City hospitals hit hardest by cuts to state Medicaid

October 23, 1991|By Blair S. Walker

Baltimore hospitals will bear the brunt of the state's $34.4 million in Medicaid cuts -- 71 percent, or $24.4 million -- because of the city's large numbers of poor people seeking treatment, state officials said yesterday.

While those patients will not be denied treatment, employers, insurers and policyholders probably will pay more as the hospitals seek increases in their rates to counter the losses.

"It will have the greatest impact on many of the inner-city hospitals in terms of their rate structure," said Nelson J. Sabatini, secretary of the state Department of Health and Mental Hygiene.

The state budget reductions, which are to take place Nov. 1, will eliminate payment of hospital inpatient services for at least 28,000 poor or disabled people around Maryland. Baltimore hospitals, hit disproportionately by the cuts, are requesting the largest increases in the rates they charge customers from the state Health Care Cost Review Commission, which must approve all rate changes, said the commission's executive director, John M. Colmers.

"The Baltimore City hospitals have a much higher allowance built into their rates for uncompensated losses than the suburban hospitals, where there just aren't that many poor people going for care," Mr. Sabatini said.

At least $15 million is being slashed from Johns Hopkins Hospital's budget, according to Irvin W. Kues, senior vice president at the hospital.

The hospital is seeking a 3 percent increase, he said, which would still result in a $2.5 million to $3.5 million shortfall.

The state's budget-slashing action also eliminates $7 million from the Maryland Shock Trauma Center at the University of Maryland Medical System, said Robert A. Chrencik, a senior vice president there. UM, faced with a loss of $14.7 million, has asked for a 5.07 percent rate increase.

At Church Hospital, a 5.98 percent rate increase is being sought to counter a $3.5 million loss; Bon Secours lost $2.7 million and seeks a 5.35 percent rise; and Liberty Medical Center lost $3.3 million and seeks a 5.15 percent increase.

Rounding out the list are Francis Scott Key Medical Center, which had $4.8 million lopped from its budget and is requesting a 4.14 percent rate rise, and Maryland General Hospital, which lost $2.3 million and seeks to raise its rates by 3.22 percent.

The cost review commission will make a decision in early November, Mr. Colmers said.

The Maryland hospitals are projecting losses of more than $50 million -- far more than the $34.4 million budget cut -- because they are anticipating losing compensation for Medicaid treatments already provided but not yet paid for, Mr. Sabatini said.

When the General Assembly returns in January, a top priority of the Maryland Hospital Association will be to restore the money cut from the state's Medicaid budget, MHA President Calvin M. Pierson said.

"Restoration of the [Medicaid] program is our top priority for the upcoming legislative session," Mr. Pierson said.

"We're optimistic that the program will be restored, because everyone understands the impact of the program."

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