New Mexico plans $61 million in Medicaid cuts, for starters

SANTA FE, N.M. (AP) – New Mexico officials are predicting they can shrink next year’s state budget shortfall for Medicaid health care by $61 million if proposals go forward to reduce reimbursements to hospitals and general physicians.

The Human Services Department on Monday released detailed financial projections for its evolving plan to deal with an initial $85 million shortfall in the state’s obligations toward Medicaid.

The agency is proposing reductions of up to 8 percent to reimbursement rates for hospitals and a roll-back of 2014 reimbursement increases for physicians and nurses. The changes would begin July 1. A one-time federal waiver on insurance taxes also would help fill the budget gap.

New Mexico residents have flocked to Medicaid since Republican Gov. Susan Martinez agreed to an expansion in 2014 under the federal Affordable Care Act.

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