By Cy Ryan (contact)

Fri, Sep 5, 2008 (12:50 p.m.)

CARSON CITY -- Hospitals will see their Medicaid reimbursements reduced by 5 percent, as the state Division of Health Care Financing & Policy adjusts to the budget cuts ordered by Gov. Jim Gibbons.

The hospital rate reduction will save $5.8 million, Division of Health Care Financing & Policy officials said at a public hearing today.

The cuts will take effect Sept. 1.

“This is going to have a significant impact,” says Bill Welch, executive director of the Nevada Hospital Association. The state is shifting the cost to the medical provider, who will have to pass it on to the patient, he said.

University Medical Center in Las Vegas will probably have to restrict services to Medicaid patients. Kathy Silver, chief executive officer for UMC, says the only thing it can do is “to reduce access.”

While the reductions to will average 5 percent, it will hit certain services higher at UMC, Silver said. For instance, costs will go up 24 percent at the unit that treats babies which high level ailments.

She said a plan to cut expenses will have to be developed to present to the board of directors probably within the next month.

Division Administrator Chuck Duarte said these are all part of the 3.3 percent budget reductions ordered by the governor. Already cut were services in the Check-Up program for children. It capped dental services to $600 a year and eliminated orthodontic and optical services.

The division is going to hold a hearing Sept. 9 to eliminate $420,000 to hospitals for training graduate students.

At the hearing, it was explained that Medicaid won’t be paying for eye glasses for adults and seniors, resulting in a $1.1 million saving this fiscal year, half of that in state rates.

Rates for obstetric services will be cut 28 percent. They were raised by 28 percent in 2002 when the medical malpractice crisis hit and those rates are now being reduced to those who provide the service.

Duarte said the state will have to monitor the impact of these reductions and it could mean sending some patients out of state.

Welch said the potential loss of revenue to the hospitals could reach $19 million. And Medicaid, he said, pays only 70 percent of the cost for the care of these patients.

Silver said, “This is going to be a real challenge for all of us.”

In addition to the state reductions, there may be other cuts. Clark and Washoe counties tie their payments to hospitals for treatment of poor people to the Medicaid rate. So there will be a reduction there. And so do some of the managed care agencies. That will mean a further loss, said Welch.

Cy Ryan may be reached at (775) 687 5032 or cy@lasvegassun.com.