Ken Block has done Rhode Island a big favor in looking into our Medicaid program for waste and abuse. Better still, he has done it for free, which is amazing when you think about it. The state usually pays hired consultants big bucks to do similar things. Protecting the taxpayers’ considerable investment in the safety net programs that are associated with Medicaid for the working poor and indigent is very important in its own right.

But the Ocean State has an even bigger responsibility to manage the programs properly: under the five-year “global waiver” granted to Rhode Island by the federal government during the Carcieri administration, the first of its kind in the nation, our state was given a pretty free hand to administer the federal-state Medicaid program as we saw best, with an aim to reduce costs and render services differently and better for Medicaid recipients.

Our experiment in managing Medicaid is being looked at closely by other states because Medicaid costs are soaring and the new federal health care law, the Affordable Care Act, set to commence in full form next year, will swell Medicaid numbers – and hence spending by both the federal and state governments – enormously as one of the principal means of bringing more of the uninsured in from the cold of having little or no health care coverage.

Since 2009, when Rhode Island was granted the waiver, we have largely succeeded in spending in smarter ways to reduce costs while getting more and achieving better outcomes. Rhode Island has streamlined programs, shifted care from nursing homes to home living, authorized family members to become paid caregivers so loved ones can remain at home, and saved money under the terms of the agreement, which awarded Rhode Island $12.1 billion from the federal government for the state to manage the program on its own through 2013.

State officials are currently looking at ways to improve the program even further as they look to renew the waiver. And they are preparing for the next phase to occur, as the Affordable Care Act goes into effect. Under the ACA, Medicaid will undergo a huge expansion as it becomes the health plan of default for many of the uninsured.

Rhode Island’s Medicaid recipient total is about 175,000 individuals, but almost 300,000 receive some form of Medicaid-related services, which include everything from nursing home and home health care, health care coverage through the Neighborhood Health Plan of RI, hospitalization and dental coverage. Food stamps, bus passes and even winter heating assistance are available through related programs. With the ACA in place, membership in Medicaid here in Rhode Island is expected to grow by 20,000 individuals a year, up to 80,000 new members by 2018.

Paying for that is going to require even more due diligence in running operations and providing services efficiently and with a minimal amount of waste and abuse, because while the feds pay most of the expansion costs for the first few years, as time goes on the federal portion lessens and the states’ share increases. That is why many states have real concerns about the costs of the Medicaid expansion and some states are even refusing to comply in setting up the online exchanges that get things going. The exchanges are essential building blocks in the new system. Complicating matters, the Supreme Court decision of last year, while upholding the law, granted to the states the right to ultimately decide on participation in the Medicaid expansion.

Covering the working poor and the disabled under Medicaid is the right move because Medicaid is a longstanding program that states, which share ownership and administration of it with Washington, are well versed in. Rhode Island is in a unique position with the global waiver because we are experimenting with how to run the program more efficiently and successfully for all concerned. Our experience will provide a critical template for ourselves and other states as Medicaid expands under the ACA. How the money is spent – and how it can be wasted – is key to getting it right.