The General Assembly renewed the state’s hospital provider fee to fund Medicaid in the early weeks of the 2013 session.The fee was set to expire this June. By renewing the fee four more years, Georgia’s lawmakers continue a vitally import source of revenue. The fee raises money that will pay doctors, hospitals and other providers who serve Medicaid and PeachCare patients. More than $240 million per year from the hospital fee secures roughly $500 million in federal money that flows into Georgia’s health care system.

Despite the extension, the 2014 budget still relies too much on substantial one-time funding to pay projected Medicaid and PeachCare costs. The budget uses $56 million in one-time funding from the Tobacco Master Settlement to fund Medicaid and PeachCare, which allows lawmakers to restore money to Medicaid and PeachCare providers that were cut in the governor’s original budget delivered in January. This funding will need to be replaces with a more stable funding source in 2015.

The budget the Legislature sent to the governor’s desk last week increased the reliance on tobacco settlement money to eliminate Medicaid and PeachCare cuts to providers originally proposed by the governor. Otherwise, the final budget makes only a handful of notable changes to the governor’s original budget. The Legislature’s budget recommendation includes several small funding additions, including:

  • It adds $330,374 for 20 more Independent Care Waiver Program slots.
  • Legislators added $254,350 to increase payments to rural hospitals and federally-qualified health centers.
  • Legislators added $300,000 to establish a quality incentive program for the SOURCE (Service Options using Resources in a Community Environment) program.

In addition, the Legislature’s recommended budget makes the following reductions:

  • It subtracts $1 million for projected enrollment and cost growth for Medicaid and PeachCare.
  • It assumes $10.5 million in savings from prior year hospital cost settlements
  • It creates $1.3 million in state savings by shifting some Medicaid enrollees to Veterans Administration-funded services when possible.

The Legislature passed two bills designed to facilitate greater legislative oversight of Medicaid, PeachCare, and the State Health Benefit Plan, which is also administered by the Georgia Department of Community Health. The two bills – Senate Bill 62 (SB 62) and House Resolution 107 (HR 107) – each create separate newoversight committees. The Joint Study Committee on Medicaid Reform, created by HR 107, includes six members each from the Senate and the House as well as six members appointed by thegovernor. The Federal and State Funded Health Care Financing Programs Overview Committee, created by SB 62, is composed of five members from each chamber. 

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