Hospitals and Douglas administration at odds over Medicaid deficit

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(Host) Vermont hospital executives came to Montpelier on Wednesday to add their voice to the health care debate. They’re worried about the governor’s plan to cut Medicaid payments to hospitals. The hospitals have a plan of their own that calls for a temporary tax but that met with a cool reception in the governor’s office.

VPR’s John Dillon reports.

(Dillon) The hospitals’ concerns boiled to the surface during a meeting between health care CEOs and Josh Slen, the state official working on the Medicaid issue.

Tom Huebner, the chief executive at the Rutland Regional Medical Center, warned that the governor’s plan to cut $21 million in Medicaid reimbursements will force providers to cut programs. That would mean that fewer doctors will see Medicaid patients.

(Huebner) “We have a crisis of the moment. And mostly – other than cutting the hell out of everything – we don’t have strategy for the short term. And that’s what’s scaring the hell out of us.”

(Dillon) The state faces a projected $80 million shortage in its Medicaid budget for the next fiscal year. The governor has proposed several steps to address the issue. Besides cutting payments to providers, he wants to increase premiums for Medicaid beneficiaries.

Josh Slen, from the Office of Health Access, told the hospital executives that all the options are painful.

(Slen) “We can’t solve this problem without causing pain. We just can’t. It’s either enormous tax revenue pain, or beneficiary reductions.”

(Dillon) The Douglas administration also hopes to negotiate a five-year Medicaid funding plan, known as the Global Commitment, with the federal government. The idea is to lock in a specific annual increase, about 10 percent. The state would then get more flexibility on how the Medicaid money is used.

But Tom Huebner and other hospital executives are very skeptical.

(Huebner) “Initially, our greatest concern with the Global Commitment is we just don’t understand how it’s going to work. There’s nothing in writing that we’ve seen that really explains it very thoroughly. And that is really very concerning because essentially you’re making a very long term deal that may limit the amount of money coming in to the state from the federal government and ultimately may limit the amount of funds that are available to take care of patients.”

(Dillon) The hospitals say the Medicaid funding crisis probably can’t be solved in one legislative session. They’ve proposed a temporary, broad-based tax to buy time to shore up the program until a long-term solution is found.

But Governor Douglas doesn’t like the tax idea.

(Douglas) “To put an additional tax burden on the people of our state I think would be ill-advised. So I told the hospital representatives that I want to continue to talk with them about the Medicaid challenge and find a solution but that I’m very cool to the idea of a tax.”

(Dillon) But the hospital executives say that when they present their budgets this spring, they may have to cut people and programs. They warn that some of those cuts will include priorities that the governor likes, such as wellness programs and chronic care initiatives.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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