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March 6, 2021
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Business Review Western MI
Business Review Western MI
Medicaid Cuts
(2007-05-08)
(wgvu) - The planned six percent cut in Medicaid payments to health care
providers will put a greater financial burden on employers to make up
the difference, lobbyists say.

The nearly $50 million the state would save through the payment cuts,
targeted to begin June 1, could induce further shifting of costs onto
private payers by hospitals, doctors and other care providers.

Estimates now peg the effects of cost shifting on employers at 25 cents
on every dollar spent on health premiums in Michigan and many in the
health care industry believe that's a conservative estimate.

We, as a business community, are getting the short end of the stick.
We're the ones who are picking up the tab, Grand Rapids Area Chamber of
Commerce lobbyist Jared Rodriguez said during an Alliance for Health
forum last week.

We have a direct, vested interest in seeing more money in Medicaid, not
less, Rodriguez said.

Citing the state's $700 million budget hole for the current fiscal year,
Gov. Jennifer Granholm on April 30 issued an executive order cutting
Medicaid payments by six percent across the board, from June to September.

Care providers say the cuts will only deepen their losses on providing
care to Medicaid recipients, resulting in more cost shifting.

All of us as a society get to pay a little more for their care, said
Mark Lemoine, system director of government affairs at Grand
Rapids-based Spectrum Health.

Spectrum Health, with a Medicaid patient population of 14.7 percent,
will see a $2.3 million reduction in payments for care provided at the
Blodgett and Butterworth campuses, Helen DeVos Children's Hospital and
its Continuing Care unit.

Spectrum incurred $45 million in Medicaid losses in the last fiscal year
an amount that's based on cost and has grown steadily from $24.5
million five years earlier.

The cuts represent a $1.2 million hit for inpatient care at Metro Health
Hospital in Grand Rapids.

In Kalamazoo, Borgess Health reports a potential $1.4 million hit if the
payment reduction goes through. The health system has a Medicaid patient
population of about 11 percent.

Bronson Healthcare Group would lose another $2 million in Medicaid
reimbursements.

The financial ramifications for hospitals could go even further. Should
the number of physicians who are no longer accepting Medicaid patients
increase, as it has been, hospitals worry it would result in increased
visits by recipients to emergency rooms, by far the highest cost of care
available.

By not funding Medicaid properly, Lemoine said, we're creating our own
problem.
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