Medicaid cuts hotly disputed

Bush appointee denies dire effect on Colo. hospitals

By Berny Morson, Rocky Mountain News (Contact)

Published March 20, 2008 at 12:30 a.m.

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DeGette, says Smith, is underestimating the effect of Medicaid cuts on hospitals in Colorado.

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The head of federal Medicaid programs said Wednesday that states are exaggerating the amount of money they will lose under new reimbursement rules.

Denver Health Medical Center believes it will lose $60 million a year, while the University of Colorado's hospital has said the rules will cost it more than $30 million a year.

The projected cuts in funding, set to take effect in May, would reduce health care for poor people, officials at both institutions have said.

Dennis Smith, director of the Center for Medicaid and State Operations, said he couldn't comment on those estimates.

But Smith disputed a widely cited report by the House Committee on Oversight and Government Reform that predicts states will lose $49.7 billion in Medicaid reimbursements over the next five years. Smith said his agency puts the figure at $15 billion.

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

Smith said the report was based on calculations by the states themselves, some of which erred.

"Basically that report really has no credibility with us," Smith said.

Smith said the new rules, under discussion since 2003, were adopted because some states were not putting up the matching funds required to collect the federal share.

But U.S. Rep. Diana DeGette, D-Denver, said the Colorado cuts will occur because of a change in the definition of a public hospital, affecting eligibility for federal funds.

"They just wanted to cut, and they didn't really care that they were penalizing hospitals like Denver Health," DeGette said.

DeGette is trying to win a delay in the rule changes until next year, when a new president takes over.

Steven Summer, the president of the Colorado Hospital Association, said Colorado provides the full state match for the federal funds.

Summer said the amount of Colorado's loss under the new rules was calculated by the state's Health Care Policy and Finance Department.

The head of that agency, Joan Henneberry, issued a statement saying, "Most states are disagreeing with the administration's analysis. We believe the impact will be greater than they are saying and that the cuts will have a profound impact on Coloradans."

morsonb@RockyMountainNews.com or 303-954-5209

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