Alexander Group defends report against claim of $575 million error

Medicaid Report
Joel Page

Mary Mayhew, commissioner of the Maine Department of Health and Human Services, right, joined by Gary Alexander, a consultant hired by the LePage administration, appears before the Health and Human Services Committee Tuesday Jan. 14, 2014 in Augusta, Maine. (AP Photo/Joel Page)

AUGUSTA — A consulting group hired by the state to study Medicaid expansion, among other topics, defended its initial report Tuesday against claims from a national health care organization that its math didn’t add up.

At question was a calculation by the Alexander Group in its Medicaid Expansion Feasibility Study that attempted to calculate the cost of a potential expansion. The group said that expanding Medicaid, known in the state as MaineCare, would cost Maine $807 million over 10 years.

Crucial to that calculation is the projected contribution of the federal government, known as the “federal medical assistance percentage,” or FMAP. While expansion includes a 100 percent federal funding level for those low-income Mainers made newly eligible for the program, traditional populations and administrative costs will continue to be shared by the state and federal government.

According to a review of the report by Health Management Associates, a national consulting firm focused on health care programs for the poor, especially Medicaid, the numbers didn’t add up.

Health Management Associates’ Kathy Gifford — a former state Medicaid director in Indiana and co-author of the annual Medicaid Budget Survey Report for the Kaiser Foundation — wrote in a memo to the AARP that, according to her calculations, the Alexander Group used different numbers than it had claimed.

A lower federal match would naturally result in increased cost for the state.

The Alexander Group wrote that it used a range of different FMAP predictions for different populations covered by Medicaid, none of which fell below 61.55 percent traditional Medicaid match rate estimated for 2014.

“According to my calculations, however, a 60 percent FMAP rate was used instead, overstating the baseline costs over the 10-year period by $575 million,” Gifford wrote. “… It would be worth asking for additional detail for these calculations to determine if the overall federal share has been understated.”

Gifford wrote that the error appeared in the Alexander Groups’ baseline projection — that is, the expected growth in Medicaid costs if the state did not expand coverage. She said she could not determine whether a similar numbers switch was employed in the cost projections if Maine did expand the program.

Gifford based her review on simple calculations: The Alexander Group provided estimates of enrollment growth and state and federal spending for each year of the 10-year projection. She simply calculated the percentage of the total cost borne by each side.

Eric Randolph, an analyst with the Alexander Group who helped craft the report, said Tuesday that Gifford oversimplified the calculation, and that there was no such error.

Randolph said that because different areas of Medicaid spending receive different levels of federal funding, you can’t distill a match rate down to a single number.

“I’m kind of surprised she did it that way,” he said. “She should know better that you can’t calculate it that way.”

However, none of the estimated match rates identified by the Alexander Group in its report dipped below the 61.55 percent traditional Medicaid match rate projected for 2014. That left Gifford puzzled by how the average federal match across all categories could be 60 percent.

Murray Blitzer, another member of the Alexander Group, suggested Tuesday that the figures in the study included not just Medicaid spending, but also medical services paid for with state dollars only.

“If you look at the baseline, it’s coming off the state spending occurring in MaineCare and other related services,” he said. “Most Medicaid programs in the states, it’s a combination of Medicaid and some assistance that’s state-only.”

It was unclear exactly what state-funded services were included — or why they were included at all. Those services would not necessarily grow along with Medicaid expansion.

“If he’s including non-Medicaid costs in there, that would drive [the average match rate] down, I guess,” Gifford said. “But you’d have to say that if it’s a non-Medicaid program, why is it in there? A state-only program isn’t going to grow unless appropriations grow. Those aren’t entitlements.”

Efforts to reach Randolph and Blitzer for additional comment Tuesday were unsuccessful.

Gifford also raised concerns that had been voiced by other groups since the study was released on Jan. 10, namely that the report did not include any analysis of possible savings associated with Medicaid expansion, nor the economic impact of billions of federal dollars flowing into the state.

The Alexander Group has said those questions were outside the scope of its study.

Rep. Drew Gattine, D-Westbrook, sits on the Legislature’s Health and Human Services Committee, which on Wednesday will hold work sessions on two bills that would expand Medicaid in Maine, both of which are opposed by Republican lawmakers and Gov. Paul LePage, who cite the Alexander Group study in saying expansion would be too costly.

On Tuesday, Gattine said questions surrounding the report could easily have been addressed if the group had shown its work. He said questions about the FMAP rate were similar to those asked about the Alexander Group’s prediction that the number of Mainers living under the poverty line would grow 31.5 percent over 10 years. That prediction is a crucial factor driving up the cost of expansion outlined in the report.

“What they should do is show us their math, show us their formula,” he said. “It’s similar to the issue around the poverty rate. If they want to defend what they’re saying they used, then walk us through the math.”

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Comments

CAROLYN LIBBEY's picture

There is no other recourse,

There is no other recourse, Mr. Alexander. You owe an explanation of your methodology (and specific mathematical formulas) used in coming up with your numbers to Maine citizens and their representatives!

JERRY ARIPEZ's picture

See I told YOU

The numbers didn't jive....and these putz's stick to the report as still viable and accurate...WOW

Maine folks got ripped off for $925 K that LePage should pay back to the people....
_________________________________________

"In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican."

~H. L. Mencken

JERRY ARIPEZ's picture

All Michuad has to do now

Is do a Rudy Giuliani, repeating in LePage's face at the debates and on TV...instead of 911...it should be 925, 925 at all conferences and media broadcast.... label the porker--- 925K LePage....

FRANK EARLEY's picture

There is just to much missing.......

It's very easy to present a bunch of numbers, and predictions, and say this is the answer. This is the report you commissioned me to produce. Whats easy about the numbers and predictions is, without the actual work that went into reaching these conclusions, your free to say what ever you need to make the report say what you want it to.
LePage sat on this report for how many days before releasing it to the public? How much of that report could have been tweaked to say what ever he wanted the report to say? With out the work to indicate just how the math was done, it's nothing more than just a bunch of meaningless numbers. I agree with John, when I was in school, and lab reports or just plain math papers were turned in. Unless I attached the methodology and numbers I used to come to my conclusions, that work wasn't even accepted. I would think that for nearly a million dollars, there would be just a little more than just the so called final numbers.
So now we have a million dollar report, which can't be trusted, and a Governor who is making all his decisions based on this worthless document. I'm not to worried though, I mean it's only about half a billion dollars in question. It's not like it could set the State back any. Not if we read the numbers correctly.............

JOHN PAINTER's picture

While I generally believe

While I generally believe some data, even bad, is better than none at all, this is not the case in Maine. We have ample data from a variety of state and private sources (hospitals, behavioral healthcare services, etc) to work with. After reading through the report myself I'm dismayed at the lack of use of Maine data and the black-box methodology the group uses to draw conclusions from - none of my professors in grad school statistics study design would have accepted such work from me, and I certainly wouldn't accept this.

Back to Maine data and our states challenges. I am routinely troubled by the near total absence of utilization of qualitative methods in Maine's DHHS for investigating what is happening in Maine's Medicaid program since human behavior plays such a central role in healthcare utilization.

JOHN PAINTER's picture

While I generally believe

While I generally believe some data, even bad, is better than none at all, this is not the case in Maine. We have ample data from a variety of state and private sources (hospitals, behavioral healthcare services, etc) to work with. After reading through the report myself I'm dismayed at the lack of use of Maine data and the black-box methodology the group uses to draw conclusions from - none of my professors in grad school statistics study design would have accepted such work from me, and I certainly wouldn't accept this.

Back to Maine data and our states challenges. I am routinely troubled by the near total absence of utilization of qualitative methods in Maine's DHHS for investigating what is happening in Maine's Medicaid program since human behavior plays such a central role in healthcare utilization.

AL PELLETIER's picture

They must think all us Mainers are ignorant.

The more Lepage and Republican lawmakers use the Alexander report as basis for refusing federal Medicaid funds the dumber they look.
The report, obviously, exaggerates the negative impact of expansion and does not factor in the influx of millions of dollars from the Fed. making the entire report BOGUS!
Lepage and Mayhew owe the people of Maine $995,000.00.

JERRY ARIPEZ's picture

Al it's not about numbers or LePage thinks he has a brain

It's about ideology and to make it always political...

They HATE Black people, the poor and sorely profoundly, the President...

Look at these states and see who the Governors are;
Obamacare in Red and Blue America: Two Charts Tell the Story

http://www.newrepublic.com/article/116272/how-red-states-are-holding-bac...

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