Healthcare Business News
Gov. Jan Brewer

Ariz. governor seeks $500 million Medicaid cut

By Rebecca Vesely
Posted: March 16, 2011 - 3:00 pm ET

Arizona hospitals say a new state Medicaid funding proposal will cost them $530.7 million.

Gov. Jan Brewer late Tuesday announced a $500 million proposal to cut Medicaid. Instead of her original plan to drop 280,000 people from Medicaid, the new proposal would eliminate about 120,000 people, and reduce provider reimbursement by 5% starting Oct. 1. Medicaid recipients would see more co-payments for services and benefit limits.

Hospitals say the 5% reimbursement cut, in conjunction with an already planned 5% rate cut going into effect in April, would result in nearly $1.3 billion in lost funding. That's including $700 million in Medicaid payment reductions hospital have seen since 2008.

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“Arizona hospitals will be forced to cut family-sustaining jobs and lifesaving services,” said Laurie Liles, president and CEO of the Arizona Hospital and Healthcare Association, in a statement.

The hospital association is pressing for a special healthcare assessment on hospitals, nursing homes and managed-care plans to draw down more federal funds. The groups presented the proposal to Brewer on Friday.

“We remain hopeful that the governor and legislators will collaborate with us on a plan that will project jobs and the healthcare safety net,” Liles said in the statement.

Arizona's Medicaid program, called the Arizona Health Care Cost Containment System, covers about 1.3 million people. Last month, HHS Secretary Kathleen Sebelius determined that Arizona could make the enrollment cuts without losing federal dollars.

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