ANNAPOLIS – Maryland hospitals and some of their poorest patients receiving Medicaid may be faced with higher costs because of budget cuts on health services that become effective Jan. 1.
Health care administrators Tuesday told the General Assembly’s Health and Government Operations Committee of the harm repeated budget cuts will wreak this year and next. Hospitals face a $10 million cut in the first six months of 2004 that will mean an increase in uncompensated cases. And patients may face a limited number of days in which they can stay at hospitals.
Insurance company limits on hospital stays could shift the cost burden to patients or hospitals, when patients have no insurance. The Health Services Cost Review Commission, which meets today, ultimately will determine if insurance rates will rise. Hospital rates have already increased 6.5 percent for fiscal year 2004. “We’re dealing with some incredibly difficult problems,” said Nelson J. Sabatini, secretary of the Department of Health and Mental Hygiene. The impact of the cut on hospital services could be reduced through an increase in insurance rates. Although it was not clear if the cuts would trigger a widespread insurance rate hike, the impact on hospital staff and quality of care is expected to be marginal. “I have yet to see a budget cut that everyone stands up and applauds,” said Sabatini. Nursing homes, mental health services and pharmacies also are affected. “Hopefully, some of these measures will be temporary, one-time measures,” Sabatini said.
Nursing homes suffered a $10.6 million cut in the spring and now another $4 million in reductions from state and federal government sources. Medicaid accounts for about half of all nursing home spending in Maryland. In addition, hospital stay limits would place an additional burden on nursing homes, which would have to take hospital patients needing extended care.
The Mental Hygiene Administration sustained $10.1 million in budget cuts for fiscal year 2004, and community mental health service providers must turn away uninsured consumers, reduce authorized services and complete more paperwork. Pharmacies, facing a $2.2 million state and federal cut, will also feel the crunch. Beginning in January, the state’s reimbursement rate for pharmacies will drop from the average wholesale price less 11 percent, to that price less 12 percent.