Georgia approves HMO fee to help fund state Medicaid program

The Georgia Department of Community Health board on Thursday approved a plan to charge commercial HMOs the same fee as managed care companies that operate the state's Medicaid program in an effort to make up for a 5% reduction in program funding, the Savannah Morning News reports.

The fees are used to draw down federal match funds that are then combined to pay Medicaid managed care plans.

Community Health Commissioner Rhonda Medows said that the changes are required by new federal rules and that the decision to delay, rather than revoke, an increase in doctor and hospital reimbursements to July 1, 2009, might give hospitals enough reason to avoid layoffs and other drastic measures.

However, Jimmy Lewis -- CEO of HomeTown Health, an organization of small and rural hospitals -- said, "We may have riled a giant, the likes of which we can't imagine," noting that private insurers could increase premiums and renegotiate contracts with health providers. (Savannah Morning News, 8/28).