Despite Cuts, Governor's Budget Proposal Has Bright Spots for Primary Care

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This week, Governor Snyder released budget recommendations for Fiscal Years (FY) 2016 and 2017. While some of the recommendations raised concerns within the health care community—most notably, an 8.9 percent cut to Graduate Medical Education funding for the current year—there were bright spots for primary care providers.

The proposed budget for FY 16 includes, among other things, continued funding for the Medicaid Primary Care Fee Uplift, as well as the Michigan Primary Care Loan Repayment program – both welcomed developments for Family Physicians and Family Medicine residents and students in Michigan.

Now the Legislature gets to work, beginning with House and Senate Appropriations subcommittee hearings to debate the respective chambers’ recommendations for FY 16 as well as proposals to address the current year’s budget shortfall. Efforts to address the shortfall kicked off Thursday, February 12, with approval by the House and Senate Appropriations Committees of the Governor's Executive Order to trim $102.9 million from the current budget. The House Appropriations Committee separately approved two negative supplemental funding packages on top of the Executive Order to further close the funding gap.

The Governor's budget proposal for FY 16 includes the following:

  • continued funding for the Healthy Michigan plan at around $3.2 billion (all Federal dollars).
  • a $5 million cut to GME—the primary state funding stream for physician residency programs in Michigan—in the current year, bringing total state funding to $51.1 million. The administration also floated a proposal to raise revenue for the program in the upcoming fiscal year through a hospital provider tax. MAFP consistently advocates for continued funding for GME in concert with reforms that bring more transparency and accountability to the system, including shifting more training opportunities to community-based settings. Noticeably absent from the Governor’s budget was funding for the ‘MiDocs’ consortium created last year to assess potential avenues for GME reform.
  • $25 million in state funding to continue the Medicaid Primary Care Fee Uplift, which increases Medicaid reimbursement rates to primary care providers to around 80 percent of Medicare rates.
  • $3.1 million for the Essential Health Provider Program, or Michigan’s Primary Care Loan Repayment program (figure includes a mix of federal, state and local dollars).
  • $23 million to increase access to dental care for 613,000 adult Medicaid recipients.
  • an additional $21.8 million to expand the Healthy Kids Dental program to Wayne, Oakland and Kent counties for children ages 0-8.
  • $2.5 million for university autism programs focused on supporting programs at Eastern Michigan University, Western Michigan University, Oakland University, Central Michigan University, and Michigan State University.
  • $1.9 million to implement the findings of the Mental Health and Wellness Commission for the residential treatment of youth. (The budget reduces current year funding for new initiatives associated with the commission by $2.9 million.)
  • a reduction in special Medicaid payments to rural and sole community hospitals by $2 million (bringing total state spending to $10 million).
  • a proposal to increase the Health Insurance Claims Assessment (HICA) tax from 0.75 percent to l.3 percent to cover the shortfall in revenue to the Medicaid program as a result of lower than projected tax receipts.

In the News

Michigan Gov. Rick Snyder's proposed spending cuts total $207 million, may lead to some layoffs – from MLive

Snyder budget a mixed bag for medical field  from the Detroit News

Snyder's proposed state budget cuts rural hospitals, graduate medical education funding  from Crain's Detroit