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Thursday, June 21, 2001

Hospitals won't get Medicaid raise


Rate freeze would block shortfall

By Charles Wolfe
The Associated Press

        FRANKFORT — Some Medicaid providers, primarily hospitals, will not receive a rate increase that ordinarily would take place July 1, state officials said Wednesday.

        A rate freeze is part of a stopgap plan to head off a projected $280 million shortfall next fiscal year in Medicaid, the state-federal health insurance program for the poor and disabled.

        Kathy Kustra, special Medicaid adviser to Gov. Paul Patton, announced the planned rate freeze to members of the House Health and Welfare Committee.

        Hospitals are among health-care providers that usually get an increase in reimbursement rates on July 1, the beginning of the state's fiscal year. Increases vary, but most are to cover inflation.

        Ms. Kustra said the freeze would save about $20 million in a Medicaid budget that tops $3 billion per year. Of that, about $1 billion is state money.

        Ms. Kustra agreed it was a fraction of overall costs. But “while we're trying to decide what we're doing in the big picture, we sure as heck don't need to be adding any fuel to the fire,” she said.

        In addition, the administration is cutting out $3.9 million a year in efficiency “incentive payments” to health clinics. The payments are on top of cost reimbursements. “We don't think, at this time of budget cuts, we can afford to be paying anybody above 100 percent of costs,” Ms. Kustra said.

        Others caught in the freeze include home health agencies, local health departments and psychiatric hospitals, according to a list from the Cabinet for Health Services.

        Nursing homes, psychiatric residential treatment facilities, nursing-home beds in hospitals and comprehensive-care agencies would be exempted.

        Some other provider groups — primary-care physicians, pharmacists, chiropractors and dentists among them — are not affected because they don't get annual raises, anyway, according to the cabinet.

        Interim Health Services Secretary Marcia R. Morgan told legislators the Medicaid program will be in balance when the fiscal year ends June 30.

        A rate freeze is the administration's second major step in three weeks to rein in costs.

        On May 31, Gov. Patton ordered a moratorium on applications for an array of health-care projects and services.

        Most projects, such as construction and expansion of hospitals and nursing homes or purchases of expensive equipment, require state approval.

       



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