PROVIDENCE –– Governor Carcieri wants Rhode Island’s community hospitals, some already teetering on the edge of financial disaster, to give up nearly $32 million in the coming months to help solve the state government’s financial troubles.

The money, which was supposed to help reimburse hospitals that give free care to the uninsured, is part of Carcieri’s $357-million midyear budget repair plan that is packed with unpopular cuts.

But lawmakers, hospital administrators and even the health insurance industry attacked the hospital cut yesterday as irresponsible and dangerous.

“This is going to honestly destroy us,” South County Hospital president Louis R. Giancola told the House Finance Committee. His institution, already facing a credit-rating drop, would lose more than $900,000 and likely lay off 20 employees under Carcieri’s plan.

Other hospitals would fare worse.

St. Joseph’s Health Services, which runs Our Lady of Fatima Hospital in North Providence and South Providence’s St. Joseph Hospital for Specialty Care, stands to lose $1.7 million, according to CEO John M. Fogarty. Even without the cut, St. Joseph’s was facing an annual operating loss of $2 million.

“In our view, this move represents a health policy decision, not a budgetary decision,” Fogarty said. “Survival of our hospital, a provider of last resort, as well as others will be immediately jeopardized.”

The General Assembly will ultimately decide whether to allow the cuts to stand. But if the legislature reverses Carcieri’s proposal, it must find another way to fill the hole, which represents $17.7 million of state-only funds.

House Finance Committee Chairman Steven M. Costantino, considered the architect of the Assembly’s budget plan, said he hadn’t decided how to proceed. But he blasted the Carcieri administration for asking Rhode Island’s struggling hospitals to help fix problems caused largely by overspending at state departments under the governor’s control.

“The hospitals had nothing to do with that,” Costantino said, before firing several pointed questions at Department of Human Services Director Gary Alexander, a member of Carcieri’s Cabinet.

“What happens to uncompensated care in the state of Rhode Island?” asked a frustrated Costantino, adding that the cut “might be catastrophic for hospitals.”

Alexander did not immediately answer. Costantino repeated the question. Again, there was no answer.

Earlier in the hearing, Alexander defended the proposal by citing the state’s difficult budget situation.

“This wasn’t an optimal thing to do,” he said. “There is an ongoing battle right now with every industry regarding the amount of money available.”

Rhode Island’s community hospitals spent an estimated $130 million last year for “uncompensated care,” the cost of treating people without insurance, or those who don’t pay their medical bills, according to Hospital Association of Rhode Island president Edward J. Quinlan.

Rhode Island’s public hospitals do not have the right to refuse patients without insurance.

Licensing regulations require that hospitals provide free care to uninsured people whose incomes are below 200 percent of the federal poverty level (or $35,200 for a family of three) and discounted care on a sliding scale to uninsured people with incomes between 200 and 300 percent of the poverty level.

In June, Carcieri signed a budget that gave hospitals $105 million in uncompensated care payments, and another $31 million in related funding. But last week, Carcieri proposed taking back $32 million.

A statement released yesterday by Blue Cross & Blue Shield of Rhode Island warns that the governor’s move could have unintended consequences.

Blue Cross “is fully aware of the unprecedented financial challenge that faces Rhode Island today,” lobbyist Shawn R. Donahue said in the statement. “However, [the proposal] could significantly undermine the fiscal stability of Rhode Island’s hospitals and will certainly make commercial health-care coverage less accessible and less affordable in the future.”

Posted: Saturday, January 17, 2009

Source: The Providence Journal

Author: Steve Peoples 

Email : speoples@projo.com

Link: http://www.projo.com/health/content/BUDGET_CUTS.1_01-17-09_4BD0AKL_v24.3e37086.html

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