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Senate budget panel making spending decisions

The Senate’s budget committee voted yesterday to require hospitals to participate in a managed care network by July 1 if they want state compensation for charity care.

The Finance Committee is making its final spending adjustments to its $10.7 billion two-year state spending plan in hopes of wrapping up Tuesday.

The state’s efforts to implement a managed care system for Medicaid clients have been stalled because hospitals, mental health clinics and other providers refused to participate due to low state reimbursement levels for treating those patients.

The current budget, written by Republicans, also cut state hospital aid for all but a handful of critical access hospitals. The 10 largest hospitals then sued over Medicaid rates, which complicated efforts to negotiate over managed care.

The state had hoped to put the managed care system into place during the last budget cycle and counted on saving $15 million from the switch from paying on a fee-for-service basis. Now, unless the system is up and running July 1 as hoped, some of $23 million in savings the state hopes to get over the next two years won’t be realized.

Gov. Maggie Hassan’s budget would restore some of the aid cut in the last two years – but only if the hospitals pay taxes on their revenues at much higher amounts than the Senate believes is realistic. The state parcels out the hospital tax revenue to pay medical providers, for general state spending and as aid to hospitals.

The Senate budget also would restore some of the aid to the hospitals, but they would have to agree to participate in managed care to benefit. The Department of Health and Human Services has adjusted key rates to entice medical providers – especially hospitals – to participate.

The committee plans on making final spending decisions Tuesday. The full Senate votes on the budget June 6.

Health and Human Services Commissioner Nicholas Toumpas told the committee that as the budget stands now, he estimates he will need another $40 million to avoid having to make cuts to personnel and possibly to popular programs providing services to the disabled, mentally ill and troubled youth.

Committee Chairman Chuck Morse said he didn’t have a ready solution.

“There’s no new revenue, and we’re not going to be able to do much about it,” said Morse, a Salem Republican.

Senate Democratic Leader Sylvia Larsen pointed out that the Senate is foregoing $13 million in revenue the House accepted by delaying implementation of several tax breaks for business.

“This budget is about choices,” said Larsen, of Concord.

Senate President Peter Bragdon said the public has to understand that the budget increases spending, just not as much as some would like.

“It is always about making tough choices,” said Bragdon, a Milford Republican.

The Senate and House have until the fiscal year begins July 1 to negotiate a compromise budget.

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