Legislature Moves Forward on State Healthcare Budget

Posted on September 19, 2019

Capitol building

On Sept. 19, the Joint House and Senate Conference Committee on Health and Human Services reported its fiscal year (FY) 2020 budget recommendation, which takes significant steps to improve Medicaid reimbursement rates paid to hospitals in Michigan.

Due to MHA advocacy efforts, the conference committee proposal includes more than $20.2 million in additional general fund revenue for hospital services than the FY 2020 executive budget proposal from the governor. The additional funds will be used to increase Medicaid outpatient fee screens for Michigan hospitals, and $6.4 million of that general fund revenue will provide further improvements to reimbursement rates for critical access hospitals. These combined appropriations are estimated to provide $134 million to Michigan hospitals. 

The MHA worked with key lawmakers, state officials and the governor’s office this summer to address the challenges that inadequate outpatient Medicaid reimbursement rates place on all hospitals in Michigan, particularly the small and rural. The 7% increase in outpatient Medicaid fee screens included in the Legislature’s proposal will create a more sustainable, long-term funding environment for hospitals and reflects the first outpatient Medicaid fee screen increase since 2002. 

The conference committee proposal maintains state support for the Rural Access Pool and Obstetrics Stabilization Fund at agreed-upon levels and continues the MHA Board-supported multiyear budget agreement. Other key provisions in the proposal include:

  • The Healthy Michigan Plan is fully funded to reflect the increased state match requirements.
  • Medicaid reimbursement rates are increased by 15% for pediatric inpatient psychiatric care.
  • A behavioral health workgroup would be established to determine an adequate reimbursement methodology for Medicaid inpatient psychiatric hospital care. 

The House and Senate are expected to vote on the budget during the week of Sept. 23 before sending it to the governor’s desk for final approval.

The MHA applauds the conference committee for crafting a budget that improves the support provided to Michigan’s healthcare community and the patients and families it serves. The association will work with the Legislature and governor to finalize the budget and will keep members apprised as negotiations continue. Members with questions may contact Adam Carlson at the MHA.


  • Legislature Moves Forward on State Healthcare Budget

Tags: behavioral health, Medicaid, budget, Healthy Michigan Plan, advocacy, critical access hospitals, 2020 State Healthcare Budget, small and rural hospitals

Posted in: Issues in Healthcare, Top Issues - Healthcare

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