SPOTLIGHT: Medicaid pay cuts drive home need to reach out to commercial business

This Friday the Florida Legislature is expected to pass a new state budget that includes a 7 percent Medicaid rate cut for most hospitals, reports Health News Florida. On the "positive" side, the 2010-11 budget, which takes effect July 1, limits the rate reduction to 3.5 percent for rural hospitals, Miami Children's Hospital and All Children's Hospital in Tampa and includes the option to reduce the general rate cut to 5 percent if the state obtains increased federal matching funds. The situation in Florida obviously isn't unique. Nationwide, hospitals that participate in Medicaid programs are dealing with threatened or realized rate reductions. What all of this means, reports FierceHealthFinance's Caralyn Davis, is that hospitals need to develop an innovative strategic plan that grows their often-sagging commercial business so they can achieve revenue sustainability. Commentary