Arizona hospitals try to block state Medicaid cuts with self-imposed fee; legislators say no chance

As many as 120,000 Arizona residents may lose Medicaid coverage Oct. 1 if the federal government approves a state plan to cut Medicaid, reports Joanna Dodder Nellans of The Daily Courier in Prescott, pop. 40,000. That equals $530 million in revenue losses and approximately 30,000 jobs losses in Arizona hospitals. "These cuts are simply unsustainable," the Arizona Hospital and Health Care Association told U.S. Health and Human Services Secretary Kathleen Sebilius in a letter.

The association proposed a self-imposed fee on providers to temporarily cover the state's one-third match so the federal government will continue to pay the other two-thirds, Nellans reports. The fees would not be passed on to patients because the federal government would reimburse providers, but the fee would be considered a tax increase, which requires a two-thirds approval of the Legislature, and "House Speaker Andy Tobin, R-Paulden, agrees with the governor's office that the fee doesn't have a chance," Nellans reports. "Even with the proposed cuts, Arizona still will offer more Medicaid services than most other states, Tobin said."

"Without the self-imposed fees, hospitals would have to pass on some of the costs of caring for the uninsured to people who do have insurance," Yavapai Regional Medical Center President Tim Barnett told Nellans. Nursing homes are among those facing the propsed 5 percent cut to reimbursement rates. "It would be very, very difficult," Kathleen Collins Pagels, executive director of the association, which represents most Arizona nursing homes, told Nellans 60 to 75 percent of Arizona long-term care patients rely on Medicaid. The association said most members have agreed to the self-imposed fees. (Read more)