. The Group also recommended that the State move towards value-based payment arrangements, aiming to have 30% of all Medicaid provider payments in alternative payment models (e.g., accountable care organizations, patient centered medical homes, bundled payments) by the end of 2016; however, the Group did not anticipate savings from this initiative in FY16. The Working Group is expected to deliver a report to the Governor by July 1 outlining a multi-year transformation plan for the Medicaid program and State publicly financed healthcare in Rhode Island.