Proposed cuts in state funding for hospitals will be mostly avoided for now if the Appropriations Committee and Legislature accept recommendations from a subcommittee which has been working on the issue since last week.
The subcommittee, made up of members of the appropriations and education committees, on Wednesday proposed pushing a payment due to hospitals from June to July and softening a reduction of funding for hospitals that employ physicians.
The proposals, which are part of a budget package inked by Gov. John Baldacci in response to falling revenues, would have cost Maine hospitals a combined $13 million in state and federal funding between now and June 30.
One proposal would have affected critical access hospitals, which are facilities with fewer than 25 beds, by reducing Medicare funding from 117 percent to 101 percent of the hospital’s overall cost. The 117 percent rate was designed to counteract a tax imposed on hospitals by the state that attracted more federal dollars. Baldacci’s plan to change the rate was rejected by the subcommittee.
The other proposal in question would have reduced payments to hospitals that employ doctors from 89.7 percent of their costs to 57 percent. The hospital subcommittee recommended on Wednesday the rate be set at 70 percent, effective Feb. 1.
“I’m obviously extremely pleased that they have rejected the cuts to critical hospitals,” said Mary Mahew, spokeswoman for the Maine Hospital Association. “We are still extremely concerned about the impact of the cut to hospital-based physicians. It will still likely be a $16 million annualized cut to hospital-based physicians at a time when we are trying to emphasize primary care and access.”
Other proposals for hospital funding cuts have the potential to arise as the Legislature turns to the biennial budget, which covers spending from July 1 through June 30, 2011.
Baldacci’s proposals regarding hospital funding in the current year are also part of his plan for the next two years. Several lawmakers, particularly on the Health and Human Services Committee, have agreed that those cuts would result in too many Mainers losing access to healthcare.
To deal with the issue in the long term, the hospital subcommittee made three proposals: The creation of a Healthcare Reform Task Force to develop a plan to deliver healthcare in the most efficient and cost-effective manner; the equalization of funding for non hospital-based physicians and hospital-based physicians, effective in July; and, the establishment of an agreement that if the federal economic stimulus package under debate in Washington brings more than $98.8 million to Maine, that 60 percent of the additional funds be used to reimburse hospitals for MaineCare payments the state has owed them since 2005.
Mahew estimates the state is more than $400 million behind on those payments. The $98.8 million figure refers to a placeholder in the biennial budget in expectation of the stimulus package.
“I’m happy that there is greater acknowledgement that these MaineCare bills need to be paid to hospitals,” Mahew said. “I am not sure at the end of the day whether that language will result in hospitals actually being paid.”
The Appropriations Committee aims to finish its work on the supplemental budget – including scrutinizing the hospital subcommittee’s recommendations – by the end of the week.
The committee appeared close to addressing the recommendations on Friday morning, but Rep. Sawin Millett (R-Waterford) asked for more time to study the package before voting on it.
(Statehouse News Service)