2021 -- S 0049

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LC000486

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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S E N A T E   R E S O L U T I O N

RESPECTFULLY REQUESTING THE RHODE ISLAND STATE AUDITOR GENERAL TO

CONDUCT OR OVERSEE A STUDY OR AUDIT ON THE PRIVATIZATION OF RHODE

ISLAND'S MEDICAID PROGRAMS

     Introduced By: Senators Bell, Mack, Anderson, Calkin, and Valverde

     Date Introduced: January 19, 2021

     Referred To: Senate Health & Human Services

     WHEREAS, Medicaid covers approximately 1 in 4 Rhode Islanders, including 1 in 5

adults, 3 in 8 children, 3 in 5 nursing home residents, 3 in 5 individuals with disabilities, 4 in 9

individuals with disabilities, and 1 in 5 Medicare beneficiaries; and

     WHEREAS, COVID-19 has made proper funding and management of the Rhode Island

Medicaid programs even more necessary and urgent; and

     WHEREAS, Prior to 1994, Rhode Island managed its own Medicaid programs

reimbursing health care providers directly; and

     WHEREAS, Since 1994, Rhode Island has privatized an ever-growing portion of its

Medicaid program so that by 2019, 91 percent of all RI Medicaid recipients are in a managed care

program, i.e., 283,033 Medicaid eligible individuals, and Managed Care Organization (MCO)

payments comprise 60 percent of Medicaid benefit expenditures (i.e., about $1.7 billion); and

     WHEREAS, In annual reports since 2009, the Rhode Island Office of the Auditor

General repeatedly found that the State lacks adequate oversight of such private health insurance

companies; and

     WHEREAS, The Auditor General found that Rhode Island overpaid more than two

hundred million dollars ($200,000,000) to private health insurance companies in 2015, and could

not recoup overpayments until 2017, due to opposition from such companies; and

     WHEREAS, Academic peer-reviewed research has found that privatizing management of

Medicaid does not save states money and often costs them more; and

     WHEREAS, In 2009, Connecticut conducted an audit which found that it was overpaying

private health insurance companies (United Healthcare Group, Aetna, and Community Health

Network of Connecticut) nearly fifty million dollars ($50,000,000) of Medicaid funds per year;

and

     WHEREAS, In 2012, Connecticut abandoned its attempt to privatize management of its

Medicaid program and subsequently saved hundreds of millions of dollars and achieved the

lowest Medicaid cost increases in the country; and

     WHEREAS, Rhode Island’s efforts to “reinvent” Medicaid by privatizing it (i.e., hiring

private corporations to implement UHIP/RIBridges and act as MCOs) have not resulted in

significant savings; and

     WHEREAS, Other states (Kansas and Iowa) that have recently experimented with wide-

scale Medicaid privatization have suffered cuts in care, reduced far less costs than expected, and

sacrificed oversight and transparency by handing their programs over to private entities; and

     WHEREAS, After finding insufficient oversight of MCOs since 2009, the RI Auditor

General in the FY2017, FY2018 and FY2019 Single Audit Reports bluntly concludes, “The State

lacks effective auditing and monitoring of MCO financial activity”; and

     WHEREAS, Rhode Island must collect data and analyze the actual costs and benefits of

contracting with private health insurance companies and to date, has not; now, therefore be it

     RESOLVED, That this Senate of the State of Rhode Island hereby respectfully requests

the Rhode Island State Auditor General to conduct or oversee a study or audit similar to the one

undertaken by the Connecticut Comptroller in 2009, to determine whether Rhode Island is

overpaying private health insurance companies and whether reversing the privatization of Rhode

Island’s Medicaid programs can save the State money; and be it further

     RESOLVED, That this Senate hereby respectfully requests the Rhode Island State

Auditor General to report its findings to the Rhode Island Senate and House on or before January

2, 2022; and be it further

     RESOLVED, That the Secretary of State be and hereby is authorized and directed to

transmit a duly certified copy of this resolution to the Rhode Island State Auditor General.

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LC000486

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