♪♪ >> ERIC: CONTINUING THE THEME OF FEDERAL ACTION IMPACTING MINNESOTA, WE'RE GOING TO TURN OUR ATTENTION NOW TO MEDICAID.

NO WIDESPREAD CUTS TO THE PROGRAM HAVE HAPPENED YET, BUT A BUDGET RESOLUTION PASSED BY THE U.S. HOUSE OF REPRESENTATIVES HAS RAISED GREAT CONCERN.

JOHN CONNOLLY IS MINNESOTA'S DEPUTY COMMISSIONER OF HUMAN SERVICES AND STATE DIRECTOR OF MEDICAID.

WELCOME TO "ALMANAC."

WE SHOULD SAY, IT'S COMPLICATED, RITE OFF THE BAT.

MEDICAID IN MINNESOTA IS MEDICAL ASSISTANCE.

>> THAT'S RIGHT.

>> Eric: WHAT -- ARE YOU CAPTURED BY THIS UNCERTAINTY ALONG WITH EVERYBODY ELSE?

>> WE CERTAINLY ARE.

SO THERE'S A LOT OF UNCERTAINTY WITH RESPECT TO WHAT MAY HAPPEN AT THE FEDERAL LEVEL.

THERE IS A BUDGET TARGET AND A HOUSE BUDGET RESOLUTION THAT IS $880 BILLION.

OVER ROUGHLY A DECADE.

AND THAT TRANSLATES INTO ROUGHLY A BILLION AND A HALF DOLLARS TO CUTS IN MINNESOTA JUST DOING BACK OF THE ENVELOPE MATH.

AND THAT COULD MEAN REAL CUTS.

>> Cathy: WE SHOULD SAY, TOO, THAT THE PROGRAM IS A FEDERAL AND STATE ROGRAM.

HOW DO YOU EXPLAIN THIS TO PEOPLE WHO MIGHT NOT UNDERSTAND?

>> THAT'S CORRECT.

SO THERE'S CONTRIBUTION BOTH FROM THE STATE IN TERMS OF THE STATE BUDGET AND ALSO FEDERAL MATCHING FUNDS AS THEY'RE CALLED.

IT'S A SHARED RESPONSIBILITY BETWEEN THE STATE AND THE FEDERAL GOVERNMENT TO PROVIDE HEALTH SERVICES TO ROUGHLY -- OR HEALTH COVERAGE I SHOULD SAY TO ROUGHLY ONE IN FOUR MINNESOTANS.

>> Cathy: AND WHO ARE THESE PEOPLE SPECIFICALLY?

BECAUSE I THINK THERE'S ALSO SOME STEREOTYPES.

>> SURE, SO IT'S A LARGE PROGRAM.

IT COVERS ROUGHLY 1.3 MILLION MINNESOTANS INCLUDING MINNESOTACARE, UR BASIC HEALTH PROGRAM.

AND IT COVERS OLDER ADULTS, PEOPLE 65 AND ABOVE WHO NEED LONG-TERM SERVICES AND SERVICES.

IT COVERS CHILDREN, ROUGHLY 40% OF KIDS IN MINNESOTA.

IT ALSO COVERS A LOT OF PARENTS AND PERINATAL SERVICES, FOR EXAMPLE, BEFORE AND AFTER BIRTH.

>> Eric: DOES THE DEPARTMENT HAVE ANY RESERVES ON HAND THAT COULD HELP CUSHION THE BLOW IF IT COMES TO THAT?

>> SO WE WOULDN'T BE ABLE TO IN THE STATE BUDGET TO COVER A GAP OF THAT MAGNITUDE.

THAT'S ANOTHER SOMETHING THAT THE STATE WOULD BE ABLE TO COVER.

>> Eric: THERE ISN'T A POT OF MONEY SITTING OUT THERE THAT YOU HAVE IN A RESERVE AS A DEPARTMENT OF HUMAN SERVICES?

>> NO, NOT THAT I'M AWARE OF.

>> Eric: OKAY.

>> Cathy: WHAT COULD YOU THINK OF WHAT THE PROFESSOR BROUGHT UP FOR THE POTENTIAL FOR RURAL NURSING HOMES TO HAVE ISSUES IF, AGAIN, THERE ARE CUTS COMING DOWN THE PIKE FOR MEDICAID?

WHAT ARE HE DOMINOES HAT COULD FALL?

>> YOU KNOW, THAT'S ABSOLUTELY AN POINT POINT.

MEDICAID IS THE LARGEST PAYER OF LONG-TERM SERVICES AND SUPPORTS FOR PARTICULARLY OLDER ADULTS AND ALSO PEOPLE WITH STABILITIES.

SO IT DOES PRESENT A TREMENDOUS RISK TO SKILLED NURSING FACILITIES, NURSING HOMES.

AND OTHER TYPES OF LONG-TERM SERVICES AND SUPPORTS IN THE COMMUNITY.

>> Cathy: SO I'M BETTING THAT THE PHONE LINES ARE BURNING UP AND PROBABLY A LOT OF EMAILS ASKING, SO WHAT DO WE DO?

SO WHAT'S YOUR GUIDANCE TO SOME OF THE PROGRAMS AND SOME OF THE FACILITIES AND INDIVIDUALS YOU'RE DEALING WITH?

>> WELL, I THINK ONE OF THE FIRST IMPORTANT THINGS TO DO IS JUST EXPLAIN THE IMPACT OF THE PROGRAM, WHO IS COVERED BY IT, WHAT SERVICES IT COVERS, THE KIND OF NEEDS THAT EOPLE HAVE AND THE PROGRAM AND ITS MISSION.

SO I THINK AGAIN, ONE IN FOUR MINNESOTANS IS COVERED.

IT COVERS SOME REALLY ESSENTIAL SERVICES FOR OLDER ADULTS, SENIORS, KIDS.

AND TOES WHO ARE PREGNANT.

SO THAT'S A REALLY IMPORTANT PART OF WHAT WE NEED TO COMMUNICATE.

>> Cathy: AS THE STATE, THOUGH, IS LOOKING AT CRAFTING A NEW TWO-YEAR BUDGET, WHAT ARE THE CONTINGENCIES, THOUGH, AGAIN?

WE'RE NOT REALLY HEARING ANY PLAN FROM THE STATE AT THIS POINT?

WHAT ARE YOU SAYING TO YOUR STAFF EVEN SOME >> YEAH, IT'S EXTREMELY UNCERTAIN.

I THINK WITHOUT UNDERSTANDING WHAT EXACTLY THE BUDGET CUTS MIGHT BE OR WHAT SORT OF REDUCTION IN FEDERAL FUNDING MIGHT BE, IT'S VERY DIFFICULT TO PLAN FOR THAT SCENARIO.

I THINK, AGAIN, THE MOST IMPORTANT THING WE COULD DO IS JUST COMMUNICATE.

WHAT'S REALLY AT RISK AND THE IMPORTANCE OF PROGRAM AND WHO CAN COVERS.

>> Eric: CAN YOU WRING SOME SAVINGS OUT OF WASTE, FRAUD, AND ABUSE.

>> SO CERTAINLY I THINK THERE'S ALWAYS OPPORTUNITY TO INCREASE AND ENHANCE PROGRAM INTEGRITY ACTIVITY.

THE GOVERNOR'S BUDGET INCLUDES AN ANTIFRAUD PACKAGE USING THINGS LIKE A.I., INCREASED OVERSIGHT AND REGULATORY ACT.

SO THOSE ARE CERTAINLY THINGS THAT WE WOULD LOOK AT.

BUT THAT KIND OF ADVANCEMENT OR THOSE SORT OF POLICY PROPOSALS IN THE BUDGET WOULD NOT COVER A $1.5 BILLION SHORTFALL.

THERE ISN'T THAT LEVEL OF FRAUD OR WASTE OR ABUSE IN THE PROGRAM.

THAT REALLY REPRESENTS REAL SERVICES TO PEOPLE WHO NEED THEM.

>> Eric: YOU'LL BE CENTER STAGE DURING THE BUDGET NEGOTIATIONS AT THE STATE LEVEL COMING UP.

SO -- >> YES, THAT WILL COME SOON.

>> Eric: ALL THE BEST.