The U.S. Department of Health & Human Services has approved a 5 percent cut in Medicaid payments for the state of Arizona, reports The Arizona Republic.
The cut is the second one in Arizona in a year, following a 5 percent cut approved last spring. The reduction, which is projected to save Arizona $95 million a year, is retroactive to Oct. 1. Medicaid payment rates have been frozen since 2007.
As a result of the reductions and freezes, the Grand Canyon State's hospitals are paid about 70 percent of what it costs to provide their care, according to the Arizona Hospital and Healthcare Association.
"The cumulative effect of all of these cuts have really begun to take their toll on hospitals," Pete Wertheim, a vice president with the Arizona Hospital and Healthcare Association, told the Republic. Altogether, the association estimates the hospitals have lost $1.3 billion in Medicaid revenue over the past three years as a result of payment reductions and the tightening of eligibility guidelines.
The federal government is still mulling a request by Arizona to limit hospital stays for Medicaid patients to 25 days.