Gov. Gina Raimondo’s new budget proposes cutting millions of dollars in payments to hospitals and nursing homes. While their bottom lines have been improving, hospital officials say the cuts could hurt that recovery.
Specifically, the budget would cut about $54 million dollars in Medicaid payments to hospitals. That’s what they’re reimbursed to care for low income Rhode Islanders. The cuts come on top of others (such as the reduction of Medicare payments) that went to pay for the Affordable Care Act. But Hospital Association of Rhode Island head Mike Souza says reducing hospital rates shouldn’t be the only option for saving the state money.
“We hope to continue to work with the governor and the assembly to see if we can minimize that impact on hospitals at all," said Souza, "through other types of reforms and continue to try to do some long term solutions.”
Souza says he’s concerned the cuts could result in hospital layoffs.
“Jobs could be threatened, but hopefully hospitals can look at other areas where we can minimize operational costs.”
Still, more than half of Rhode Island hospitals operated in the black last year for the first time in a while. And more patients have insurance, saving hospitals millions in free care for the poor.
The governor’s budget proposes eliminating an annual cost of living increase for nursing homes. It also cuts three percent from what nursing homes are being paid now to care for Medicaid patients. Industry spokeswoman Virginia Burke says the cuts could be devastating, because Medicaid is a significant source of revenue for nursing homes.
“Seventy to 75% goes to staffing. And there’s no place else to cut, really," said Burke. "We’ve faced budget squeezes in prior years. There’s really no fat left. It’s going to mean loss of jobs.”
Burke says about 9,000 Rhode Islanders work in nursing homes. She says it’s too early to say how many people could be laid off. But she says she hopes the governor and her staff will listen to some alternative ideas for saving the state money.
Burke says she supports the governor's efforts to reform Medicaid, through the newly established "Working Group to Reinvent Medicaid."
The proposed cuts add up to more than $18 million dollars for the 84 nursing homes that care for Medicaid patients in Rhode Island. Medicaid patients make up a significant portion of nursing home populations in Rhode Island, says Burke.
“Two thirds of our patients in our nursing homes are covered by the Medicaid program. That’s a good deal higher than in other states," Burke said. "So, that means we don’t have a lot of other revenue sources to make up to our funding, has a deep impact.”
Burke says she’ll reach out to the Executive Office of Health and Human Services and take her case to the General Assembly.