Senate votes to create new state agency to oversee Medicaid

The unexpected half-a-billion dollar bill that landed on lawmakers’ desks in November has inspired some senators to take a big step to stop it from happening again.

Sen. Ryan McDougle, R-Hanover, submitted legislation this year that would create a brand new state agency with the sole responsibility of overseeing the expenditures and forecasting of the state’s Medicaid program, which is run by the Department of Medical Assistance Services.

On Tuesday the bill squeezed through the Senate on a 22-18 vote and heads to the House of Delegates.

“This does not create new positions, this takes positions out of one agency, puts them in a new agency where they will be independent,” McDougle said on the Senate floor, adding that the agency will be required to report its findings and trends to the legislature and the public.

He noted that responsibility for the $462.5 million Medicaid shortfall — related to forecasting and not Medicaid expansion — does not rest with the current DMAS staff.

“The individuals currently in the department now are taking some tremendous steps forward,” he said. “But to ensure that systemically we don’t have this situation again we need to make sure we have an independent agency that is consistent and reliable.”

Sen. J. Chapman Petersen, D-Fairfax City, asked McDougle some pointed questions, including if McDougle is “a believer in small government?” and “Would you agree the growth of government is a problem?”

“I didn’t meant to tease my fellow member of the 2001 class in the House of Delegates,” Petersen said, adding that he acknowledges there were mistakes in the Medicaid forecast but questioning if a new agency is the solution.

“Is this how we solve problems, we create more state agencies? Or do we more efficiently utilize our existing agencies? I think we more efficiently utilize our existing agencies.”

Sen. William DeSteph, R-Virginia Beach, came to McDougle’s defense.

“This is what happens when you underestimate actuarial liabilities to overestimate savings,” he said. “When you mislead individuals, you have to have oversight, and I support this bill.”