Dan Genz, The Examiner
2008-02-15 08:00:00.0
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WASHINGTON -

Virginia hospitals and nursing homes are urging lawmakers to fight a proposed $76 million cut in Medicaid payments Gov. Tim Kaine recommends to help fight the state’s $1.4 billion shortfall.

Because the federal government matches every dollar the state spends on Medicaid, the federal insurance program for the poor, health care industry leaders say the cuts would amount to a loss of $152 million over two years.

“It is a severe and, we believe, unnecessary cut … We’re fighting it as hard as we can,” said Stephen Morrisette, president of the Virginia Health Care Association. “Virginia nursing facilities are already losing money on Medicaid residents of about $5 a day. If this goes through, we’d be losing about $13.81 a day.”

Lt. Gov. Bill Bolling criticized the cuts in a speech before the Virginia Hospital and Healthcare Association on Thursday. “Hospitals and nursing homes are losing money on Medicaid patients now, and those losses will mount if these reductions are approved,” Bolling said.

The proposal eliminates the annual inflation adjustment for health care facilities in the fiscal 2009 budget, to cut almost $50.8 million in hospital reimbursements and $25.2 million in nursing home payments.

“The inflation adjustment is something historically most years we’ve done, and because times are tough, we’re not going to do it,” Kaine spokesman Gordon Hickey said. “All he’s done is say there is a forecast of the shortfall, and made a list of reasonable and sober reductions that take care of it and do the least amount of damage.”

The measure is one of many, including 3 percent cuts to state agencies and 5.4 percent cuts in local government aid, that are designed to save $582 million through the 2010 fiscal year.

Hospitals and nursing homes say they are willing to take some hits if the depth of Virginia’s deficit requires some Medicaid cuts but are asking lawmakers to also consider cutting spending in other ways by limiting Medicaid eligibility and cutting some health care services.

“What we are asking the members of the General Assembly to consider is really spreading the pain more broadly than just nursing homes and hospitals,” said Katharine Webb, senior vice president of the Virginia Hospital and Healthcare Association.

But some say the system should not be cut at all, citing fears of a coming recession.

“Our message is don’t cut Medicaid, period,” said Jill Hanken, a staff attorney with the Virginia Poverty Law Center. “You should not cut the program when more people are going to need it.”

dgenz@dcexaminer.com