Many financially strapped states are doing more than cosmetic surgery to their health agency budgets.

Georgia and its Department of Community Health aren’t immune from the painful cuts.

When the state’s main health agency presented its fiscal 2012 budget numbers to a legislative panel Thursday, most of the proposed spending reductions went unchallenged by the lawmakers. Included in the financial blueprint is a 1 percent pay cut to doctors, dentists, and nursing homes serving Medicaid and PeachCare patients.

Some cuts in Gov. Nathan Deal’s budget, though, drew sharp questions from members of the House Appropriations Health Subcommittee.

Lawmakers focused on the proposed elimination of dental, podiatry and vision benefits for adults on Medicaid, the program covering the poor and disabled. The state will save about $7 million by eliminating the benefits.

Removing the dental benefit will cause problems in care, said Rep. Carolyn Hugley (D-Columbus).

Currently Medicaid pays only for emergency dental care for adults. When that coverage goes away, she said, “These people won’t disappear. They’ll end up in other places.’’

State officials acknowledged that if patients go to emergency rooms seeking a tooth extraction, Medicaid would not pay the hospital nor the physician who provides the service.

The state was left with tough choices on making reductions, said Jerry Dubberly, the state Medicaid director.

Another question centered on the elimination of some public health lab tests, including for HIV. State officials said consumers can go to private labs for such tests.

Community Health Commissioner David Cook expressed concern that the state employee health benefits plan — covering more than 600,000 people — has reserves of just $17 million. That’s enough to pay only two to four days of claims, he said. “Most private companies have a month to six weeks’’ of reserves, he said.

About 90 percent of State Health Benefit Plan members are covered by UnitedHealthcare, while 10 percent are with Cigna, DCH officials said. Rep. Pat Gardner (D-Atlanta) questioned the amount of insurer competition in the plan after Kaiser Permanente was removed as an employee choice.

Cook also told the panel that his agency ‘’is taking a global look’’ at the performance of the managed-care companies that oversee services to more than 1 million Georgians in Medicaid and PeachCare. “We’re going to [review] the whole system,’’ he said.

Currently, the state pays three companies a total of more than $2 billion a year. The contract is up next year, but Cook said Georgia may seek a one-year extension while it studies the care management organization (CMO) program.

Tim Sweeney of the Georgia Budget and Policy Institute said in an interview that reviewing the CMOs is a good idea. “I think that the idea makes sense if they want to look at different Medicaid delivery systems, ‘’ said Sweeney, senior health care analyst at GBPI, a research and education organization.

DCH officials also told the panel that there are 893 patients on the waiting list for the Georgia’s AIDS Drug Assistance Program, which is jointly funded by the state and federal governments and currently serves more than 4,000 people.
Jeff Graham of Georgia Equality, a consumer advocacy group, said in an interview that the waiting list ‘’means that folks don’t have guaranteed access to lifesaving medication.’’

State funding for the drug assistance program has stayed flat for several years, Graham said. Last year, though, there was a 17 percent increase in the number of people enrolling in the program, he said.

Earlier, Karen Minyard, the Georgia Health Policy Center’s executive director, said the state will face an estimated shortage of about 700 primary care medical providers when health reform expands coverage to hundreds of thousands of Georgians, beginning in 2014. Georgia currently has a shortage of 350 primary care doctors, Minyard said.