Governor’s Budget Recommendation Supports Healthcare Workers, Protects Hospitals

State Budget Director Chris Harkins presents the FY 2023 executive budget.

The fiscal year (FY) 2023 executive budget recommendation was presented to the Legislature Feb. 9 by State Budget Director Chris Harkins.

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 2023 are:

  • The continuation of enhanced outpatient Medicaid rates. For FY 2022, 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 the 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 agreement.
  • 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 executive budget recommendation also calls for additional investments in workers, education, and licensing that include:

  • $500 million of “Hero Pay” for essential workers, which includes those who were on the front lines during the pandemic.
  • $230 million for transformational educational infrastructure to improve and promote collaboration in higher education for health science and medical education.
  • $1.1 million to establish a task force and implement its recommendations dedicated to expediting and breaking down barriers to licensure for non-U.S. medical professionals

The executive budget recommendation is in addition to the $300 million for healthcare workforce recruitment, retention and training that the Legislature approved Feb. 9 (see related article). The MHA will work with lawmakers and keep members apprised as budget negotiations continue with the Legislature in the spring. As outlined in a media statement from MHA CEO Brian Peters, this was an important first step to preserve access to care in all hospitals across the state. Members with questions may contact Adam Carlson at the MHA.