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Nursing homes, drug treatment centers and disability support groups say they will have to cut some services or leave clients on wait lists longer after a last-minute decision by state legislators to cut Medicaid rates starting Jan. 1.

Earlier this year, the Department of Public Health and Human Services proposed cutting Medicaid reimbursement rates 3.47 percent and shrinking the list of services covered, as directed by a legislative plan for how to adapt the state budget if revenues came in lower than expected. The Children, Families, Health and Human Services Interim Committee initially opposed the proposed rule changes because “the agency failed to show a reasonable need.” The committee voted to file a formal objection that delayed a decision until the 2019 Legislature.

On Friday, the committee reversed course, allowing the department to immediately move ahead with a 2.99 percent rate cut and shortened list of covered services. Five of the eight members said additional information from the department satisfied  their concerns: Reps. Kathy Kelker, D-Billings; Dennis Lenz, R-Billings; and Sens. Eric Moore, R-Miles City; Al Olszewski, R-Kalispell; and Gordon Pierson, D-Deer Lodge.

Matt Kuntz, executive director of the National Alliance on Mental Illness in Montana, said he isn’t entirely surprised the committee dropped its objection. He said it was crucial in encouraging a special session to mitigate more severe cuts.

“I don’t think there’s a lot more room that the committee could have achieved in actual funding during the interim,” he said. “I don’t think it necessarily had the ability to raise case management rates. It didn’t have the ability to raise Medicaid rates.”

Recovery Center Missoula Executive Director Tammera Nauts agreed the cuts could have been worse, but are still serious.

“It’s still going to be a hardship,” she said. “Not just for substance use disorder treatment, but for all the programs that are going to sustain cuts.”

A single-digit reduction might seem small, but the impact could be significant because so many clients are covered by Medicaid. Providers said the program already did not cover the actual costs of care in many cases.

Kuntz said NAMI is still concerned the rate reductions could make it more difficult to connect patients to providers.

“I think there’s always opportunity to alter and change the system, but these drastic rate cuts are forcing providers to make a lot of scary decisions about even shutting down offices,” he said.

Lenette Kosovich, CEO of the Rimrock Foundation addiction treatment center in Billings, said about 30 percent of clients were covered by Medicaid before the state expanded the program in 2016. Today, almost 75 percent are covered by the program at rates lower than private insurance, leaving them less room to find ways to fill budget gaps without reducing services.

“A privately insured patient is double what we get from Medicaid,” she said, so all the extra, little losses add up, especially when some critical services, like case management, are no longer eligible for reimbursement.

As a result, Nauts said the wait list for people covered by Medicaid will get longer because the drug treatment and mental health programs will need more privately insured clients to make their budget work. Currently, Medicaid clients must wait six months to a year to start care, she said.

Programs that once offered case management will lose that support entirely or, with the help of other funding sources, see that budget reduced. A few weeks ago, the Western Montana Health Center pointed to the pending cuts as the reasons for dozens of layoffs.

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“Case managers are imperative to the success of those with chronic mental illness and helping them stay out of our local emergency rooms and Warm Springs, the Montana State Hospital,” Nauts said. “They help the clients succeed in every area of their life, from housing to daily living skills to shopping and connecting them to medical care.”

It’s all those pieces of non-medical care that give patients a sure footing, providers said.

When contacted Friday afternoon, William Buck said he had not yet heard that the legislators withdrew their objection to the cuts. He said he couldn’t speak to the specifics of how the 2.99 percent cut would impact the services he provides at Shepherd’s Way Assisted Living in Lewistown.

Buck, the administrator, previously testified to the legislative committee in July and said he would have to reduce the number of Medicaid patients he accepts if the health department adopts the original proposal.

Buck said he didn’t know the specific impact of the 2.99 percent rate reduction, but was more concerned that legislators were allowing any cuts to Medicaid providers.

“It’s a crime,” he said. These clients “have nowhere else to go, they have nothing else they can do. We’re taking away the help we guarantee they have.”

The health department has said delaying the rate reductions could trigger deeper cuts in the future, but Buck said it’s not something providers can worry about when struggling to offer immediate services.

“What we feel here is the now,” he said. “We’re not legislators. We have to count on people in elected positions to advocate for the people they were elected to advocate for, and they don’t seem to be doing that.”

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Projects reporter covering Montana, Montanans and their government.