The director of the state's Medicaid agency told lawmakers today that he thinks cutting what the state pays doctors and hospitals to treat the poor and disabled – as part of an effort to close a state budget shortfall -- will not result in any net job losses.
The agency has proposed saving $125 million by reducing payments to doctors and hospitals next year. Hospitals have estimated a 10 percentage-point cut, which would save an estimated $100 million, would lead to 2,600 lost jobs.
But Health and Human Services director Tony Keck said his experience at his former agency in Louisiana showed that medical providers did not end up slicing jobs once the state cut the rates that it paid them. Likewise, Keck said, he does not think doctors would stop seeing Medicaid patients if paid less.
"It's just not borne out by the facts," Keck told a House health-care budget subcommittee.
Democratic lawmakers were skeptical, noting Keck’s proposal would cut state Medicaid spending by $500 million once federal matching money is included.
"You're saying there is $500 million of excess profit floating around in the system?" asked state Rep. Harry Ott, D-Calhoun.
The agency's revised budget proposal, given to lawmakers Tuesday, also would cut the administrative fees paid to managed-care organizations by $7.2 million a year. Those health-care providers are paid a flat fee to provide care for patients. The agency would reduce the administrative fee to 10.5 percent from 12 percent.