Does the Alexander Medicaid report have a $575 million error and misstate what it did?

Gary Alexander. Photo credit: A. Jay Higgins | MPBN

Gary Alexander’s report on Medicaid expansion has been roundly criticized for its omissions and assumptions.

Now an expert on Medicaid has identified what looks like a big calculation error — $575 million.

Moreover, it looks like Alexander wrote one thing about the figure while using another. If so, that is a grave error, for it means the write-up of the report was not honest and transparent. 

Here’s what is being claimed and by whom:

Kathy Gifford, a Medicaid analyst for Indianapolis-based Health Management Associates, reviewed the study by the Alexander Group, part of a $925,000, taxpayer-funded review of Maine’s public welfare system. . .

Gifford said the report has several shortcomings, including a miscalculation that could significantly overstate the cost of the program and expansion. Gifford reviewed the study for AARP, which favors Medicaid expansion.

She said Monday that the Alexander Group apparently used a lower federal reimbursement rate for its calculations than it cited in the text, effectively inflating Maine’s share of the cost. [source]

The difference between the rate Alexander claimed and the one Gifford found he used may sound small. Alexander said he used a reimbursement rate of 61.55 percent but Gifford’s calculation reveals he used a rate of 60 percent.

The thing is, this seemingly small difference between the two rates adds up to a big difference in what Maine would pay.

And, as already noted, using one rate and claiming one’s used another is dishonest. In my world, this sort of thing would cause a paper to be withdrawn and would have significant consequences for the person who prepared the report and released it to the public.

We recently learned that Alexander’s report wasn’t an independent product submitted to the state. Rather, it underwent multiple revisions by staff in Maine’s Department of Health and Human Services.

We already knew many assumptions were flawed. Also, by leaving out economic impacts and federal payments for programs the state now pays, it overstated costs of expansion and understated the revenues and job gains for the state.

If we assess this report by normal standards — how well it evaluates the likely impacts of a proposed program — this report is highly flawed. And if this error exists and Alexander stated one percentage was used but used another, the report should be withdrawn.

Amy Fried

About Amy Fried

Amy Fried loves Maine's sense of community and the wonderful mix of culture and outdoor recreation. She loves politics in three ways: as an analytical political scientist, a devoted political junkie and a citizen who believes politics matters for people's lives. Fried is Professor of Political Science at the University of Maine. Her views do not reflect those of her employer or any group to which she belongs.