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Medicaid finding hangs in balance

Lawmakers examining proposed cuts

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POSTED: March 27, 2009 9:42 a.m.
Leaner budgets may be headed to hospitals and healthcare providers who service a growing number of Medicaid patients.
There is opposition, as the General Assembly is considering cuts in the program proposed by Gov. Sonny Perdue.
The House voted last week to reverse $81 million in cuts, but it still has to meet Senate approval.
“It would be devastating, devastating to the needy and recipients of Medicaid,” state Rep. Al Williams said if the low-income health program is not properly funded next year.
“We give hundreds of millions of dollars to businesses and take away from the ones who most needed it.”
Medicaid made it possible for more than 4,000 Liberty County residents to receive healthcare in fiscal year 2007, officials estimate.
But it cost Liberty Regional Medical Center a projected $5.4 million in Medicaid and Medicare costs this fiscal year.
The state is set to receive almost $700 million for Medicaid from the federal stimulus.
Perdue fears even that plus what the state budget already set aside for Medicaid won’t be enough to foot the future bill.
His proposal includes dishing out $156 million to cover the costs from anticipated increased program enrollment.
However, the House budget does not account for any more than normal enrollments.
“We think the governor’s forecasts are wrong,” Williams said. “There’s going to be some growth but I think the president’s stimulus plan is going to address Medicaid issues.”
The governor contends he is protecting the system and health care itself.
“If the Medicaid program is not adequately funded on an annual basis, and thus runs out of money prior to the end of the year, the consequences from the medical, moral and political perspective could be devastating,” Perdue wrote in a letter to Lt. Gov. Casey Cagle and Speaker Glenn Richarson.
Timothy Sweeney with the Georgia Budget and Policy Institute said Perdue apparently thinks the economic downturn will have more turning to Medicaid.
“Essentially, they’re taking the chance that growth will not be as significant as the governor is saying,” Sweeney said of the House. “If it is significant, they have to come back, find more money or make more Medicaid cuts at a later time.”
The governor’s solution is to cut the reimbursement rates to hospitals for Medicaid patients.
Hospitals are currently refunded about 84 percent of those costs.
And any additional cuts could strain hospitals and providers, according to Glenn Pearson, the Georgia Hospital Association’s executive vice president.
“We’re already losing 16 percent on all those patients on average and now you want to cut those rates?” Pearson asked. “That would be very, very hard for the providers to absorb… So there’s a pretty strong reaction from physicians and patients.”
The reimbursement rate has not gone up since 2002, even though inflation has bumped up the costs of everything else and “means you’re losing ground.”
Next year, the state will be responsible for only one-fourth of reimbursement rates, instead of one-third.
“The stimulus package incidentally increased the share that Georgia receives [from the federal government],” Sweeney said. “For fiscal year 2010 the federal share will bump up to about 75 percent.”
Under Perdue’s plan, Medicaid would be funded with $687 million coming from the stimulus, not the state allocations.
The state savings would be contributed to other areas in the budget.
“They’re kind of shifting the existing money,” Pearson said. “And the proposal was to put it toward something else.”
Without the cuts, Pearson said hospitals could see the money coming in the next fiscal year, as soon as July 1.
“We’re not celebrating yet,” Pearson said. “It’s very positive that the House has taken this action.”
But it is not a done deal at this point.
The bill moved for Senate committee review and Atlanta lawmakers have until April 3 to balance the budget.
“If we can every get the Republicans to stop beating up on the president’s plan…we might be able to come to some consensus,” Williams said.

 

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