Kaiser Daily Health Policy Report Highlights Budget Issues in Four States

Summaries of developments related to budgetary issues in Florida, Maine, Maryland and New York appear below.

• Florida: The Florida Senate on Thursday approved about $500 million in cuts to the state's $70 billion fiscal year 2009 budget, including reductions in Medicaid funding, the South Florida Sun-Sentinel reports (Kennedy, South Florida Sun-Sentinel, 3/7). The Senate voted 27-13 to approve legislation (SB 1852) that would eliminate automatic cost-of-living increases in payments to hospitals, nursing homes, county health departments and intermediate care facilities for the developmentally disabled (Liberto, St. Petersburg Times, 3/7). The rate cut will reduce payments to all Medicaid providers by $316 million (South Florida Sun-Sentinel, 3/7). According to the St. Petersburg Times, the plan to cut payment increases "is causing broad concern" because it might discourage some institutions from accepting Medicaid beneficiaries and because it might diminish care for beneficiaries. Senate Budget Chief Lisa Carlton (R) said the elimination is "probably something we should have looked at a while ago" because the policy favors a particular segment of health care. For example, physicians do not receive automatic payment increases, the Times reports. The state faces $2.5 billion in spending reductions for FY 2009 (St. Petersburg Times, 3/7).
  
  
• Maine: Gov. John Baldacci (D) on Wednesday proposed a FY 2009 state budget that would reduce funding for the state Department of Health and Human Services and charge some Medicaid beneficiaries fees, the Portland Press Herald reports. The state is facing a $190 million budget shortfall. The state HHS and Education departments would lose a combined $61.6 million under the proposed budget. Baldacci's plan also would require Medicaid beneficiaries with incomes between 150% and 200% of the federal poverty level to pay a $25 annual fee. The fee would affect 5,600 of the state's 267,000 Medicaid beneficiaries. In addition, the proposal would increase funding for Medicaid by $8.4 million to compensate for the loss of federal funds. The budget proposal also would eliminate Medicaid prescription drug coverage for childless adults (Carrier, Portland Press Herald, 3/6).
  
  
• Maryland: The state Senate this week gave preliminary approval to about $280 million in budget cuts to help offset an expected $330 million drop in state revenue, the Baltimore Sun reports. Cuts include $18 million from stem cell research, $20 million from malpractice insurance subsidies and $40 million from Medicaid. According to legislative analysts, some state Department of Health and Mental Hygiene reimbursements will cost less than budgeted. In addition, state senators are considering reducing subsidies to small businesses to offset employee health costs (Olson, Baltimore Sun, 3/7). The plan also calls for a $3 million cut from MedEvac helicopters (Baltimore Sun graphic, 3/7).
  
  
• New York: Under Gov. Eliot Spitzer's (D) proposed budget for FY 2009, Medicaid payments would increase for outpatient care and decrease for inpatient care, the Rochester Democrat and Chronicle reports. New York Medicaid has a $47 billion annual budget -- the largest in the country -- and pays for one-third of health care in the state. According to state Health Commissioner Richard Daines, Medicaid payments for hospitals currently are 120% of actual inpatient costs, compared with 44% of actual outpatient costs. If Spitzer's plan is approved, a physician would be paid $55 next year for a basic new patient visit and $74 the following year, up from the current payment of $31. In the fourth year, payments would increase by 75% over current rates. Physicians practicing in underserved areas or who see beneficiaries in the evening and on weekends would receive higher payments (Swigle, Rochester Democrat and Chronicle, 3/7).