CAPITOL BRIEFINGS: Legislation would reduce Medicaid cut

LANSING — Hospitals and other health care providers in line for a current-year 4 percent Medicaid funding cut might be gaining some ground in having at least some of that blow lessened.

A supplemental appropriations bill, passed recently by the state House Appropriations Committee and awaiting action on the House floor, would reduce the 4 percent cut, scheduled to begin in July, to about 2.5 percent.

For hospitals, a 2.5 percent cut in Medicaid reimbursement rates equates to an $8.7 million reduction, including $2.7 million in state general funds and $6 million in federal matching funds, said Lori Latham, vice president of political and public affairs for the Michigan Health & Hospital Association.

That compares with hospitals' potential funding loss of $14 million under a 4 percent cut, including $4.3 million in general funds and $9.7 million in federal matching funds. The reduction is scheduled to take effect July 1 and run through the Sept. 30 end of the 2009 fiscal year.

House Bill 4310 also would restore funding for optional Medicaid services — money that was eliminated in May's budget-cutting executive order.

However, the bill's immediate fate, particularly in the Senate, is uncertain. So the health care community also is talking to state budget officials about other alternatives that could mitigate fiscal 2009 cuts to providers and retain federal matching dollars that otherwise would be lost, Latham said.

She declined to specify proposals, but said health care providers understand the state's budget straits and are trying to, if possible, find a solution.

“Our goal right now is to help the state still achieve the general fund savings that they would get from the hospital community, but still preserve the federal matching dollars,” Latham said.

And that's just for the current year.

Many Lansing interest groups are worried that a worsened state revenue picture could propel 2009 cuts into the 2010 budget under debate in the Capitol.

For hospitals, a 4 percent cut on an annual basis would mean a $56 million reduction, including $15 million in state general funds and $41 million in federal matching funds.

Latham said the hospital association understands the need for shared pain in the budget, but the associated loss of federal dollars exacerbates the problem.

She said the association is “focusing right now on fiscal year 2009, and the immediate, and then we're going to start negotiations” on fiscal 2010.

Polling finds tax-reform support

Its tax-reform study results are yet to be released, but Detroit Renaissance Inc. says related polling and focus groups it's conducted show support for major tax reform.

Kirsten Ussery, Renaissance director of communications, said the CEO group, through a poll and focus groups of Michigan voters, wanted to determine “what the public will or won't support.”

She declined to elaborate on findings but said: “The public, clearly through the polls and focus groups, do not want tax increases because they're feeling the pain themselves through the economy, but they do want to see major reform, and they realize that major changes need to be made.”

Details of the polling and a Renaissance-commissioned Anderson Economic Group L.L.C. study of tax-reform options are expected to be released the end of this month.

Kiosks automate license tests

The Michigan Department of State has completed a wave of branch-office installations of automated testing stations for commercial driver's license applicants.

Secretary of State Terri Lynn Land said last week that 80 branch offices now have the kiosks, which employ touch-screen technology and provide immediate test feedback for applicants.

A grant from the U.S. Department of Transportation's Federal Motor Carrier Safety Administration funded the recent addition of 142 kiosks in 40 offices, adding to 145 kiosks that were installed in 40 other branch offices in 2008.