The House Health and Welfare Committee has agreed to consider a bill that would whack $39 million from the state Medicaid budget, set new eligibility rules for clients and impose changes in the way health and treatment services are provided, the Associated Press reports. The measure, in the works for weeks, would mean a total cut of roughly $120 million, including lost federal matching funds. Click below for a full report from AP reporter Todd Dvorak.

Medicaid reform bill clears first House hurdle
By TODD DVORAK, Associated Press

BOISE, Idaho (AP) — The House Health and Welfare Committee has agreed to consider a bill that would whack $39 million from the state Medicaid budget, set new eligibility rules for clients and impose changes in the way health and treatment services are provided.

The committee unanimously introduced a bill Wednesday that will play a key role in balancing the 2012 budget and help the state deal with explosive growth in Medicaid, the state and federal program that pays health care costs for the elderly, low-income families and children with disabilities.

Rep. Janice McGeachin, R-Idaho Falls and chairwoman of the committee, said the legislation is designed to reduce health care costs and ease financial strain Medicaid puts on the state budget. But she also said it intends to reform how services are delivered and suspends or discontinues programs that aren't supported by positive results and outcomes.

"We have an opportunity to reform the way we deliver these services," McGeachin told the committee.

McGeachin said the committee next week will hold a public hearing on the bill, similar to the hearings held last month when hundreds of providers, clients and Medicaid supporters filled the halls of the statehouse and urged lawmakers to avoid deep cuts in programs.

But significant changes may be unavoidable as lawmakers look to fill a projected $92 million deficit in the 2012 budget. The budget proposal submitted in January by Gov. C.L. "Butch" Otter recommended $25 million in Medicaid cuts. But the bill advanced Wednesday recommends another $14 million in Medicaid cuts. A $39 million cut in state funds for Medicaid would also translate to a $120 million loss in federal funding, according to the bill.

Savings come from a variety of programs, the majority targeting services for adult clients. For example, the bill would save $4.7 million by freezing statutory rate increases and $2.2 million by reducing the number of hours reimbursed for adults eligible for psychosocial therapy. Cuts are also proposed for adult dental services and adult developmental therapy programs.

Proposed rollbacks and reforms in Medicaid come at a time when more Idaho families and residents are counting on its services to help deal with the economic recession and unemployment.

To account for the increased enrollments and expected drop in the federal match, state budget writers anticipate spending $435 million on Medicaid in 2012, up from the $384 million spent in 2009.

Copyright 2011 The Associated Press.