MD Hospitals Punished For Opposing O'Malley Bill 4/09

Waiting for O'Malley.  Sounds like the title to a play - but it was the reality for the budget conference committee this weekend as most of their work needed to be postponed until Governor Martin O'Malley submits his second supplemental budget.

True to form for this session, the Governor and his administration left legislators rudderless as the supplemental budget has yet to be introduced on the Senate floor.  It wasn't enough that the Governor abdicated the responsibility for balancing the budget to legislators who were stuck with the task of finding $488 million in spending reductions after the first supplemental budget (click here).  He then made them cool their jets while the clock is ticking towards Sine Die next Monday and an extended session if the budget does not get passed.

Preliminary documents relating to Supplemental Budget No. 2 indicate that O'Malley will also be exacting retribution to the tune of $29 million on Maryland's hospitals for opposing an administration bill. 

As part of his legislative package announced in late January, O'Malley urged the legislature to pass an administration bill on false claims - Senate Bill 272 - Maryland False Claims Act of 2009.  In recent years, bills to create a state false claims act have generated controversy in Annapolis.  The crux of the false claims act is that it allows a private citizen to sue on behalf of a governmental entity to recover overpayments and penalties for fraudulent claims against the government, primarily in the Medicaid program.

Opponents argue that the Federal False Claims Act is a sufficient vehicle for pursuing Medicaid fraud and that passage of a state law would be duplicative and unnecessary.  Medical institutions and practitioners are also worried about the costs to defend an explosion of lawsuits due to the fact that the private citizen is entitled to a share of the recovery of the damages and penalties.

One of the lead opponents to the Administration bill was the Maryland Hospital Association (to see their legislative agenda click here).  Through their advocacy in support of their member institutions, the Senate bill to create a state false claims act was killed on third reader by a vote on March 23rd of 23 yeas and 24 nays.

Thus, Supplement Budget No. 2 contains two reductions:  $20 million reduced funding to hospital payments for medical day limits and $9 million reduced funding for physician rates.