U.S. hospitals worried over Medicaid cuts

An association of U.S. hospitals says it is very concerned by President Barack Obama's proposal to cut Medicaid and Medicare graduate medical education. The National Association of Public Hospitals and Health Systems in Washington says the president's proposal would shift heavy cost burdens onto states, limiting their ability to fund Medicaid and potentially hurting the nearly 60 million Americans who rely on Medicaid for their healthcare. Dr. Bruce Siegel, president and chief executive officer of the organization, says the cuts in provider taxes do not increase efficiency or performance -- they are simply a cost shift onto states. "Provider taxes, also known as provider assessments, are legitimate tax revenues used by states to help finance and maintain a stable, functioning Medicaid program," Siegel says in a statement. "The president's proposal would reduce states' flexibility in financing their Medicaid program, leading states to make harmful cuts to their Medicaid programs, either through cuts to Medicaid eligibility, benefits or cuts to already below-cost reimbursement to providers. We urge Congress and the joint committee to reject this proposal." The president's blended Federal Medical Assistance Percentages -- the percentage rates used to determine the matching funds rate allocated annually to certain U.S. medical and social service programs -- includes an across-the-board cut to the federal match states receive for Medicaid coverage. By reducing federal spending on Medicaid, the proposal would force cash-strapped states to make up the difference, Siegel says.