- The Washington Times - Thursday, July 24, 2003

Gov. Robert L. Ehrlich Jr. will make cuts to the state’s Medicaid program to reduce the estimated $1 billion deficit in the upcoming state budget, but he has no plan to lay off any of the employees in the Department of Health and Mental Hygiene, which administers the program, the department’s top official said yesterday.

Health and Mental Hygiene Secretary Nelson J. Sabatini told The Washington Times that roughly $4 billion of the department’s $5 billion annual budget is spent on the Medicaid system. About $2.8 billion of the money comes from the state.

“Medicaid is just not financially sustainable and is going to have to be restructured to make sure poor people still have high-quality, basic health care,” he said.

Mr. Sabatini said he will bring the system under control by cutting programs and benefits and by collecting more than $10 million he says is owed by the federal government.

“We should be sending them a bill for their share,” he said. “We discovered when we carry a very large backlog, if we let it get too large we lose it.”

The 38-year-old Medicaid system provides medical and health-related services to low-income people and families. Guidelines for the federal-state entitlement program are set by states. Among the poor who qualify for assistance are pregnant women, children younger than 6 and some recipients of adoption or foster-care assistance.

When a patient sends the state a bill for services such as a breast examination, officials submit the forms to the federal government, which reimburses half of the cost. The state has two years to claim such reimbursements.

“We are going to do everything possible to leverage federal revenue,” Mr. Sabatini said. “I want to make sure we maximize every single federal dollar that we get.”

He declined to give details about which programs and benefits would be cut, but said the plan has been submitted to the office of Mr. Ehrlich, a Republican.

However, Mr. Sabatini said the Ehrlich administration will not close any of the state’s seven psychiatric hospitals, four institutions for the development of the mentally disabled or the two hospitals that deal with the chronically ill.

“I am going to make the decisions that have the least impact first,” he said. “I have an obligation to make sure these people get the care that they deserve.”

The department, which also handles bioterrorism threats and disease surveillance, will maintain those programs in their entirety.

“We are not going to let the safety net be put in jeopardy,” Mr. Sabatini said. “We are not going to make reductions in our bioterrorism activities. That is still a very high priority.”

Mr. Sabatini, who took over the department in March, said he did not fault predecessor Georges C. Benjamin, a Democrat from the Glendening administration, for the budget problems.

“He is a good man,” Mr. Sabatini said. “I think the whole state is in bad shape.”

James “Chip” C. DiPaula, Mr. Ehrlich’s budget secretary, said Wednesday that the Department of Human Resources, which regulates adoptions and foster care, is also working on cuts.

The state, under direction of the governor, this month set aside $650 million to ensure enough money to start the next fiscal year, which begins in July 2004. The governor is expected to make separate announcements on other plans to avoid an the estimated $1 billion shortfall.

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