HHS outlines Medicaid scale, costs and potential savings levers; committee questions oversight and evaluation

Pat Trainor, Donna Auckland and Sarah Acre (Division of Medical Services) presented a department briefing focused on Medicaid — the largest portion of the Department of Health and Human Services budget — and discussed administrative structure, federal matching dollars, program integrity and options the state could use to control long-term costs.

"We're going to focus on Medicaid today," Pat Trainor said at the start of the presentation, noting the program's central role in the HHS budget. Donna Auckland, HHS chief financial officer, told the task force: "Every week our Medicaid claims are between $25 and $30,000,000" and that the program pays about $120,000,000 per month through the state's MMIS claims system. Auckland explained that the department houses multiple funding streams and that about 68% of HHS’s budget is federal entitlement spending.

Sarah Acre, executive director of the Division of Medical Services, framed Medicaid as an open-ended federal-state entitlement program and summarized key facts and challenges: North Dakota reported roughly 106,000 enrollees in a typical month (about 1 in 7 residents); the state’s traditional FMAP (federal medical assistance percentage) is about 50.97%; and Medicaid expansion adults are covered up to 138% of the federal poverty level under the expansion pathway. Acre also described how program choices affect where costs show up: North Dakota operates a single managed-care plan for the Medicaid expansion population (state statute requires managed care for expansion), while most other populations remain fee-for-service.

The presenters highlighted administrative and technology issues. Auckland and Acre described the Medicaid Management Information System (MMIS) as essential to claims processing, provider enrollment and program integrity. Acre said the MMIS is approaching a decade in service (implemented 2015) and the department is developing a roadmap for modernization, including a hub platform to reduce duplicate interfaces and increase flexibility.

Cost-control levers discussed include utilization-management changes for therapy services (occupational, physical, speech), adjustments to pharmacy authority (Century Code currently limits prior-authorization tools for certain drug classes), rate reviews and value-based purchasing pilots with major hospital systems, and a health-home model aimed at high-need members. Acre said program integrity is integral and that the Medicaid Fraud Control Unit (in the Attorney General’s office) handles credible fraud allegations following department referrals. She also said the department has about 100 full-time staff in Medicaid medical services, with dedicated program-integrity staff and two data analysts in Medicaid.

Committee members pressed staff on specifics and trade-offs. Senator Hogan asked whether the Medicaid Fraud Control Unit was part of HHS; Acre clarified it is within the Attorney General’s office. Senator Davison and Representative Bosch emphasized measurement: Davison asked how recently expanded Legislative Council staffing would be used to evaluate programs, and Bosch asked whether the Legislature should set measurement outcomes or leave them to agencies. Members also questioned the costs and benefits of managed care for expansion (Acre noted managed care allowed faster operationalization and access to higher reimbursement rates but also creates different rate structures and incentives than fee-for-service).

Why it matters: Medicaid accounts for most of HHS spending in North Dakota; choices about eligibility, managed care, rates, utilization oversight, IT modernization and program integrity have direct budgetary and access consequences. The department presented several near-term options (utilization management for therapy, pharmacy policy changes and health-home pilots) that would require policy decisions, statutory changes in some cases and funding for design and implementation.

What’s next: HHS staff offered to return to the task force with deeper dives into long-term care, developmental-disability services and program components such as dental access and eligibility processes; committee members asked for additional detail on staff capacity, audit activity and measurable outcomes for proposed interventions.