Despite a dramatic and coordinated outpouring of opposition from the hospital community, Gov. Granholm signed the Michigan Department of Community Health fiscal year (FY) 2010 budget that included an 8 percent Medicaid rate cut to all providers, which would have reduced hospital payments by $135 million annually ($36 million in general fund and $99 million in lost federal matching dollars).

While reimbursement cuts were not the outcome the association advocated for, the MHA was successful in reaching an agreement with state budget officials to mitigate the 8 percent funding reduction to Michigan hospitals. In November, state budget officials accepted an MHA alternative to increase the hospital quality assurance assessment program (QAAP) tax by $36 million — the amount necessary to replace the hospital-related general fund reduction — to maintain current hospital rates without losing federal matching funds.

For the past eight years, the MHA has worked collaboratively with state legislative leadership to design a budget that allows the state to fund the escalating Medicaid caseload, maintain traditional benefits for all covered populations and avoid hospital rate cuts. This has been achieved through an active partnership between Michigan hospitals and the state of Michigan, resulting in the ongoing development of the hospital QAAP.

However, it is truly unfortunate that lawmakers and the governor cut Medicaid payments to hospitals, physicians, nursing homes and mental health providers at a time when more Michigan children, elderly and disabled citizens have no other dependable access to nonemergency medical care.

Throughout the budget battle, the MHA maintained an aggressive traditional grassroots campaign through Hospitals-ACT Action Alerts, earned media interviews, and mobile billboards in front of the state Capitol, as well as a paid media campaign through targeted newspapers and radio stations. Additionally, the MHA initiated a social media campaign (Facebook, Twitter, Wordpress blogs and YouTube) to bolster the efforts of the association’s traditional advocacy tools.

On behalf of the MHA Board of Trustees and every member hospital, thank you for your advocacy efforts through Hospitals-ACT. Your sustained urging of our elected officials to support Michigan hospitals during this very challenging budget year is greatly appreciated.

With that said, the state Legislature and Gov. Granholm will soon start working on the FY 2011 state budget. Our united advocacy efforts will be needed more than ever as the state will be confronting another structural budget deficit, and additional increases in the hospital QAAP may be not be available to mitigate any potential funding reductions in the coming year.

Before the end of 2009, members of the hospital community are encouraged to contact their state lawmakers to express grave disappointment in the FY 2010 budget solution that cut Medicaid reimbursement to hospitals, physicians, nursing homes and mental health providers by 8 percent, driving patients and providers into a deeper crisis.