The U.S. Department of Health and Human Services has designated $2.5 million in stimulus funding for Arizona’s hospitals, one week after the Arizona Legislature restored some funds for the state’s Medicaid program.
In February, the Legislature cut $13 million from Arizona Health Care Cost Containment System funds that helped compensate hospitals for the care of uninsured patients and close the gap between the cost of caring for AHCCCS patients and AHCCCS reimbursements. The cut cost the state $26 million in federal funding because the federal government provided $2 for every $1 the state spent.
In addition, the state eliminated $7 million in AHCCCS funds for graduate medical education, which would have cost the state $14 million in federal matching funds and was predicted to eliminate more than 100 residency positions statewide.
As part of the federal stimulus package, the federal match increased to $3 for every $1 the state contributed to help pay for health care for uninsured or AHCCCS patients, so called “disproportionate share” funds.
On March 12 the state Legislature restored $8.9 million in disproportionate share funds, giving hospitals a total of $35.6 million. The state also restored $5.5 million to graduate medical education, giving hospitals $16.5 million.
The additional money made available by Health and Human Services is for hospitals receiving disproportionate share funding and it is up to the Legislature to decide if it will be used, said Laurie Liles, senior vice president of public affairs for the Arizona Hospital and Healthcare Association.
She said Arizona would also need to appropriate about $830,000 in state matching funds to get the money.
University Medical Center’s chief financial officer Kevin Burns said the restoration of funds “certainly helps.”
He said the hospital has been under a hiring freeze since the budget cuts and has been making an effort to preserve jobs.
“The hospital is bracing for whatever cuts may come in the 2010 fiscal year, which starts in July, Burns said.
“It does put a lot of pressure on what we do when the state is possibly discussing further future cuts,” he said.
On the Web
To see a complete list of the revised disproportionate share allotments that include additional funding provided through the Recovery Act, visit www.hhs.gov/recovery/cms/dshstates.html.