Democracy is a charming form of government, full of variety and disorder; and dispensing a sort of equality to equals and unequals alike.” — Plato
Budget Ax Falls as Malloy Administration Seeks to Eradicate 2015 Deficit
The Malloy administration Thursday fired a pre-emptive strike to eradicate a persistent 2015 FY deficit of $59 million– action that surely presages what we can expect in his upcoming two-year budget proposal covering 2016-17. This deficit can be traced largely to cost overruns in certain agencies and less-than-robust revenues.
In a memo released Thursday, Office of Policy and Management OPM Secretary Ben Barnes directed all state agency heads to review planned spending “in order to eliminate, minimize or delay those expenditures that are not absolutely critical….efforts should include potential savings in all areas of spending, including hiring and overtime, contractual services and purchased commodities.”
The Governor has the authority to make 5-percent across-the-board spending cuts without legislative approval. The agencies’ detailed cuts are forthcoming.
Additionally, the administration has called for a hiring freeze for all full-time, part-time, durational and temporary positions, except for those deemed “critical.”
Finally, OPM, at the Governor’s request, has directed state agencies from entering into new personal service agreements with contractors, unless they are necessary “to continues essential state agency operations.”
In the face of previous fiscal year deficits, the Governor has employed these management tools to various degrees, the question that is lingering is how deep and where will he propose reductions to wrestle with the monstrous deficits anticipated in 2016 and 2017. For this Herculean task, he will need the Legislature’s help.
PURA Finalizes Regs Governing Notice, Disclosure of Electricity Rates and Terms
The Public Utilities Regulatory Authority has issued final rules that require electricity suppliers to disclose residential rates and terms up front and in writing, and to notify customers before their rates change. The regulations grew out of legislation passed last year.
Pop the Prosecco: Administration Touts Completion of First Project under LOTCIP
In an effort to bypass federal red tape and get funding quickly to towns and cities for state and local transportation improvement projects, in 2013 the Legislature committed $45 million a year to create and fund the Local Transportation Capital Improvement Program or LOTCIP.
This week, the state Department of Transportation (DOT) announced completion of the first project – paving of a mile-long stretch of roadway in Windsor – to be financed under LOTCIP.
Here’s roughly how it works, according to DOT: towns or cities design projects on their own with little or no CTDOT involvement. When the project is ready to go out to bid, the municipalities then present their plans – through their respective Regional Planning Organization – to CTDOT for review. Once plans are approved and bids have come in, the state DOT distributes the required money for construction to the municipalities so they work can begin. Finally, the state DOT seeks reimbursement from the federal government.
While paving a mile of roadway may not seem like much, in the scheme of things, since LOTCIP was launched it has funded about 40 projects in 37 cities and towns, totaling about $63 million and creating nearly 1,000 construction-related jobs. Looks like we can anticipate more announcements down the road.
Hospitals Prepare for January 1st Launch of Medicaid State Payment System that Rewards Quality over Quantity and Factors in Severity of Illness
Acting on a legislative mandate from 2013, the Department of Social Services (DSS) is set to roll out a “patient-centered” revenue-neutral hospital payment system January 1, 2015 that better reflects actual costs. The overhauled payment system is designed to more accurately match Medicaid reimbursement rates with the patient’s severity of illness and cost of treatment (i.e. higher acuity results in a higher payment). It is based on Medicare reimbursement policies and procedures.
Under the new system, hospital rates will be updated every one to two years. Currently, hospitals are paid a hospital-specific, interim per-diem rate that does not account for diagnosis or length of stay. With some exceptions, overpayments and underpayments are then reconciled after year’s end.
Hospital-based physicians and behavioral health services are not included in the new payment methodology.
State Exchange Hires Maine Vendor to Administer Healthcare Database
Access Health Connecticut, the state’s healthcare exchange, announced this week that it has inked a five-year, $6.9 million contract with Maine-based Onpoint Health Data to build, host and administer the system that will analyze insurance claims for user and cost trends. The claims data ultimately will be available to researchers after being scrubbed of personal information. The second open enrollment for the Exchange begins Monday.