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Tuesday, June 24, 1997

Texas could lose nearly $1 billion in Medicaid money

By MICHELLE MITTELSTADT Associated Press Writer

WASHINGTON (AP) - As Congress heads for key votes this week on programs central to the budget-balancing pact, Texas lawmakers are deeply worried about a proposal that would slash the state's Medicaid funding by nearly $1 billion over five years.

Loss of the money, which is spread among urban and rural hospitals that treat higher rates of indigent patients, would be devastating, according to hospital industry officials and members of Congress alike.

The House proposal, due to be voted on Wednesday, would cost Texas $929 million over five years - 40 percent of its federal Medicaid Disproportionate Share Hospital funds. The Senate, also voting this week on the legislation necessary to achieve a balanced budget, would trim the Texas DSH funds by 35 percent.

The cuts "would decimate the way our state provides services to low-income individuals," all 30 Texans in the House wrote Speaker Newt Gingrich, R-Ga., recently.

While the Texans acknowledge the need for belt-tightening, they argue that Texas and 11 other states that are receive higher levels of DSH funding are being unfairly hit. The Medicaid blueprint adopted by the House Commerce Committee, which comes to the floor Wednesday, cuts funding for 12 high-DSH states by 40 percent - while other states take a maximum 20 percent reduction.

While Texas accounts for 9 percent of all DSH payments, it would bear 13 percent of the cuts under the House proposal, which Reps. Gene Green, D-Houston, and Joe Barton, R-Ennis, tried unsuccessfully to derail in committee.

"Granted DSH needs to be reformed, but it could be reformed by spreading the pain to everyone," Green said. "It's just ludicrous what's happening."

Rep. Ken Bentsen, D-Houston, termed the plan a "punitive measure" against high-use DSH states. "It's simply unfair to say that a state like Texas is going to see its funding in this case cut by two times as much as the state of California," said Bentsen, whose district is home to the Texas Medical Center.

Nearly 160 Texas hospitals receive DSH payments. "To quite a few, it is critical to survival," Texas Hospital Association official Joe DaSilva said, predicting that some hospitals, particularly in rural areas, would close their doors if the funding dries up.

Texas Health and Human Services Commission spokesman Charles Stuart said the possibility of DSH reductions "is something of real concern to us for the obvious reason: These are the hospitals that are the safety-net hospitals in the state."

Loss of the DSH money would translate into higher local taxes in counties with public hospitals, and in other cases could result in reduced service or denial of care, Bentsen and Green predicted. Unreimbursed costs also could be shifted to insured patients, they and others said.

Republican authors of the plan defend the cuts as necessary to achieve a balanced budget. The $15.3 billion in Medicaid reductions are offset by $16 billion in new funding for childrens' health care under KidCare, they said.

Although Texas would lose $929 million in DSH money, it would get $1.6 billion under KidCare. The childrens' funding would go to many of the hospitals serving poor patients, the GOP aides said.

"What we've done is tried to structure it in such a way that no state is going to lose money. And we've done that," said House Commerce Committee spokesman Mike Collins.

But critics of the plan note the KidCare money can't be used for anyone over 19. And, adult indigent care typically is far costlier than child health care, they said.

Bentsen for one remains hopeful that the cuts can be averted - perhaps with some muscle-flexing by the White House. "I feel pretty confident that we can get a change in the formula before the bill is signed into law," he said. "I don't believe the administration would accept this." Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
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