Grady says Perdue’s Medicaid cuts jeopardize hospital

Grady Health System said Friday that it could run out of cash this summer if Gov. Sonny Perdue’s proposed Medicaid cuts are approved.

The financially stressed system would take an estimated $26 million hit under the Medicaid budget cuts for the next fiscal year, said Grady spokesman Matt Gove. The planned reductions, he said, could jeopardize the line of credit for the safety-net organization, which includes Grady Memorial Hospital.

CEO Michael Young outlined the financial impact on Grady to a state legislative hearing Friday.

Perdue’s budget plan would halt a scheduled payment hike to hospitals, doctors and other medical providers for Medicaid services. Hospitals would also get a 10 percent reimbursement cut; physicians face a 6 percent decrease. The Perdue plan also would remove about $35 million designated for the state’s trauma care network.

Children’s Healthcare of Atlanta said the Medicaid cuts would reduce its own revenues by an estimated $30 million.

Perdue’s office has said hospitals could avoid payment cuts if the governor’s plan to tax their revenues was enacted. The tax, coupled with a levy on health insurers, would fill a Medicaid shortfall, increase pay to medical providers, and inject funds into the trauma care system. Hospitals and insurers have opposed the tax.

“We proposed a reasonable solution to raise money and distribute it back out,” said Perdue spokesman Bert Brantley.