NCPA - National Center for Policy Analysis

More States Limiting Medicaid Hospital Stays

October 28, 2011

In order to cut costs and offer relief to hard-pressed budgets, some states are implementing new restrictions regarding the use of Medicaid within their borders.  Seeking to limit their required contribution to the program, which is funded jointly by the state and the federal governments, these states are limiting the number of days for which Medicaid recipients can stay in the hospital each year.  In some cases, such as Hawaii, this restriction has been brought down to as little as 10 days per year, says USA Today.

  • Medicaid spending was projected to rise by an average of 11.2 percent in fiscal 2011, which ended in June, from $427 billion in 2010.
  • For fiscal 2012, it is estimated that state Medicaid spending will rise 19 percent, largely because of the end of the federal stimulus dollars.
  • Medicaid served approximately 69 million people last year.

This latest policy initiative is only a reflection of a broader goal on the part of the states to rein in Medicaid spending.  While some states seek additional means, federal Medicaid planners are keen to cooperate in order to ensure that states do not adopt measures that are overly austere.

It also bears mention in discussing caps on the number of days for which Medicaid recipients can stay in hospitals that these caps are not necessarily absolute.  Hospitals are quick to reassure potential patients that they will not turn out those patients who are in genuine, significant need of medical help.  This policy, however, will inevitably lead to hospitals being forced to absorb a greater burden for Medicaid patients, which will then almost certainly be passed onto those patients who can in fact pay: the privately insured.

Source: Phil Galewitz, "More States Limiting Medicaid Hospital Stays," USA Today, October 24, 2011.

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