Executive Budget Recommendation Protects State Funds for Healthcare

David Massaron

The fiscal year (FY) 2022 executive budget recommendation was presented to the Legislature Feb. 11 by State Budget Director Dave Massaron.

The governor’s budget for the upcoming fiscal year protects key hospital priorities and includes the significant increase to outpatient Medicaid rates that took effect in October 2020. Key elements in the proposals for FY 2022 are:

  • The continuation of enhanced outpatient Medicaid rates. For FY 2021, the increase in rates is projected to result in the continuation of funding that translates to $250 million in net revenue for hospitals.
  • The executive budget recommendation protects critical access hospital funding, the rural access pool and obstetrics stabilization fund from reductions.
  • Disproportionate share hospital payments and graduate medical education funding are also protected from reductions, continuing to reflect the MHA’s 2016 budget deal.
  • The state’s obligation for the Healthy Michigan Plan is fully funded, and the executive recommendation continues funding for extended postpartum coverage of 12 months for new mothers who rely on Medicaid.

The MHA will continue to advocate for needed funding to support testing, personal protective equipment, vaccinations and more over the past year and encourage considerations to address other pandemic consequences, such as funding to improve behavioral health. The MHA will work with lawmakers and keep members apprised as budget negotiations continue with the Legislature this spring. As outlined by a media statement issued by MHA CEO Brian Peters, this was an important first step to preserve access to care in all hospitals across the state. Member with questions may contact Adam Carlson at the MHA.