Hospitals Set to Lose Medicaid Millions

A Medicaid rule proposed by the Bush administration could cost hospitals millions of dollars a year.

"If this rule is allowed to go into effect, hospitals across the…country will be forced to dramatically reduce services, and in some cases hospitals will close," Wayne NeSmith, president of the Florida Hospital Association, said in a statement.

Since the Bush administration is changing the rules, and not the law, the proposed cuts will take effect this year unless Congress intervenes. Hospitals that treat the most Medicaid patients would feel the brunt of the cuts.

The proposal from the U.S. Centers for Medicare and Medicaid Services would change the complex formulas used to reimburse hospitals that are based on how many poor and uninsured patients they serve.  Specifically, the Bush administration wants to limit how states use local government dollars as a basis to draw down money from the federal government.