California Public Hospitals Fret About Medicaid Funding Cuts
Federal officials say that California will be exempt from new Medicaid rules, but public hospital officials in California remain concerned that they could lose as much as $500 million annually under the rule, the Los Angeles Times reports (Alonso-Zaldivar, Los Angeles Times, 2/24).
Under the rule, proposed by CMS in January, health care providers, rather than state and local governments, would have to receive all Medicaid reimbursements to which they are entitled.
Dennis Smith, director of the Center for Medicaid and State Operations at CMS, said that the rule would help eliminate financing agreements under which providers receive state Medicaid reimbursements that exceed the actual cost of services and states receive extra matching funds from the federal government as a result.
The rule would save the federal government an estimated $3.9 million over five years, according to CMS (California Healthline, 1/16).
Congress last year rejected legislative proposals to enact similar funding changes.
Michael Bowman, a spokesperson for the Department of Health Services, said that Gov. Arnold Schwarzenegger (R) will address the issue during a visit to Washington, D.C. The governor previously has voiced concerns about the proposed rule.
CMS spokesperson Mary Kahn said an existing agreement between California and the federal government already complies with the proposed rule.
However, Melissa Stafford Jones, president and CEO of the California Association of Public Hospitals and Health Systems, said that the language of California's agreement with the federal government does not specifically state that California is in compliance with the provisions of the proposed rule. "If [the federal government] had stated in the rule itself that the proposed provisions would not apply to California, then perhaps we would come to a different conclusion," she said.
The National Governors Association on Friday sent a letter to congressional leaders in opposition to the proposed rule. Letters opposing the proposal have been signed by 43 senators and 226 members of the House.
Moreover, some legal experts have questioned whether the federal government has the authority to adopt the proposed changes to Medicaid without Congressional approval (Los Angeles Times, 2/24).