Tomorrow, we’ll see what happens with what could be a disaster of epic proportions. Alabama Medicaid, whose travails regarding inadequate funding have been well documented, may go completely broke at midnight tonight. At odds are the Governor who is unable to generate an acceptable revenue stream in the general funds to cover a required match for Medicaid dollars (the feds contribute $3 for every $1 we put up), and both the Bush administration and the Obama administration who are unwilling to accept the state’s definition of “match” as being an actual match. As chronicled by the Birmingham news earlier this year, the hospitals actually put a bit of money ($800 million) to try to head off the disaster but the governor and the feds (both Democrat and Republican) don’t see eye to eye on whether the funding source is actual or is a little bit too evanescent (i.e. will exist only to draw down federal dollars).

In 2004 the seeds of the crisis were planted when the state was unwilling to consider a switch from intragovernmental transfers (no real dollars placed, one time resources used) to another method of matching funds that CMS found more acceptable. It was the hospitals, through the Alabama Hospital Association, that put together what they thought was a formula to get around the problems identified by CMS in Alabama’s previous scheme.  

Although unable to give particulars, Commissioner Steckel’s impression of the problem, as presented to the legislature, is as follows: 

“Simply put, the federal government has changed the rules on how hospitals calculate costs, particularly in how they define uncompensated care.”

In her budget presentation this year, Commissioner Steckel pointed out what Medicaid does in Alabama

  • 20%, or nearly 1 million Alabama citizens are eligible for some type of Medicaid coverage
  • Nearly half of all births, or approximately 30,000 births each year, are paid for by Medicaid.
  • 38% of Alabama’s children depend on Medicaid for healthcare coverage.
  • 12.8% of Alabama’s elderly residents are Medicaid eligible.
  • 71% of the nursing home residents in participating facilities are Medicaid eligible.
  • More than 14,000 elderly and disabled individuals participate in one of six home and community-based waivers;
  • Medicaid pays for over 7 million prescriptions a year.

Governor Riley went back up to D. C. earlier this week  to try to rectify the situation. I guess we find out tomorrow whether that misunderstanding was settled and these services can continue or not.