New Jersey Assembly holds hearing on plan for Medicaid cuts

How to trim the billions of dollars New Jersey spends on health care for the poor, elderly, and disabled is one of the biggest challenges for Gov. Christie's proposed $29.4 billion state budget.

Solutions offered by the administration Tuesday, in the first budget hearing to address health services, attracted little support from some members of the Assembly Budget Committee and other groups.

Christie has pressed for changes to Medicaid, the federal-state program that provides health care for 1.3 million disabled, senior, and low-income New Jerseyans. The administration wants the federal government to grant it a waiver the state says would yield a $300 million savings by allowing it to more flexibly administer the plan.

New Jersey has not yet applied for the waiver, however, and state health officials shared few details Tuesday about the proposed Medicaid changes.

"It's very alarming, this far along in the process, that they can't answer simple questions," Budget Committee Chairman Louis D. Greenwald (D., Camden) said after testimony from Mary O'Dowd, the Health and Senior Services acting commissioner, and Human Services Commissioner Jennifer Velez.

When the application is finalized, there will be a public review of the proposed revisions, Velez told lawmakers. No one currently receiving Medicaid would lose it, she said.

Questioned by Greenwald on how the administration could be sure it would receive the waiver, so critical to the budget, Velez noted that a letter from the federal government had promised an accelerated review for states looking to change their Medicaid programs.

"I would like to brief you when we get the details," she said.

Medicaid expenses are expected to total $10.7 billion in New Jersey this year. The state's portion is $4.6 billion, or about 16 percent of its budget, and the governor has expressed concern that spending on the program is "out of control."

The administration said it would seek Medicaid savings by moving blind, elderly, and disabled recipients into managed-care programs, and by increasing access to home- and community-based services for people requiring long-term medical care.

The state budget for fiscal 2012, introduced by Christie in February, must be approved by the Legislature and adopted by July 1.

Health-care advocates at the Assembly hearing voiced concern over other proposals in the plan, saying they could reduce access to care for the needy and squeeze health-care providers already coping with an influx of low-income patients.

Reimbursement rates to nursing homes, which make up a substantial amount of Medicaid spending, would be cut 3 percent under the Christie plan. In addition, the budget would no longer compensate the facilities if they held a patient's bed open while he or she was temporarily away.

Andrew Aronson of the Nursing Home Alliance said a cut in reimbursement for nursing homes, which offer less costly treatment than hospitals, would discourage them from taking Medicaid patients.

The spending plan also would reduce the administrative reimbursement rate for nursing facilities that provide long-term specialized care for a savings of $4.7 million.

Voorhees Pediatric Facility, for example, would lose $1.2 million, according to the Health Care Association of New Jersey. Silver Care Center in Cherry Hill would lose $920,940.

Some facilities would have to recalculate how many Medicaid beneficiaries beyond the required 45 percent they could afford to accept, said Paul Langevin, president of the association. Others could be forced to close, he said.

The budget also would institute a $3 daily co-pay - or a maximum $25 a month - for adult medical day-care services, which some feared could result in fewer patients' seeking treatment.

O'Dowd said the administration had been forced to make difficult decisions.

Given the alternative of eliminating services or putting people on waiting lists for day care, she said, requiring the co-pay was a "more reasonable approach."

Reimbursements for special-care nursing homes would be reduced because the facilities have sought compensation for administrative costs far higher than those of regular nursing homes, O'Dowd said.