In a report sent to the Joint Finance Committee at the end of December, the Department of Health Services (DHS) projected a $39.8 million Medicaid shortfall over the next two years. DHS noted this shortfall is less than one percent of the $6.7 billion Medicaid general purpose revenue (GPR) budget for 2019-21.
The letter from DHS attributed the shortfall to a lower federal medical assistance percentage rate than assumed in the 2019-21 state budget, increasing costs by $20 million GPR over the last nine months of the biennium. Additionally, rates for BadgerCare Plus managed care organizations were higher than budgeted. Finally, DHS said the latest projections include higher estimates for IRIS program expenditures and for Medicare Part D “Clawback” payments to the federal government.
The latest projections are slightly worse than the $21.4 million shortfall DHS projected in September.