State Medicaid Expansion Opportunities Harmed by NJ Implementation Woes

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December 31, 2014; Tuscaloosa News and

As 2014 came to a close, the state of Alabama turned over the management of its Medicaid programs in the north and west-central parts of the state, covering roughly 200,000 Medicaid patients, to a new nonprofit, Alabama Community Care. The nonprofit, linked to the Huntsville Hospital Health System, will be paid between $3,000 and $4,000 per patient, amounting to at least $600 million a year, if the federal government accepts the state’s plan. According to the News, Alabama Community Care “would employ caseworkers, social workers, nurses, dietitians and pharmacists to help care for the Medicaid patients…[but patients] would continue to see their current doctors.”

While NPQ cannot comment on the pros and cons of the new structural change in Alabama, which is basically a managed care alternative to the more typical fee-for-service model of Medicaid, the News story suggests that Alabama Community Care has a number of willing partners in the plan, including nonprofit hospitals and health centers, and that the state’s Medicaid Task Force is pleased and enthusiastic with the change.

Enthusiasm around Medicaid isn’t necessarily the norm in other states, unfortunately. Kathleen O’Brien of the Star-Ledger (undertaking a project for the National Health Journalism Fellowship program of the University of Southern California’s Annenberg School of Journalism) has a distressing story on about a Medicaid disaster in Governor Chris Christie’s New Jersey. O’Brien reports that 11,000 people in the state have been unable to enroll in Medicaid for several months partly due to a “stunning computer failure…[that] has forced the exit of one vendor, left countless boxes stuffed with confidential enrollment data piled in the corridors of county offices and forced workers to rekey data into county computers that cannot interface directly with the state’s 1980s-era main system.”

At the Ocean County Board of Social Services, Ellen Vidal, the president of the unit of the Communications Workers of America, admits, “We’ve gone back into the Stone Age.” Matt Salo, executive director of the National Association of Medicaid Directors, described New Jersey’s response to this crisis and its lack of a long term plan as a “colossal failure.” So much for the vaunted technological advancements that have supposedly remade human services in the twenty-first century. As a result, low-income, some Medicaid-eligible families in New Jersey are going without health insurance coverage and bypassing medical treatment that family members need.

Amazingly, New Jersey’s supposedly new computer system, via a contract with Hewlett-Packard, “was to have produced a state-of-the-art system for New Jersey to process all its social service aid programs, from Medicaid to food stamps and child-care assistance. It was to have been able to communicate in real time with federal data hubs as well.” In this case, the federal system is working better than the state’s, and that speaks volumes. Making this situation doubly concerning is that New Jersey is one of the states that agreed to expand its Medicaid eligibility, up to an income of $31,716 for a family of four. Reportedly, according to Salo, a few other states have also seen failures in their Medicaid computer systems.

In the 27 states plus the District of Columbia that have accepted expanded income eligibility for Medicaid up to 138 percent of the federal poverty level, the results have been more positive than in non-expansion states regarding the numbers and proportions of previously uninsured adults now having health insurance coverage. The need for expanded Medicaid coverage for the poor—remember, 138 percent of the official federal poverty level is still poor—is warranted by the numbers. Some previously rejectionist states are warming to the idea of expanding Medicaid eligibility. Newly-elected Texas governor Greg Abbott, in contrast to his predecessor, Rick Perry, has expressed some willingness to discuss Medicaid expansion. Tennessee governor Bill Haslam has declared Medicaid expansion the “morally and fiscally right thing to do” and Ohio’s governor John Kasich is again preparing to pitch a full Medicaid expansion to replace the limited expansion approved by the Ohio legislature.

Stories like New Jersey’s unadulterated mess, reviving memories of the first year of at the federal level, don’t help make the case for providing health insurance for poor people and shifting the burden of payments out of charity care. Nonprofits might want to look at expanded nonprofit roles in the administration of state Medicaid programs, but also, as advocates, closely scrutinize the state’s implementation plans—particularly contracts like New Jersey’s which, though meant to better integrate Medicaid services with other programs, appear to have been botched due to weaknesses in contract performance language and poor governmental oversight.—Rick Cohen

Correction: The story by Ms. O’Brien was erroneously attributed to Saed Hindash, her photographer. NPQ regrets the error.

  • Matt Salo

    The author here did a disservice by misquoting and misrepresenting my comments from a different article. The article he refers to contains a number of statements made with respect to the colossal failure of the company (HP) that New Jersey hired to build a very complicated IT system. At no point in the article did I ever refer to New Jersey’s response or its long term plan as a “colossal failure”. In fact they neither of them were. As I (and others) pointed out in that article, the leadership in New Jersey is “doing the best it can in a bad situation”, and that the blame lies in the vendor that completely botched its efforts to deliver a complex product in admittedly a very short time period.