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State braces for health care cuts after Congress fails to extend enhanced Medicaid spending

Anita Kumar

State officials are warning legislators that they soon may be hearing from angry residents -- and perhaps Medicaid providers -- facing unanticipated health care cuts now that Congress has failed to pass a bill that could have helped plugged Virginia's budget holes.

"We expect that the implementation announcements of these "contingent" budget cuts may generate constituent contacts with your offices,'' Cindi Jones, acting director of the Virginia Department of Medical Assistance Services, wrote to legislators Thursday.

Virginia, like 20-plus other states, adopted a budget that included some drastic cuts to health and human resources, but said that the cuts probably would not go into effect because Congress was on the verge of approving a bill to extend enhanced Medicaid funding for states.

The House and Senate have approved bills that include the stimulus money, but they are differing versions. They had hoped to reach a compromise by Memorial Day, but that has not happened.

The federal stimulus bill included boosted Medicaid spending for states lasting until Dec. 31. States have sought an extension of the increased aid for another six months to June 30, 2011.

The letter to legislators was sent the same week that the state sent a letter to Medicaid providers -- doctors, dentists and hospitals -- detailing the significant drops in reimbursement rates they may see for providing services to Medicaid patients.

Other cuts could include thousands fewer poor children receiving health coverage under the state's FAMIS program or some institutions could close wings -- like maternity units -- or shutter altogether.

Read the full letter to legislators below:

Members of the Virginia General Assembly:

As you are aware, the federal government has not yet enacted legislation to extend the increased federal Medicaid match rate under the American Recovery and Reinvestment Act (the Federal Stimulus). There are current proposals on the table to extend the federal funding through June 2011, but these proposals have not yet been adopted, which means the funding is currently only authorized through December 2010.

As you know, several budgetary savings initiatives are triggered if the federal funding is not extended, many of which are slated to begin on July 1, 2010. Due to notice requirements under the Medicaid program, as well as system updates required to implement the changes, the Department of Medical Assistance Services (DMAS) must move forward in announcing the implementation of the budget items with a July 1, 2010 effective date. In the event that the federal government enacts the extension prior to July 1, DMAS will halt implementation to the extent possible. Depending on the date of federal enactment and the systems issues involved in implementing the changes, it may not be possible to halt the changes prior to July 1, but all efforts will be made to do so, or to do so as soon as practicable after July 1 for those for which we cannot reverse immediately.

While we await the decision regarding the extension of stimulus funding, DMAS will begin to implement the proposed budget reductions contained in the Appropriations Act to ensure that the agency remains within budget. We remain hopeful that Congress will extend the increased federal Medicaid match through June 2011. We expect that the implementation announcements of these "contingent" budget cuts may generate constituent contacts with your offices. As such, we wanted to provide this e-mail for your information in responding to those concerns. If you have any questions or concerns regarding this situation, please do not hesitate to contact me at 804/786-8099. Thank you for your patience and understanding in dealing with this situation.

Cindi B. Jones
Acting Director
Virginia Department of Medical Assistance Services

By Anita Kumar  |  May 31, 2010; 10:00 AM ET
Categories:  Anita Kumar , General Assembly 2010  
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There's never enough money to pay for social services because the top 1% rich in this country do not pay tax compensurate with their huge incomes and bonuses. So the middle class gets squeezed and squeezed and squeezed. We need the Robin Hood Tax. A tiny tax of .05 percent on speculative banking transactions that will generate income to tackle job creation, poverty, and climate change. See and

Posted by: moiraeve1 | May 31, 2010 11:31 AM | Report abuse

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