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Penn State Medical Center to Get Money From Medicaid

Posted on: Friday, 8 July 2005, 21:01 CDT

Jul. 8--The state will use federal Medicaid money to fund the Penn State Milton S. Hershey Medical Center and other state-related institutions under the budget Gov. Ed Rendell signed Thursday.

This will be the first time state funding for medical education will come from Medicaid, and some legislators think the plan is misguided. But, according to the state Office of the Budget, the plan is an allowable method that will save Pennsylvania taxpayers money and result in increased funding for the medical schools.

Overall, Penn State's funding from the state will increase 2 percent over the $317.2 million in 2004-05 total appropriations. The university had requested a 5.6 percent increase.

Medicaid is a federal and state program that provides health care to the poor. Under a proposal from Rendell that was part of the approved budget, the medical center, Temple University and the University of Pittsburgh will receive state appropriations through federal Medicaid transfers.

The three institutions will receive a combined $45.5 million in state and matching federal money for 2005-06, according to the budget office. So even though state funding will go down $18.3 million, total funding will increase $6.6 million. Of that, the Penn State medical center will receive $11.8 million in 2005-06, a 23 percent increase, according to the budget office.

"We've also made the commitment if we don't get federal government matching funds, which we're confident we will get, we will hold the medical centers at the level of funding they had last year," Susan Hooper, budget office press secretary, said.

State Sen. Jake Corman, R-Benner Township, characterized it as a "giant rip-off" scheme.

"My concern is that this scheme to draw down additional federal Medicaid dollars, while its legality is debatable, appears, in my opinion, to be inappropriate and improper and outright fraud," Corman said in a prepared statement.

Don Houser, a spokesman for Corman, said they're pleased Penn State's general funding has increased from Rendell's proposal, but said the university did not make out well. He said Penn State's funding is increasing 2 percent overall, compared to 2.7 percent for the University of Pittsburgh.

Penn State administrators earlier this year expressed concern that such transfers of Medicaid money are likely to be blocked by the Bush administration, which considers them a loophole.

Sean Young, a medical center spokesman, said there is concern about the proposed funding method.

"Clearly, it's not the way that medical education has been funded in the past, and I know our people have to investigate the detail and complexity a little further," Young said.

State Rep. Kerry Benninghoff, R-College Township, said the medical-center funding plan "robs Peter to pay Paul."

"To me it's not good policy," he said. "It's a Band-Aid fix for a greater problem, that's going to be much greater next year."

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Source: Centre Daily Times (State College, Pa.)

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