The Indiana Hospital Association is criticizing the state’s decision to cut Medicaid payments to its members by 5% to adjust for revenue shortfalls.
Regionals: Hospitals decry Medicaid cuts
5% cuts won't affect doc reimbursement in Indiana
“These cuts represent a significant blow to the ability of Indiana’s hospitals to serve their communities,” association President Douglas Leonard said in a written statement. “Hospitals will be forced to make difficult decisions about what types of services they can provide.”
The Indiana Family and Social Services Administration announced that the lower payments to hospitals would save the state about $10.6 million without cutting what FSSA Secretary Anne Murphy called “vital services” in a news release. The cuts do not extend to physician reimbursement. Another $13.6 million in savings is expected to come from leaving department job vacancies unfilled and other administrative adjustments, as well as $9.8 million by placing a moratorium on clients in a residential assistance program and negotiating better rates with vendors.
Leonard said the hospital association will work with state officials to ensure the cuts are temporary. “Like the state, hospitals are also hurting—we are treating more Medicaid and uninsured patients and seeing fewer patients with better-paying commercial health insurance.”
Already, at least one hospital, 83-bed Logansport (Ind.) Memorial Hospital, is preparing for the cuts with layoffs and delayed purchasing plans in its 2010 budget.
“Indiana Hospitals have not received an increase in Medicaid fee schedule payments for over 15 years, and Memorial must adjust its 2010 budget to reflect the now recently announced cuts to lower reimbursement for Medicaid patients,” said President and CEO Brian Shockney, in a news release.
“The implications of these cuts mean that six full-time positions could be lost, capital purchases could be postponed, and the cost associated with more than 1,000 tests and treatments will be passed on to other patients,” he said.
“So far, physician reimbursement has not been affected, and we’re certainly pleased about that. Our hope is that there will be no further cuts and that physician reimbursements will remain stable,” Shockney said.
The state’s Medicaid expansion program, Healthy Indiana, uses a portion of disproportionate-share hospital funding to finance coverage to people who don’t qualify under its traditional Medicaid plan. Healthy Indiana may see about 4,000 slots opening up in the next few weeks (Nov. 16, p. 30).
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