The constitutional amendment, if approved, would transfer $145.8 million per year for three years out of the Alabama Trust Fund into the General Fund. While the transfer would support a number of state departments, it primarily affects Medicaid.
Coosa Valley Medical Center Chief Executive Officer Glenn Sisk said the hospital’s Medicaid heavy services, which include pediatrics, newborn deliveries and geriatrics, are threatened if the amendment does not pass.
“While we would continue to do business, we would have to very carefully evaluate the levels of services we offer in those areas,” Sisk said. “The real impact is on small business — the physicians’ offices, pharmacies and others that have 40 to 60 percent of their business being Medicaid.”
Alabama hospitals and physicians have already taken a 10 percent cut in Medicaid reimbursements, and if the amendment fails, they will face at least a 17 percent cut. Sisk said that level of reimbursement is unsustainable.
“If this was a long-term issue, a 20 to 30 percent cut in reimbursement, we’d have to either change our services or potentially not be in those lines of business,” he said.
About 18 percent of CVMC’s total business is Medicaid patients. The hospital received reimbursement of 78 cents on the dollar prior to the cut, which would be reinstated with passage, Sisk said.
Other departments affected by the amendment include public safety, emergency services, mental health, human resources and corrections. Passage of the amendment would allow these services to stay at essentially the same level with only a 3 percent budget deficit, Sisk said, and would prevent the loss of an estimated 10,483 jobs.
“This is not necessarily the perfect solution, but it is a Band-Aid approach to sustain us in the short term,” he said. “There doesn’t appear to be much of an appetite in Montgomery or in the United States to raise taxes, and at this point, I’d have to agree with that. This will allow us at least a three-year solution that gives our leadership time to develop a plan that hopefully avoids this kind of decision in the future.”
State Sen. Jerry Fielding said he is 100 percent behind the amendment.
“We passed the budget in May based on a positive result,” he said. “If it fails, then by Oct. 1 (Gov. Robert Bentley) will have to order proration of 12 to 15 percent for a lot of state programs. As for people in Talladega County, it could mean possible layoffs and cutting back on some essential services.”
Fielding said the amendment will have a negligible affect on the trust fund, which currently has $2.5 billion in it.
“The way I understand it is that even if we take this money out, we will still have more in the fund at the end of the three years,” Fielding said. “We’re paying a lot of things out of it now, so it’s not like this is the first time it has been used for the General Fund, and we also have a plan to pay the money back.”
The long-term solution for budget issues is hoped to be solved by an improved economy, Fielding said.
“I think we’re at the bottom of it right now, and the hope is that the economy will have turned around enough in three years to make up for the shortfall in expected tax revenue that got us to this point,” he said. “Three years ago, our budget was $2.4 billion, and now it’s at $1.6 billion. We’ve already cut back so much that to do it any further would make it entirely too difficult for our state agencies to operate.”
Fielding and Sisk both said they expect the amendment to pass, although Sisk said there has been opposition from those who believe the state should find other funding sources.
“The local feedback has been very positive,” he said. “When you explain how our hospital will be affected if this amendment doesn’t pass, it’s not a hard sell.”
Sisk and Fielding will address this topic at a “Community Links” program Sept. 10 at B. B. Comer Library at noon.
Contact Emily Adams at eadams@dailyhome.com.
