We understand that Medicaid is a significant driver of costs in Virginia’s biennial budget. However, current Medicaid reimbursement rates for hospitals, nursing homes and physicians are having real and tangible effects on access to care and healthcare jobs in Virginia. Current budget proposals will make the crisis worse.
A Virginia Hospital and Healthcare Association (VHHA) report says 14 hospital obstetrics units have closed in Virginia since 2003, due in part to historically low Medicaid reimbursements. Another hospital OB department and a 16-bed psychiatric unit are scheduled to close in 2012.
With those realities before us, we are grateful that Governor Bob McDonnell is open to earmarking future state revenues beyond projections for Medicaid. Unfortunately, even if the legislature approves that approach, higher-than-projected revenues are only a hopeful possibility in a stubbornly slow economy and not a solution to the Medicaid crisis.
Current proposals in the FY13-14 biennial budget would lower Medicaid reimbursements for hospitals to 59% of inpatient costs in 2014. Nursing homes currently lose an average of $15 per day on Medicaid recipients, who comprise 80% of some nursing home populations. Providers cannot keep absorbing these growing losses through internal cost-cutting without eventually affecting services.
Losing access to care for Medicaid recipients may have long-term effects on public health and the economy. In the end, Virginia’s poorest, sickest, oldest and most fragile citizens will suffer. However, loss of access to services affects everyone in a community, not just those on Medicaid.
With that in mind, we support a proposal for a study by the Joint Legislative Audit and Review Commission on the real effects of current Medicaid funding on access to care and healthcare jobs in Virginia. Virginia ranks 48th among the states in Medicaid reimbursements, even though Virginia’s healthcare system is acknowledged as an extremely efficient user of Medicaid dollars.
We applaud Governor McDonnell for listening to the VHHA and other healthcare leaders about the crisis facing Medicaid in Virginia. We hope the General Assembly will find a way to hold the line on current Medicaid reimbursements in the next biennial budget and not further jeopardize access to care by paying providers across the state even less.
