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In This Issue:
With local, state and federal governments facing unprecedented economic challenges, healthcare providers in Massachusetts are bracing for the impact. The Commonwealth of Massachusetts is facing a $650 million budget shortfall during the current fiscal year and an estimated $3 billion budget gap for Fiscal Year 2004.
To address the widening gaps, the Romney Administration recently announced emergency budget cuts of $343 million. Of that total, nearly 41 percent will impact health and human service providers. Some $75 million in Medicaid cuts have been targeted as part of the plan to reduce spending. Additionally, the Governor has proposed scaling back Medicaid eligibility, an initiative that would require legislative approval.
These proposals are of concern to hospitals since Medicaid currently reimburses hospitals in Massachusetts only 71 cents on the dollar. Additionally, the state free care pool is projected to reach a $240 million deficit next year, placing additional pressure on the healthcare system.
At the federal level, the Administration is pushing for Medicare reform, including the addition of a prescription drug coverage subsidy. Last week, Congress approved a final spending bill for FY 03. While the Congress did not restore the cuts in Indirect Medical Education payments, the bill did increase Medicare physician reimbursements by 1.6 percent. Under the bill, funding for the National Institutes of Health (NIH) will increase by $3.6 billion to $27 billion this fiscal year.
Advocacy efforts on behalf of Partners HealthCare continue in Washington and Boston as the environment continues to shape the ability of hospitals to sustain the provision of quality care, research and education.