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LFC: Medicaid spending rose while some outcomes lag and access remains uneven
Summary
LFC staff told lawmakers Medicaid expenditures rose to billions while enrollment fell; the Medicaid accountability report flagged rising per-member costs, data gaps under the Turquoise Care managed-care model, secret-shopper findings showing appointment challenges, and a costly IT implementation with potential fraud-recovery shortfalls.
Legislative Finance Committee staff presented the Medicaid accountability report and told lawmakers that state Medicaid spending has increased significantly even as enrollment declined after the public-health-emergency unwinding.
"In FY23 Medicaid expenditures were $9,090,000,000," LFC analyst Dr. Allegra Hernandez said, and staff projected FY26 expenditures could top $11.4 billion. Hernandez highlighted that behavioral-health unit costs rose substantially (the report cites a 97% increase from FY21 to FY26), while certain outcome measures, such as 30-day follow-up for emergency-department behavioral-health visits, have declined from about 37% in 2022 to 31% in 2025.
LFC also described access problems found by a secret-shopper survey: on average it took six to seven calls to book a new primary-care appointment and 14 calls for a new behavioral-health appointment; in the LFC'conducted sample, roughly 256 primary-care and 259 behavioral-health provider records were tested. LFC staff warned that the state lost over 1,000 prescribing and 427 non-prescribing behavioral-health providers between 2022 and 2024.
The Health Care Authority's chief medical officer, Alana Dances, disagreed with some LFC emphases and said the report omitted context about the suite of performance measures HCA uses, the timing of expected results, and recent mandated program expansions. "When you look at new benefits and programs, you'd expect process measures to change in about 18 months and outcomes in 3 to 5 years," Dances said, arguing that utilization and process upticks can reflect successful rollout rather than failure.
LFC staff also warned of administrative challenges: the new Medicaid enterprise system (described in testimony as the Mizer system) has grown in projected cost from roughly $220 million to about $533 million, with a general-fund share of approximately $53 million; LFC staff noted continued low federal returns on fraud-recovery efforts and suggested the state is recovering "pennies on the dollar" from criminal Medicaid fraud prosecutions.
Committee members pressed both LFC and HCA on the secret-shopper methodology, how many disenrollments were procedural (paperwork) versus eligibility-based, whether provider migration can be tracked via an all-payer-claims database, and how work requirements in forthcoming federal rules might affect coverage rolls. LFC said it is negotiating access to the all-payer claims database to study physician migration patterns and will follow up with more detailed analyses.
The committee requested supplemental data (breakdowns of abuse/neglect categories, exact sample sizes and methodology, and physician migration analyses) before taking further policy steps.
