Malloy, Fasano continue to spar over Medicaid cuts [Hartford Business Journal]

October 13, 2015

Hartford Business Journal

Claims by Senate Minority Leader Len Fasano (R-North Haven) that Gov. Dannel P. Malloy has made “incorrect and illogical statements” regarding hospitals, the economy and need for budget cuts drew a stinging rebuke from the governor’s spokesman.

Fassano said, “Governor Malloy has defended his drastic cuts to Medicaid by distracting the public by claiming Connecticut hospitals are well off with profits of over $916 million in 2014 and accusing them of complaining about losing a ‘subsidy.’ In reality, pretax hospital profits last year amounted to $591 million. This year, when hospitals are taxed a whopping $556 million, their entire profit will be reduced to $35 million, which will quickly be eaten up by infrastructure and technology improvements that are mandated by the Affordable Care Act.”

Malloy spokesman Devon Puglia said, “It’s pretty extraordinary that the defense is, ‘They only made $591 million last year.’ And that’s as executive compensation soars. Senator Fasano says he wants to save the state money. Really?”

Fassano also said, “…the governor keeps referring to ‘subsidies’ hospitals receive for Medicaid. These are not subsidies or grants hospitals receive to help maintain their business. Rather these funds help pay for services that hospitals provide to the Medicaid population. For every Medicaid covered patient cared for, a hospital on average receives 60 percent of payment for care, thereby taking a loss. So when the state reduces payments further, hospitals’ ability to provide care to Medicaid patients will be directly impacted.”

Puglia said state payments to hospitals have increased significantly over the last decade, even as hospitals see fewer patients without coverage due to Medicaid expansion and the Affordable Care Act. From the 2010 fiscal year to 2014 fiscal year, Puglia supplied statistics showing payments increased from $417.5 million to $916.4 million