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Federal cuts threaten hospitals If enacted, a slew of proposed federal cuts in payments for treating Medicare and Medicaid patients could bring an already vulnerable Georgia hospital community to its knees said officials from the Georgia Hospital Association. In the past month, in an effort to balance the national budget by 2012, the Bush Administra- tion has proposed two separate measures that, combined, would cost Georgia hospitals more than $300 million in 2008 and nearly $2 billion in the next five years. In the past month, news from Washington has rocked the Georgia hospital community on three separate occasions. They are: + President Bush's fiscal year budget proposal calls for $75.8 billion in cuts over the next five years from Medicare and $25.7 billion from Medicaid totaling more than $100 billion in the next five years and $252 billion over the next 10 years. If the president's budget is passed, Georgia hospitals would lose more than $48 million in 2008 and nearly $700 million from 2008-2012. + In late January, the federal Centers for Medicare and Medicaid Services released guidelines that drastically reduce the number of dollars paid to those hospitals that treat a large number of uninsured patients. By limiting "intergovernmental transfers," CMS can save $3.9 billion in Medicaid payments over the next five years resulting in an annual cut of $253 million for about 90 hospitals in the state that currently participate in the program. + Georgia's PeachCare for Kids program, the state's highly successful health insurance program for children of low-income, working families, is on the cusp of running out of money. Barring a $131 million cash infusion from either the federal or state government, funds for the program will run dry in March putting 273,000 children into the ranks of Georgia's growing uninsured population. While attempts by federal and state governments to reign in Medicare and Medicaid expenditures are nothing new, Georgia hospital officials maintain that they have never seen so many issues with such drastic implications converge at the same time. "If just one of these issues was on the table, we'd be really concerned," said GHA Chairman William Richardson, who is CEO of Tift Regional Medical Center in Tifton. "But to have all of these issues at once is quite overwhelming to everyone. We have no choice but to actively oppose these cuts and to support the continued funding of these health insurance programs that are so vital to millions of Georgians." Before these problems hit, Georgia hospitals were already facing a myriad of financial challenges that had weakened their role as a public safety net. In 2005, more than one-third of all hospitals - including 46 percent of rural hospitals - finished in the red. Last summer, the state rolled out its new Medicaid managed care program that has already had a devastating impact on hospital bottom lines as a result of lower payments from the program's three care management organizations. If the proposed federal cuts are enacted, some hospitals - especially those in rural areas - might not survive.
"In the hospital community, the big blue 'H' sign at the side of many roads in the state represents a sacred promise to always be there for every Georgia family in their time of greatest need. It's a promise that hospitals take a great deal of pride in," explained GHA's Parker. "But the sad fact is that these present challenges have the potential to compromise hospitals' ability to fulfill that promise. That's why we are happy to partner with state and federal governments to achieve fiscal responsibility but we will not compromise on any proposals that would limit residents' access to live-saving health care services."
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