State health agency slashes budget

The Department of Community Health, or DCH, has released its revised 2009 budget. The move comes following Governor Sonny Perdue’s order that all state departments trim administrative costs and present new budgets reflecting cuts of six, eight and ten percent. That's because Georgia’s revenue shortfall this fiscal year is expected to be at least one point six billion dollars.

DCH has an annual budget of 12-billion dollars. On the administrative side, cuts at 6, 8 and 10 percent would amount to 7 million, 9 million and 12 million dollars respectively. Hardest hit will be new programs such as the Safety Net Program for new clinics.

The Governor has also ordered DCH to reduce its Medicaid and PeachCare budgets as well, by five percent each.

DCH Commissioner Dr. Rhonda Meadows did NOT recommend the cuts come from eligibility and benefits for Medicaid and PeachCare members. Instead the cuts will come by delaying payment increases to hospitals and medical providers, as well as delaying capital improvements at nursing homes.

"This was our hardest challenge. As you know, these are the programs that care of those vulnerable populations that I described earlier. With respect to Medicaid and PeachCare, the reduction direction was that we reduce the benefit budget by 5 percent which amounts to a reduction of $113.8 million dollars each year."

For years, DCH has run a budget surplus and returned money to the general treasury. And, the agency says it has been able to recover money by going after fraudulent payments. However, with the proposed cuts, the agency expects Medicaid will have a budget deficit of $224 million dollars at the start of fiscal year 2010. PeachCare’s budget surplus is expected to fall from $14 million dollars in fiscal year 2009 to $1.7 million in 2010.