The Virgin Islands Senate approved $3 million for the V.I. Human Services Department to shore up shortfalls with the Medicaid program in a marathon legislative session all day Monday. The bill goes to Gov. Albert Bryan Jr.’s desk for final approval.
The money was to pay providers and vendors that participate in the Medicaid program and for other related purposes.
Without the financial injection, the territory’s Medicaid system could completely whither, said Averil George, commissioner of the V.I. Human Services Department.
“If we don’t get this $3 million we’ll have to say our entire Medicaid services are compromised,” George said. “DHS is in need of additional funds to support a shortfall in the Medicaid local match for claims to pay past due expenses to providers and to support the continued operation of the Medicaid program.”
As of Monday, 21,463 Virgin Islanders were enrolled in Medicaid, down from a COVID-19 pandemic high of 38,489 in June 2023, she said. The increase came from waivers granted by the Federal Center for Medicare and Medicaid Services that mandated any recipient still eligible during the pandemic remain enrolled throughout the Public Health Emergency in exchange for a higher Federal Matching Assistance Percentage.
“With the Public Health Emergency ending on May 11, 2023, the V.I. Medicaid’s unwind process began in June 2023, requiring all members to be recertified and since then, enrollment has reduced by 44 percent,” George said. “Even with a significant decrease in members, contrary to the department’s anticipation, the program’s claims expenditures have not reduced accordingly. For Fiscal Year 2024, claim cycles average $8.6 million per month while in Fiscal Year 2023, claim cycles averaged $9.3 million in expenditures. At almost three quarters of the year, the department has spent 81 percent of what it spent in all of FY23 for claims, and at the end of Quarter 2, had spent 9 percent more on claims than it did in Q2 of Fiscal Year 2023,” said George in a written statement.
While there were many causes of the shortfall, one acute cause was a tiny number of Medicaid recipients soaking up a large amount of services. A study conducted in 2023 showed that between 2020 and 2022, two percent of Virgin Islands Medicaid recipients drove 29 percent of its costs.
“As the medical needs of the community continue to grow and Medicaid approved services expands, the need for additional local match that supports maximizing the federal allotment is needed. Concurrently, the program must find ways to reduce spending as well as fraud, waste and abuse to allow for the best use of available funds and to ensure sustainability of the program,” George said.
Solutions for cutting the budget shortfall, conversely, include bringing on additional staff who can assist in vetting referrals and to provide prior authorization for procedures, she said. There’s also a need for additional fraud investigators. The department would also reinstate preauthorization requirements for most services and cap costs covered for some services.
There are also some 2,000 Medicaid recipients in the territory who may be eligible for federal prescription aid.
“In the short term, the team will be faced with determining on a case-by-case basis what services can be performed with the highest priority being placed on emergency and life-threatening services and procedures as well as mandatory services such as those for children,” George said.
The Senate also approved two men for the Waste Management Authority Board: Conn Davis Jr., a St. Thomas-based investment expert and owner of Community Medical Laboratory, and Lindel Williams, a St. Croix construction and engineering expert who was also commissioner of Public Works during the Gov. Roy Lester Schneider administration. Both have years of experience in dealing with financing, project management, government bureaucracy, and innovations like waste-to-energy technologies.
