Arizona is still designing a proposed fund for hospitals and other health care providers, with no plan as of now to use it to provide reimbursements for transplants dropped from state Medicaid coverage in a 2010 budget cut, the state’s Medicaid director said Tuesday.
Republican Gov. Jan Brewer’s administration hasn’t yet decided how the proposed reimbursement fund would work, said Tom Betlach, director of the Arizona Health Care Cost Containment System.
Betlach commented during questioning by Sen. Kyrstten Sinema, D-Phoenix, at a hearing on the program’s budget. “As we know, individuals will continue to die until we address that issue,” Sinema said.
Brewer’s budget proposal for the next fiscal year calls for helping close a projected shortfall by dropping Medicaid coverage for 280,000 adults. She would use $50 million of the projected $541.5 million in savings to create a new fund to partially compensate hospitals and other providers for care no longer covered by Medicaid.
“At the end of the day, it’s up to the policymakers to determine what the structure of that uncompensated care pool would look like,” Betlach said.
Arizona, which has seen its revenue drop by a third due to the recession and the collapse of the homebuilding industry, on Oct. 1 reduced Medicaid coverage for some transplants to save $1.4 million.
The transplant cuts were included along with numerous other funding reductions in the state budget enacted last spring for the current fiscal year. Lawmakers cut spending, borrowed, delayed paying bills, raided special funds and used federal stimulus money to close a $2.6 billion shortfall in what is now an $8.5 billion budget.
The Oct. 1 transplant cuts affected approximately 100 people. Two of those people, who were eligible for transplants before coverage ended for some procedures, have since died.
Hospital officials attributed one of the deaths to the coverage change. That person has not been publicly identified. The other person, Phoenix-area resident Mark Price, died from complications from preparation for a bone-marrow transplant that was to be privately funded.
Because some transplants remain covered, the Arizona Health Care Cost Containment System in the current fiscal year will pay for approximately 85 transplants, down from 100, Betlach said.
Democrats and other critics of the transplant cuts have slammed Brewer and the Republican-led Legislature for the coverage reduction, with some recycling “death panel” language used by Republicans in connection with President Barack Obama’s health care overhaul.
The transplant cuts were part of a package of $5 million in reductions of Medicaid services that Arizona provided but that were not required by the federal government.
Coverage was eliminated for bone-marrow transplants involving non-relatives, lung transplants and some heart, liver and pancreas transplants.
AHCCCS officials have said they chose which transplants to cut according to research that indicated the procedures weren’t effective lifesavers. Transplant advocates dispute the state’s data, saying the procedures do save lives. While critics have suggested a variety of funding alternatives to restore the transplant cuts, Brewer has defended the cuts as necessary because the state cannot afford the overall Medicaid program.