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State Senate Subcommittee Working on Fiscal Year 2010 Medicaid Budget: “Don’t Be Penny-wise and Pound-foolish”
The state Senate Subcommittee on the MDCH, chaired by Sen. Roger Kahn, MD (R-Saginaw), is continuing its work on the fiscal year (FY) 2010 MDCH budget. The subcommittee is expected to vote on the MDCH budget in early June and then send it to the full Senate Appropriations Committee for consideration.
Tough Decisions Ahead
On Friday (May 15), economists from the Michigan Department of Treasury, the Senate Fiscal Agency and the House Fiscal Agency will present the revenue forecasts for FYs 2009 and 2010 based on state economic conditions.
Lawmakers recently
addressed a $1.3 billion deficit for the current fiscal year (2009) by cutting more than $349 million in general funds and using federal stimulus money to fill the remaining gap. But state revenues continue to plummet; therefore, a projected FY 2010 deficit will be announced later this week.
The Senate Appropriations Subcommittee on the MDCH will use the new revenue estimate, rather than the House-passed Medicaid budget recommendations, as a foundation to craft its FY 2010 Medicaid budget recommendations.
Realizing that the state fiscal crisis is intensifying, the challenge escalates for the hospital community and other Medicaid providers to protect current health care funding and to urge lawmakers
not to cut Medicaid programs that qualify for federal matching funds.
MHA Budget Priorities
The MHA is urging members of the Senate subcommittee and leadership to adopt the following association budget priorities in FY 2010:
- Restore the 4 percent executive order rate cut to hospitals, effective July 1, 2009. By doing so, vital federal funding will be returned to Michigan.
- Limit the state’s retention of funds from the hospital Quality Assurance Assessment Program (QAAP) to FY 2008 levels.
- Spend a portion of the remaining federal stimulus funds on health care programs.
For hospitals, a 4 percent cut to inpatient and outpatient rates for July 1 through Sept. 30, 2009, represents a $14 million reduction when lost federal matching funds are included ($4.3 million in general funds and $9.7 million in federal matching funds). If this cut were annualized in the FY 2010 Medicaid budget,
it would total $56 million (estimated to be $15 million in general funds and $41 million in federal matching funds).
Because of hospital fee-for-service and health maintenance organizations rate cuts and the enhancement in the federal matching rate, the MHA is asking the Senate subcommittee and leadership to control the state’s retention of funds from the hospital QAAP.
Call to Action
MHA members are strongly encouraged to
contact members of the Senate Appropriations Subcommittee on the MDCH, Senate Appropriations Chair Ron Jelinek and Senate Majority Leader Mike Bishop to underscore:
- Michigan’s health care delivery system is in crisis.
- For every $1 Michigan spends on Medicaid, the federal government sends an additional $2.33 to the state. So for every $1 the Legislature cuts from Medicaid, Michigan patients and providers lose $3.33 in essential health care funding.
- Health care services for patients seeking treatment in Michigan hospitals will be at risk, more hospitals will be unable to cover the cost of patient care, and thousands of health care jobs will be threatened if additional Medicaid funding cuts occur and subsequent federal funding is abandoned.
The following tools will assist you in contacting Senate subcommittee members and leadership:
If you have any questions regarding the state budget, please contact
David Finkbeiner at the MHA.
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