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State Budget: From Medicaid Compromise to Serious Games

In the final days to the legislative session, while the transportation compromise was a hot topic, much focus was also on coming to an agreement over adjustments to Virginia’s 2012-2014 budget.   An agreement on the issue of Medicaid expansion was reached on the final day of session, clearing the way for budget passage and an on-time adjournment.
Medicaid coverage extension and reform:
The compromise reached creates a pathway toward potential Medicaid expansion, but only after substantial reforms are approved for implementation (read the Governor’s letter to the US Secretary of Health & Human Services on the “reform firewall”). It represents the best option to ensure the program’s long-term stability and affordability while providing greater coverage for Virginia’s uninsured population.
If  Virginia does not reform its Medicaid program and expand coverage, federal funds that could be spent here will instead be used to support Medicaid expansion in other states. Meanwhile, uninsured Virginians will continue to seek care through hospital emergency departments. With hospitals legally mandated to treat patients without insurance, the hospitals are forced to shift the financial burden on the insured while allowing the uninsured to seek care at the most urgent stage of their condition. This inefficient and costly delivery of health care is a leading factor in the ever escalating costs within our nation’s health care system.
Additionally, Medicaid is consuming an ever-growing share of Virginia’s General Fund, to the detriment of other priorities such as transportation, public safety and education. Medicaid reform must reduce these growing costs through innovative care models that have succeeded in the private sector, while taking full advantage of federal funding to defray additional costs to Commonwealth taxpayers. Components of the compromise include:

  • Directed the Secretary of Health and Human Resources and the Department of Medical Assistance Services (DMAS) to develop a “comprehensive value-driven, market-based reform of the Virginia Medicaid/FAMIS programs”
  • Authorizes DMAS to pursue authorization from federal government to implement these reforms
  • Creates the Medicaid Innovation and Reform Commission (5 delegates, 5 senators) whose approval is required for expansion provided the reforms are made (otherwise the Governor would control whether the expansion proceeds).

Other budget items of note:

  • The Governor’s proposed budget removed the $31 M allocated for Cost of Competing Adjustment (COCA). This adjustment provides additional funding for school districts in higher cost of living areas such as Northern Virginia.   The General Assembly restored $9.4 M to COCA, still representing a significant gap in funding for local school budgets. Prince William County Schools will see a reduction of over $6 M in state funding for FY 2014.
  • Funding was provided for George Mason University  Prince William Campus life-sciences building as well as the Hylton Performing Art Center.
  • Additionally GMU received $1 M for STEM-H programs and $250,000 for the Serious Games Institute which is looking to relocate to Prince William campus and would bring significant economic development opportunities.