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Monday, July 15th 2002

Dear Sen. ________:

On behalf of our nearly 5,000 hospital, health system, network and other health care provider members, the American Hospital Association (AHA) strongly urges the Finance Committee to pass legislation that temporarily increases the Medicaid federal medical assistance percentage (FMAP).

Such legislation is essential to ensuring that the most vulnerable Americans can continue to receive the health care they need.  AHA-supported legislation like S. 2221, sponsored by Senators Rockefeller and Smith, and S. 2570, sponsored by Senators Collins and Nelson, would help ease what is becoming a critical burden for hospitals that serve Medicaid patients.  

For example, Medicaid in year 2000 reimbursed hospitals just 82 cents for each dollar that was provided in care for Medicaid and charity care patients.  No hospital can continue to sustain such losses and still deliver the health care services its community needs.

But things are getting worse.  The dual pressures of declining state revenues and increasing Medicaid enrollment are hurting state programs that already are struggling to meet the health care needs of their citizens.  Because Medicaid accounts for a large proportion of total state spending, it is a likely target for budget cuts.  While many states have avoided cuts this year, there are few alternatives to Medicaid cuts as state finances worsen.  The damage that would be done to an already struggling program would be dramatic, a massive blow for needy patients and the hospitals that serve them.

That is why–-in addition to enacting legislation to stop further cuts and funding shortfalls in Medicaid disproportionate share funding to states-–a temporary increase in FMAP would be an important step toward easing the extraordinary financial crisis in our Medicaid programs.  Our states need help.

We appreciate your consideration of this critically important issue, and look forward to working with you to ensure enactment.


Rick Pollack
Executive Vice President


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