Medicaid rules could slash funds to Colo. hospitals

Denver Health Medical Center would lose $60 million a year

By Berny Morson, Rocky Mountain News (Contact)

Wednesday, March 5, 2008

Colorado hospitals face massive cuts in federal funds that cover health services for the poor, under Medicaid rules set to take effect after May 25.

The state would lose just less than $800 million during the next five years, according to a congressional report.

The biggest chunk would come from Denver Health Medical Center, which would lose $60 million a year, followed by the University of Colorado's teaching hospital, which would lose $30 million to $35 million a year.

Dr. Patricia Gabow, Denver Health CEO and medical director, Tuesday called the cuts "the most patient-devastating issue we've faced in more than three decades."

"This will cause serious harm to the most vulnerable people," Gabow said.

Gabow's comments came during a briefing for the legislature's Joint Budget Committee, which drafts the annual state spending bill.

Lawmakers made clear that the state does not have the money to make up lost federal funds.

Rep. Bernie Buescher, D-Grand Junction, the JBC chairman, said, "It seems the federal government is trying to balance their budget by forcing expenses on us."

The new regulations were drafted by the Centers for Medicare and Medicaid Services, a division of the Department of Health and Human Services.

An agency spokesman did not return a phone call.

The agency has said the rules would slash $15 billion from Medicaid funding nationwide during the next five years. But in a report released Monday, the House Committee on Oversight and Government Reform estimated the cuts at $49.7 billion nationwide.

The committee is dominated by Democrats, while the rules come from a Republican administration.

Colorado is among the 17 states hardest hit by the new rules, according to the report. For example, Denver Health's $60 million hit is 22 percent of the $270 million the hospital spends on uninsured patients.

Exactly where the patients would go to get services isn't clear, Gabow said.

U.S. Rep. Diana DeGette, D-Denver, said the foreboding among hospital administrators is justified. "She should be really concerned," DeGette said of Gabow.

DeGette, who has sparred with President Bush on health issues, is part of the effort to head off the new Medicaid rules.

The main provisions were set to take effect in 2007. But lawmakers pushed through a one-year moratorium by attaching it to a bill they knew Bush would not veto - an Iraq war funding measure.

The moratorium expires May 25.

DeGette said she's trying to find another bill Bush won't veto to serve as the vehicle for an amendment that will preserve funding until next year, when a new president takes office.

DeGette said many Republicans are also upset about the new Medicaid rules, but she's not sure if there's sufficient support to override a possible Bush veto.

Medicaid

A federal-state program that helps pay for health care for the needy, elderly, blind, disabled and low-income families with children.

A state determines eligibility and which health services are covered. The federal government reimburses a percentage of the state's costs.