Executive Budget Recommendation Protects Hospital Funding

Posted on February 06, 2020

The fiscal year (FY) 2021 executive budget recommendation was presented to the Legislature Feb. 6 by State Budget Director Chris Kolb, and a FY 2020 supplemental budget request was also released.

 State Budget Director Chris Kolb presents the FY 2021 executive budget recommendation to the Legislature. While the state is facing flat general fund revenue and $600 million in increased ongoing fund costs in the FY 2021 budget, the administration presented a recommendation that addresses these challenges without making significant cuts to Michigan hospitals. Key elements in the proposals for FY 2020 and 2021 are as follows:

  • As a direct result of the MHA’s advocacy efforts, the governor proposed the first outpatient Medicaid fee increase since 2002, which would begin April 1, 2020, and extend through the FY 2021 budget. If approved by the Legislature and the Centers for Medicare & Medicaid Services, this is projected to result in nearly $300 million in net new revenue to hospitals from April 1, 2020, to Sept. 30, 2021 and will help address the challenges that inadequate outpatient Medicaid reimbursement rates place on all hospitals in Michigan, particularly the small and rural.
  • The executive budget recommendation protects Critical Access Hospital funding, the Rural Access Pool and Obstetrics Stabilization Fund from reductions.
  • Disproportionate share hospital payments and graduate medical education funding are also protected from reductions, continuing to reflect the MHA’s 2016 budget deal.
  • The state’s obligation for Michigan’s Medicaid expansion, the Healthy Michigan Plan, is fully funded. In addition, the executive recommendation includes $25 million in funding for extended postpartum coverage of 12 months for new moms who rely on Medicaid, which follows the announcement in the governor’s Jan. 29 State of the State address. The MHA will continue to work with this and future administrations and legislatures to ensure its protection at the state and federal levels.

The MHA will continue to keep members apprised as budget negotiations continue with the Legislature this spring. As outlined by a media statement issued by MHA CEO Brian Peters, the MHA will work with legislators and state officials on improving maternal health in the state while protecting our long-standing priorities to ensure every Michigander continues to receive the highest quality healthcare in Michigan’s hospitals.  Members with questions may contact Adam Carlson at the MHA.


  • Executive Budget Recommendation Protects Hospital Funding

Tags: CMS, state budget, Rural Access Pool, Adam Carlson, CAH, OB stabilization

Posted in: Issues in Healthcare, Top Issues - Healthcare

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