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Survey: Medicaid Providers Facing Payment Cuts

by Benjamin Domenech on June 8, 2011

This latest report signifies the pinch that providers see coming from the unsustainable growth of Medicaid.

It’s grim times for state Medicaid programs: Thirty-three states have proposed cutting Medicaid payments to providers in fiscal 2012, according to a new survey conducted by the National Governors Association and the National Association of State Budget Officers. The trend suggests that hospitals will have to cope with ongoing funding cuts for low-income patients for the foreseeable future.

The survey concluded that Medicaid was the single largest expenditure on the state level, representing about 22 percent of all spending. It also found that 16 states have proposed freezing provider payments and 12 have proposed raising provider taxes or fees in fiscal 2012, while 10 others already plan to raise taxes and fees in fiscal 2011.

The clamor for cuts to Medicaid programs comes despite the fact that overall enrollment grew an enormous 8.1 percent in fiscal 2010, and is expected to grow more than 5 percent in this fiscal year and nearly 4 percent in 2012. Persistent unemployment, an overhang from the Great Recession, is to blame, along with the end to federal stimulus funds.

Read the survey here. See Table 29 to see which states plan to cut payment rates within their budgets next year.

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