Georgia is getting a massive influx of federal stimulus money, intended to help plug a gaping hole in the state’s Medicaid budget.

About $465 million in federal Medicaid matching funds will flow to Georgia this year, with $1.1 billion expected in 2010.

Yet on March 4, Gov. Sonny Perdue announced that his proposed 2010 budget would cut Medicaid payments to hospitals by 10 percent and to doctors by 6 percent.

Bert Brantley, spokesman for Perdue, said the stimulus money is not a reliable source of funding in the long term.

"And it’s not nearly enough to offset the decline in revenue that we’ve seen (in Georgia)," he said. "For 2010 we have to cut an additional $500 million out of the budget, even with the stimulus funds. The cuts are across the board, in all agencies."

This turn of events has put medical providers on an emotional roller coaster.

"It’s extremely frustrating," said Kevin Bloye, spokesman for the Georgia Hospital Association. "A few weeks ago, the health care community was breathing a collective sigh of relief, and now we’re looking at hundreds of millions in additional cuts."

In addition to reducing Medicaid reimbursement, Perdue also proposed slashing $35 million that had been targeted for Georgia’s critically underfunded trauma care network.

"We’re perplexed at the cut to trauma care. We really can’t explain that," said Deb Bailey, director of government affairs for Northeast Georgia Health System.

Bailey said if Medicaid payments are cut by 10 percent, Northeast Georgia Medical Center would lose between $4 million and $5 million.

"Hospitals haven’t had an increase in Medicaid (reimbursement) since 2002. We lose money on every Medicaid patient we take care of," she said. "Now, not only are we not getting an increase, we’re getting a cut."

Bailey said the decrease in funding would come at a time when Medicaid, the government health care program for the poor, is needed more than ever.

"For 2010, Medicaid enrollment is expected to increase by 7 percent and PeachCare (health insurance for children) by 22 percent," she said.

Brantley doesn’t dispute that Georgia’s health care system needs a booster shot.

"We agree that the hospitals need more. We tried to come up with a way to increase reimbursements," he said.

Perdue’s proposed solution was to levy a tax on Georgia’s hospitals and insurance companies, an idea that was not greeted enthusiastically by the legislature.

Brantley still believes it’s the best option, however.

"This all goes back to the feds changing how Medicaid is funded," he said. "We used to charge a fee on the (Medicaid managed care organizations). Then we were told the rule is that if you’re going to charge a fee, it has to be across all insurance plans."

Brantley said Perdue felt that hospitals should be charged the fee, too, because "no health care sector should be exempted."

"But all we heard (from the hospitals) is ‘no, no, no,’" Brantley said. "If they don’t like the Medicaid cuts, they should go for the fee. We thought that the fee was a pretty reasonable solution. It would have provided a stable, long-term funding source for Medicaid."

But Bloye said the fee and the Medicaid cuts are equally bad choices for hospitals that just don’t have money to spare.

"I think there’s a definite possibility that some rural hospitals will close as a result of this," he said. "Several are hanging by a thread right now. They’re running on razor-thin margins, and this could push them over the edge."

Unlike most hospitals, doctors can opt out of the Medicaid program, and a growing number of them are choosing to do so.

"Our concern is that the 6 percent cut is going to substantially reduce the number of physicians accepting Medicaid," said David Cook, executive director of the Medical Association of Georgia. "Doctors want to take care of people, but they have to face a business reality."

Cook said many doctors already have stopped accepting Medicaid patients because they’re not reimbursed enough to cover their costs.

"And the more doctors that drop out of the program, the more pressure there is on those who remain," he said.

Cook cited the case of a North Georgia neurologist who recently dropped Medicaid because he was the only one of his specialty left, and all the Medicaid neurology patients in the area were being referred to him.

Bailey said Perdue’s budget is just a proposal and is not set in stone.

"The governor makes his recommended budget, and then the General Assembly works with it," she said. "This is step one of the process, so the numbers may change. We’ve been working feverishly to try to get legislators to see things a little differently than Perdue. We want them to know how much (stimulus) money is being left on the table."