State lawmakers from rural Pennsylvania are pushing back on a privatization measure slipped into last year’s state budget that would affect transportation for at least 150,000 Medicaid recipients.
Under Medicaid, or Medical Assistance as the program is known in Pennsylvania, qualified recipients can get free rides to non-emergency medical appointments, such as a regular doctor’s visit or cancer treatment.
According to a Texas A&M University study, about 7 percent of Pennsylvania Medicaid enrollees used the state’s Medical Assistance Transportation program, or MAT, in 2014, accounting for a little less than 11.5 million rides.
The total cost of the program was $148 million, split between the state and federal government, for an average cost of $13 a ride.
But last year’s Human Services code — a large piece of enabling legislation passed with every state budget — instead ordered the commonwealth to contract the whole program out, region by region, to private companies with no input from local governments.
This is known as a brokerage model.
“We’re talking about things like the nuke bailout or certain welfare reforms, but this could be a huge decrease in services for my local area,” Rep. John Hershey, a first-term Republican from Juniata County, told the Capital-Star. “That is a much bigger deal than any of those things we’re discussing across the state.”
The program is typically administered by county governments, according to Brinda Penyak, deputy director of the County Commissioners Association of Pennsylvania. That’s on purpose.
“We know what the terrain looks like and where we need to transport [riders] for service,” she said.
Besides wresting away local control, Richard Farr, executive director of Central Pennsylvania’s rabbitransit — which serves 10 counties and 1.2 million people — said the proposal could increase costs for seniors and people with disabilities who get similar rides under separate state or federal laws.
Farr said rabbittransit’s service area is 5,000 square miles — a little smaller than the European nation of Montenegro. It costs rabbittransit $48 an hour to run a van from, for instance, a remote part of Montour County to a doctor’s office in York.
To keep service costs low, transit authorities have Medical Assistance participants share rides with individuals with disabilities — who get subsidized rides under the federal Americans with Disabilities Act — and the elderly, who get discounted fares with funds from the Pennsylvania Lottery.
If the Medical Assistance program is privatized, Farr said, elderly and disabled riders would either see cost increases, or there could be service cuts to free and subsidized rides that bring sick individuals to critical care. A study of a similar MAT program in Texas found three-fourths of rides were for dialysis, therapy, or specialist visits.
Sally Koczak, deputy secretary of the Office of Medical Assistance Programs in the Department of Human Services, said privatization could result in savings because the providers “have an incentive to operate the program more efficiently.”
For example, since 1983, Philadelphia has been operating under a private broker. The current provider, Logisticare, receives a little less than $6 a month per eligible rider from the state. That averages to $71.28 a year per person.
The program also benefits from the percentage of MAT riders in Philadelphia who use existing public transit. Three in four riders simply grab a bus or subway to get to appointments with fares paid for by the program, according to the Texas A&M study.
Koczak added the broker program would bring the potential for more funds from the federal government, since the feds offer bigger reimbursements for rides in states with brokerage systems.
But miles on the private company’s tires would also mean fewer miles for public transit agencies — and fewer federal transit dollars.
The Pennsylvania Public Transit Association, of which rabbitransit’s Farr is a board member, doesn’t think privatization will save money while maintaining adequate service. Farr pointed to Texas, which instituted a brokered model statewide in 2013 in response to a shoddy record in its own MAT program.
A 2017 report from Texas’ Legislative Budget Board found that contracting with private providers led to increased spending per trip and complaints.
As of 2018, Pennsylvania’s Medical Assistance Transportation costs were the lowest among seven states reviewed by Texas A&M. A 2010 state report found 86 percent of MAT riders said their service was excellent or good.
The language privatizing the free rides, among a number of other changes, was added in the Senate Appropriations Committee through an amendment offered by its chairman, Sen. Pat Browne, R-Lehigh, on June 22, 2018.
The bill passed the Senate unanimously, and the House with just seven dissenting votes.
Gov. Tom Wolf signed the budget that night. The state Human Services department said it needed more time to review the change, but now has no choice but to implement the law as written. The state released a request for proposals from private companies in December 2018.
Browne did not respond to a request for comment.
Lawmakers like Hershey are hoping to delay the program with a bill introduced in both chambers. It asks for the state to study the fiscal and service impact of the brokerage model.
Farr said if the study comes back and “proves we’re wrong, then I guess we’re wrong.” But he felt confident that the bipartisan outrage at least warranted a second look.