Health agency budgets facing cuts in coming year

Print Friendly and PDF By: Andy Miller Published: Jul 31, 2012
Photo of the Georgia Capitol Building

State lawmakers will take up proposed spending cuts in the legislative session beginning in January.

This year, Georgia’s three main health agencies largely escaped the state budget knife. They may not be so fortunate in 2013.

Gov. Nathan Deal’s Office of Planning and Budget (OPB) has ordered state agencies to prepare a budget that will have a 3 percent reduction in spending for both the current fiscal year’s amended budget and the fiscal 2014 blueprint. (Funding for schools apparently is exempted from the cuts.)

The OPB also said that the Medicaid program is in line for an additional 2 percent cut in fiscal 2014, for a total of 5 percent.

Budgets can change dramatically before final legislative approval next year, with proposed cuts being lessened or dropped entirely while new ones are implemented.

Still, word of the Medicaid reductions spread fast in the health care industry and consumer advocacy communities. With an already lean budget, the state agency in charge of Medicaid may have to look at the possibility of cutting payments to medical providers. That’s always dicey, because lower payments can drive some doctors to stop treating Medicaid patients.

Tom Kornegay, a spokesman for the Medical Association of Georgia, said this week that “any action that results in any reduction in pay for Medicaid physicians in Georgia would have disastrous results for the state’s neediest patients.

“Medicaid physicians in Georgia are already paid at a rate that is less than the cost of delivering services, which is why it’s not surprising that the number of Medicaid physicians in the state has declined by more than 15 percent in the past five years,’’ Kornegay said.

From redesign to expansion

The Department of Community Health, the state’s Medicaid agency, said Tuesday that cutting benefits is “a potential option, but no decisions have been made.”

“DCH will look at numerous ways to reduce costs through efficiencies and other program improvements,” the agency said in a statement. “Our goal is to meet the budget requirements while still providing access to affordable, quality health care.”

Medicaid, always an important health care program, has taken center stage this year in the debate over the cost of health care, in Georgia and nationally.

Much of the year, state officials, industry representatives and consumer advocates focused on a proposed “redesign’’ of the program, which along with PeachCare covers 1.7 million Georgians.

But the U.S. Supreme Court ruling on the health reform law, announced last month, gave states more flexibility on the law’s Medicaid expansion, which would add more than 600,000 low-income residents to the rolls. Some states have indicated they won’t go through with such an expansion, and Georgia is in the process of deciding whether to do so.

With such a big decision to make, and with political repeal of the health care law still a possibility at the national level, the state has set aside the proposed restructuring of the program.

Also this year has come much talk about the renewal of the hospital provider tax, which expires next year and is apparently a target of the anti-tax Tea Party movement. The tax brought in an added $590 million in federal funds for Georgia Medicaid in fiscal 2011.

Recently, more bad financial news arrived with the Department of Community Health’s projection that the General Assembly and the governor will have to fill a $300 million shortfall in the Medicaid and PeachCare budget this fiscal year.

And now, possible budget cuts have sent shock waves through the state’s health care world, both from patient advocates and organizations delivering care to these patients.

Pat Nobbie of the Georgia Council on Developmental Disabilities said she wonders how the state, with a 5 percent Medicaid cut, can still support its highly acclaimed agreement with the U.S. Department of Justice on revamping Georgia’s mental health and developmental disabilities system and helping the thousands of people move off a waiting list for community services.

“The cost of unmet health care and support needs of people will pop out somewhere, in emergency rooms or when their untreated health situation becomes more serious and expensive,’’ Nobbie said.

 

Other states cutting Medicaid

Kaiser Health News recently reported that 13 states are moving to cut Medicaid by reducing benefits, paying health providers less or tightening eligibility, even as the federal government prepares to expand the insurance program for the poor to as many as 17 million more people.

States routinely make cuts to Medicaid as tough times drive up enrollment and costs.

“With more people on Medicaid, states will have to continue to ratchet down payments and limit services,’’ Nina Owcharenko, director of the center for health policy studies at the conservative Heritage Foundation, told Kaiser Health News.

Jon Howell, president of the Georgia Health Care Association, which represents the nursing home industry, said his organization “will work with [state officials] to meet these objectives without applying draconian cuts to providers.’’

Georgia’s Department of Public Health experienced no major cuts last year. But a spokesman, Ryan Deal, said the agency is looking at 3 percent cut coming up, just like for other agencies.

“The department will begin a series of discussions involving DPH leadership and our important district health directors in each of the 18 public health districts to determine how the impact will be felt and how we can best mitigate that impact,’’ he said.

The Department of Behavioral Health and Developmental Disabilities declined comment, citing its upcoming transition of commissioners.

Biggest impact may be on children

Medicaid cuts could ultimately hit children the hardest. Kids represent the majority of members in Medicaid, and all members in PeachCare.

“Access to care remains a problem for children in Medicaid and Peachcare in many areas of the state. [Doctors’] practices which provide care to these children face difficult choices, even now, in continuing to see them,’’ said Dr. Robert Wiskind, president of the Georgia chapter of the American Academy of Pediatrics. “We’ll work with the department to ensure that pediatricians and pediatric specialists continue to be available to care for the Georgia children who need them.”

And Dante McKay of the advocacy group Voices for Georgia’s Children noted that the state received a $4.9 million federal bonus for streamlining its Medicaid and PeachCare enrollment process last year. The state may get another bonus this year, McKay said.

“We sincerely hope that these bonuses, combined with any administrative savings realized as a part of the Department of Community Health’s redesign of Medicaid, and the migration of children from the State Health Benefit Plan to PeachCare, will be enough to offset these significant cuts,’’ he said.

 

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