To:               Members of the House Department of Community Health Appropriations Subcommittee

From:          The Partnership for Michigan’s Health (Michigan’s hospitals and physicians)

Date:           April 19, 2010

Subject:      Fiscal Year 2011 Department of Community Health Budget Priorities

The Partnership for Michigan’s Health recognizes that decision making for the Michigan Department of Community Health (MDCH) budget is increasingly difficult and fiscal year (FY) 2011 is no exception. Despite Michigan’s revenue challenges, funding for health care, especially Medicaid, must remain a priority for the state. Below is a list of the priorities on which the Partnership asks the House DCH Appropriations Subcommittee to act in FY 2011. As you can see, the Partnership is supportive of several actions taken by the Senate.

• Apply, as the Senate did, the entire $101 million in Medicaid savings related to the Medicare Part D prescription drug program, also known as the “clawback,” to support Medicaid in FY 2011. These funds are derived from Medicaid and must stay in the Medicaid program. Any additional savings related to the extension of the enhanced FMAP should also be used to support Medicaid in FY 2011.

• Reject, as the Senate did, the tie-bar between the successful passage of a quality assurance assessment program (QAAP) for physicians and further cuts to hospitals or any other health care provider. The Senate recommendation rejected sec. 1830 of the proposed executive budget bill for the MDCH budget.

• Restore the carried-forward FY 2010  8 percent cut to provider payment rates; the new cut to physician rates that reduce payments by an additional 4 percent to all specialties (other than obstetrics, emergency room, pediatrics and primary care); and funding for caretaker relatives and 19/20 year olds scheduled to be eliminated on July 1, 2011. Medicaid underfunding is unsustainable and these cuts exacerbate the problem.

• Support, as the Senate did, the executive recommendation to increase general funding of Medical Services by $137 million to recognize the increased cost of caseload and utilization.

• Support, the Senate recommendation to maintain traditional disproportionate share hospital (DSH) payments and graduate medical education at FY 2010 levels and expand the second DSH pool to $10 million.

• Support the Senate recommendation to restore funding for adult dental and podiatric services.

• Assume, as the Senate did, that enhanced federal matching assistance percentage (FMAP) is continued for two quarters in FY 2011. The Partnership is working with Michigan’s congressional delegation to make this additional funding a reality.

• Recognize that everyone, not just those families who are covered by Medicaid, lose access to care when health care services are forced to be discontinued. In addition, eliminating basic health services reduces the appeal of a community to new or existing businesses.

In summary, the Partnership asks the House DCH Appropriations Subcommittee to restore the cuts to Medicaid reimbursement rates and optional populations, to claim all federal assistance related to Medicaid for its budget and to recognize the detrimental economic impact of allowing the existing policies to continue. Adoption of these recommendations is absolutely critical to meeting the highest priority for this subcommittee and the health care community — that of delivering continued, high quality and efficient health care to Michigan citizens.

For more information, please contact:

Dave Finkbeiner
Michigan Health & Hospital Association
(517) 703-8601

Colin Ford
Michigan State Medical Society
(517) 336-5737

Fred Anderson
Michigan Osteopathic Association
(517) 347-1555