Medicaid cuts to be felt by providers, say govs

U.S. states facing reduced federal Medicaid funding will make further cuts in fees to medical providers in the program, organizations of governors and budget officials said.
Lowering payments to physicians, hospitals and other sources of health care, the most common means of scaling back Medicaid spending for the past two years, will be used again in fiscal 2012, according to a survey of state officials by the National Governors Association and National Association of State Budget Officers.
When the last of about $103 billion in extra federal funding for Medicaid, the health care program for low-income people, expires on June 30, governors will target provider fees to balance Medicaid budgets rather than cut benefits or raise taxes, Ray Scheppach, executive director of the Washington-based National Governors Association, said in a news conference last week.
“A lot of budget directors are saying 2012 may be the worst year yet” because tax revenue won’t rise to meet the spending required to maintain Medicaid and other state programs such as education, Scheppach said.
The economic stimulus bill of 2009 included $86.6 billion in temporary federal assistance for Medicaid. President Barack Obama signed a bill in August giving states $16 billion more Medicaid funding through June 2011. Governors won’t seek an extension, Scheppach said.
In the current fiscal year, 37 states planned payment cuts following similar actions taken by 39 states in the prior 12 months, according to the report, citing a September survey by the nonprofit Kaiser Family Foundation. States’ Medicaid spending reached $354 billion in fiscal 2010, or 21.8 percent of total expenditures, making it the single largest component of their combined budgets, the report found. &#8226