Budget preserves hospitals' Medicaid payments
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Hospitals staved off a proposed $171 million cut in payments they receive from the Medicaid program, but managed care plans weren't so lucky in their bid for more money in the state budget approved this weekend.
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The proposed hospital cut would have reduced by about $78 million the amount the state pays hospitals for training health professionals and providing care to people who either lack health insurance or have low incomes. Medicaid is a public health insurance program run jointly by the state and federal governments, so the cut in funding by Pennsylvania would have reduced by another $93 million the funding by the federal government.
The proposed cut represented a tiny sliver of total revenue for the state's medical centers, but the Hospital & Healthsystem Association of Pennsylvania successfully argued to restore the funds in the budget signed early Sunday morning by Gov. Ed Rendell.
The budget for the fiscal year that began July 1 included a little bit of new money for hospitals as well.
Pennsylvania will provide $5 million to help supplement the revenue of the state's hospital burn units, including those at Mercy Hospital and West Penn Hospital. Paula Bussard, senior vice president for policy and regulatory services at the hospital association, said the money for burn centers was similar to a fund the state created a few years ago to support trauma centers at hospitals.
Dr. Larry M. Jones, the chief of trauma at Mercy, said the supplemental funds were needed because of the expense in treating burn patients, many of whom either lack insurance entirely or don't have coverage to pay all their bills. Hospitals such as Mercy make up the financial difference when patients can't pay, Dr. Jones said, but they can't do so indefinitely.
Health plans that manage care for Medicaid patients weren't as pleased with the final version of the budget, which provides them with a 4 percent increase in payments. Leaders of the health plans had argued that they would have to consider getting out of the Medicaid business if payments weren't further increased.
Mike Blackwood, the chief executive officer of Gateway Health Plan, said it would be several weeks before health plans can make final decisions about continuing to participate in Medicaid. That's because the final budget had a bit of good news, too:It didn't include two proposals that would have caused further financial harm to the health plans, Mr. Blackwood said.
The budget also included $4.4 million to back the governor's Cover All Kids initiative, which aims at providing universal health insurance coverage for children in the state. Kate Philips, spokeswoman for the governor, said legislation must be passed to authorize use of the funds.
First Published July 4, 2006 12:00 am
