The millions of dollars of federal Medicaid money supposed to help ease the burden of state funding cuts might not come through after all. It means deep reductions are on the way for doctors, hospitals and nursing homes.
State lawmakers and Medicaid providers knew this could be a possibility way back in March when the General Assembly passed the budget. Even though legislators did not count on the cash, losing it is not the result anyone wanted.
When state lawmakers approved their budget this spring they called for deep cuts to Virginia Medicaid programs, unless Congress approved millions in federal assistance from a program called FMAP, or Federal Medical Assistance Percentages.
"The budget says we will cut the Medicaid providers unless this FMAP money materializes," said 17th District Senator Edd Houck (D).
The thought then was that the money, $417 million of it, would come through.
"We felt very confident it was going to be," Houck explained. "It's only been as of late that it's deteriorated in Congress and now it looks very questionable whether it's going to happen or not."
Thursday, Virginia Finance Secretary Ric Brown told top legislative budget writers they should prepare for the deeper cuts, cuts that will come on top of new spending, to prep Virginia for the federal health care law.
"You all didn't know the details at the time of health care reform and some of those details are still coming to light," said Brown.
Because lawmakers did not count the FMAP money as a sure thing, they will not have to adjust the state budget this year. But they say it presents the worst-case scenario to health care providers.
"People in Virginia who depend on Medicaid, the clients and providers, will be hurt if this money does not come forward," said Houck.
Some Democrats say they want Governor Bob McDonnell to more forcefully advocate for the cash.
"Right now it's just one contradiction after another as far as I can tell," said 32nd District Senator Janet Howell (D).
Thursday afternoon, a McDonnell spokesman said that the governor does support this FMAP funding. But the spokesman also said the governor does understand the broader concerns about federal spending that have caused the hold-up in Congress.