July 29, 2005

Patients and providers will suffer from Medicaid cuts

By Rep. Quincy Murphy

Deeper cuts in Medicaid funding, if Gov. Sonny Perdue has his way, would be devastating not only for Georgians who depend on health care assistance, but also for the state’s health care providers, especially rural hospitals.

The Department of Community Health has been ordered by the Governor’s Office of Planning and Budget to reduce its Medicaid funding request by $200 million for fiscal year 2007. By doing so, the state would also suffer a $300 million reduction in federal matching funds, for a total of $500 million in cuts. Final Medicaid program growth estimates could push the loss even further.

Another $146 million in federal funds stands to be lost during the current fiscal year because the DCH has agreed to stop using an upper payment limit accounting system that had enabled the state to draw down an extra $300 million for Medicaid in each of the past two years.

Georgians who cannot afford health care receive health insurance coverage through Medicaid. The rising cost of health care and an increased demand for services have placed the program in economic peril even before these budget cuts.

Medicaid reimburses hospitals, nursing homes, pharmacies and other providers for the services they render. Uninsured patients will always be there. With an obligation to care for the sick in their community, but with reduced reimbursement dollars, our health care providers are faced with difficult decisions.

For some rural hospitals, the choices are not good and include, unfortunately, shutting their doors. Even larger regional facilities like we have here in Augusta would feel the impact of massive cuts to Medicaid.

It will be difficult to defeat this proposal. But these cuts seem hard to justify in light of the rosy economic picture painted at the close of the state’s 2005 fiscal year June 30.

State tax revenues grew by $1.1 billion during the past year, the strongest growth in four years. What, then, is the need for imposing a possible financial calamity on our rural hospitals?

Gov. Perdue appears determined to “fix” Medicaid any way he can, including his plan to implement a private, HMO-like Medicaid system which has been a total disaster in other states. That kind of thinking sounds like it would come from Washington, D.C., instead of Georgia.

Speaking of Washington, a new commission was appointed earlier in the month to come up with recommendations to achieve $10 billion in Medicaid cuts at the federal level. The chairman of this commission is a former Tennessee governor who oversaw that state’s failed Medicaid cutback program.

Between now and the 2006 session, legislators will have the opportunity to look at the Medicaid situation from all angles. I am committed to fighting against sentiment that is driving these devastating budget cuts.

By cutting this funding, the state is not only punishing low-income and disabled patients. It is also threatening the viability of the hospitals and nursing homes, which are meeting the health care needs of all Georgians, not to mention providing some of the largest job numbers in many communities.