Budget Committee Increases State Medicaid DSH Investment by $25 Million

WHA graduate medical education, rural workforce priorities added into state budget

May 26, 2017

In its May 25 meeting, the state’s budget-writing Joint Finance Committee approved significant WHA-supported investments in hospital Medicaid reimbursement through the Disproportionate Share Hospital (DSH) program and a newly created supplemental program for certain rural critical access hospitals.

“This budget motion shows our commitment to helping our neediest Medicaid patients,” said Sen. Leah Vukmir (R-Wauwatosa), a lead author of the Committee’s budget motion (i.e. amendment). “We increased reimbursement by $25 million into the DSH program. This is an important program—very important to me; I represent a lot of hospitals in my district.” 

In their version of the state budget, the Joint Finance Committee provides $25 million in additional state resources to the Medicaid DSH program ($62 million increase when including federal funds) over the biennium and provides an additional $1.2 million for a new Rural Critical Care supplement—both top priorities of WHA. In total, the proposed budget bill would now provide $137 million over the two-year budget period for Medicaid DSH and Rural Critical Care supplement hospitals, if the Joint Finance Committee version of the budget bill becomes law. 

“This budget motion really shows that we were listening to the people that came out to testify at the public hearings,” said Vukmir. In coordination with WHA, nearly 50 hospital leaders submitted written testimony to the Joint Finance Committee, along with hospital leaders testifying in-person on key priorities including Medicaid reimbursement and health care workforce investments at five of the six public hearings held across the state.

“WHA applauds members of Wisconsin’s Joint Finance Committee who supported a significant increase in Wisconsin’s Medicaid DSH program, providing payments to hospitals serving Wisconsin citizens living in poverty,” said WHA President/CEO Eric Borgerding. “We appreciate the action today to increase hospital reimbursement in Medicaid, but also the foresight of the Committee to expand successful physician residency programs and invest in innovative workforce training programs for advanced practice clinicians and allied health professionals.”

WHA also encouraged the Committee to increase Wisconsin’s graduate medical education (GME) grant program by $1.5 million, which was included in the Joint Finance Committee’s version of the state budget. This funding would provide matching grant funds, up to $750,000, to establish new GME programs in Wisconsin in high-need specialties including family medicine, general surgery and psychiatry. To date, the program has already created seven new residency programs and will train at least 79 new residents in Wisconsin—a $22 million public and private investment in GME since 2013.

The Committee also incorporated into the budget two proposals that provide training grants for advanced practice clinician training rotations and allied health professional training consortia. WHA worked with several rural state lawmakers as part of the Rural Wisconsin Initiative to develop these innovative workforce development proposals. The proposed budget amendment provides $1 million annually for these new training programs.

Finally, the Joint Finance Committee also budgeted $2.25 million in state and federal funds to implement an intensive care coordination pilot program in Medicaid, providing payments to hospitals and health systems that implement care coordination programs for super-utilizers of a hospital emergency department. This budget item was a Medicaid reform proposal discussed by over 600 hospital supporters as part of WHA’s 2017 Advocacy Day, along with Medicaid DSH, the Rural Critical Care supplement program and all of the workforce initiatives above.

The biennial budget bill continues to be acted upon by the Joint Finance Committee and will likely continue through at least the middle of June. The bill will then move onto both chambers of the Legislature for approval, where identical bills need to be approved by the Senate and the Assembly before moving on to Gov. Scott Walker for his review and approval.

This story originally appeared in the May 26, 2017 edition of WHA Newsletter