Kaiser Daily Health Policy Report Examines State Budget Developments Related to Health Care

Summaries of state budget developments related to health care appear below.

• Florida: Florida's health care industry is concerned that the state Legislature will consider ways to reduce overall Medicaid costs, the Miami Herald reports. Gov. Charlie Crist (R) in his fiscal year 2009 budget recommendation proposed $16.8 billion for Medicaid, compared with $15.4 billion in the current fiscal year. The federal stimulus package will provide the state with $4 billion in Medicaid funds over the next three years, supporting the program "at a time when it was facing big cuts," the Herald reports. However, industry officials noted that the Legislature earlier this year in a special session imposed Medicaid spending cuts for nursing homes and hospitals. The Florida Hospital Association said, "Any reduction (in Medicaid) simply results in a cost shift to businesses and individuals with health insurance coverage" (Dorschner, Miami Herald, 3/2).
  
  
• Georgia: Representatives from the Georgia hospital industry on Wednesday said Medicaid payment changes included in Gov. Sonny Perdue's (R) budget plan released on Tuesday would lead to a reduction in services and even closures, the Atlanta Journal-Constitution reports. The budget, which reflects a $1.6 billion decrease in the state's estimated revenue, would suspend a scheduled Medicaid payment increase to physicians, nursing homes and other medical providers. In addition, hospitals would see a 10% Medicaid payment reduction, which represents about $200 million less in combined state and federal funding. Industry officials said that the state is scheduled to receive $1.73 billion in additional Medicaid funding as part of the federal stimulus package enacted last month (Miller, Atlanta Journal-Constitution, 3/4).
  
  
• Pennsylvania: Democratic and Republican state lawmakers at a budget hearing of the Pennsylvania Senate Appropriations Committee last week expressed concerns about at least $20 million in Medicaid payment cuts to hospitals treating a disproportionate amount of Medicaid beneficiaries and low-income uninsured patients, the Philadelphia Inquirer reports. The cuts, included in Gov. Ed Rendell's (D) proposed $29 billion FY 2009 budget, would reduce payments by about 15% to 120 hospitals. Opponents of the cuts said that the funding is essential for delivering care for low-income residents and people with disabilities because hospitals cannot recoup the cost of treating Medicaid beneficiaries. State Department of Public Welfare Secretary Estelle Richman said she is "very sensitive to the fact that our hospitals are feeling the impact" of the state's budget problems but added, "we are constantly told (the department's) budget it too high and too big. ... We have to make cuts" (Couloumbis, Philadelphia Inquirer, 3/3).