Indiana hospitals continued to negotiate over Gov. Evan Bayh's healthcare reforms last week after $60 million worth of cuts in Medicaid payments to hospitals took effect.
"We're still engaged in some discussions with the hospitals on the cuts," said Jim Verdier, Indiana's Medicaid director.
The state had delayed the cuts in Medicaid payments to hospitals until Feb. 1 while dealing with hospitals upset about Mr. Bayh's proposed Medi-caid reforms (Jan. 10, p. 10).
Of Mr. Bayh's proposed $490 million in Medicaid cuts during the two-year budget period that ends June 30, 1995, cuts affecting hospitals would be $32 million from inpatient care, $28 million from outpatient care and $23 million through changes in lengths of hospital stays, the state budget agency said. The state is only delaying Medicaid cuts to hospitals for inpatient and outpatient care.
Before the changes, Indiana was projected to spend $2.4 billion on Medicaid in the next budget biennium, the state budget office said.
Indiana hospitals argue that the whole Medicaid system should be reformed, rather than just the payment system.
Meanwhile, a trial has been scheduled for March 22 and 23 in U.S. District Court in Hammond, Ind., in a suit filed by Methodist Hospitals' Northlake campus in Gary and six Gary physicians to try to stop the cuts. While that issue remains in the courts, Methodist and the physicians have until April 1 before their Medicaid payments are cut.
Before Mr. Bayh's reforms, the state reimbursed 100% of hospitals' Medi-caid costs. The governor's new proposal reduces those reimbursements to 85%, Mr. Verdier said.
The state plans to go through with the cuts but wants hospitals and other affected healthcare providers to come up with their own ideas for savings if they don't like the state's proposals.