St. Paul, June 16, 2009--Primary care physicians will be spared from additional reimbursement cuts in Gov. Tim Pawlenty’s recommendations for plugging a $2.7 billion gap in the state’s 2010-11 budget.

Through a process called unallotment, the governor used his executive power to recommend spending cuts in four areas: higher education, health and human services, local government aid, and state government agencies. He also deferred payments for K-12 education.

Most of the cuts will take place the second year of the biennium, giving lawmakers time to look for alternatives, and many of them were less than what he was proposing in his initial budget.

“I believe state government can and should be expected to live on less in these challenging times. Everyone else is,” the governor told reporters at a press conference at the Capitol. “If hard-working families are tightening their belts, we should too.”

Although the governor preserved payments for office and outpatient services and preventive medical and family planning services provided by primary care physicians, he did propose an additional 1.5 percent reimbursement reduction for specialists on top of the 5 percent planned reduction that goes into effect July 1. Payments to hospitals for inpatient services, spending on medical education, disproportionate quarterly payments to safety-net hospitals, nursing home payment rates, or payments to mental health care providers remained unchanged.

The governor did, however, discontinue the General Assistance Medical Care (GAMC) program as of March 2010, a month and a half sooner than originally scheduled.

The governor noted that about half of those who will lose coverage under GAMC will be able to transition to the MinnesotaCare program. “This proposal continues to strip the health care safety net at a time when Minnesotans need help the most,” said Dave Renner, the MMA’s director of state and federal legislation.

In an editorial in the Minneapolis Star Tribune published earlier this month, MMA President Noel Peterson, M.D., noted that the governor’s planned cuts ran counter to his support of the bipartisan health care reform legislation he signed into law in 2008, which emphasized prevention and chronic disease management. “His line-item veto of General Assistance Medical Care eliminates coverage for the poorest of the poor adults, many of whom often suffer from chronic diseases and mental illness. Eliminating insurance for these Minnesotans will result in no coverage for preventive services and will increase care provided at hospital emergency departments where care is most expensive.”

For details about the governor’s proposal, go to http://minnesota.publicradio.org/features/2009/06/budgetcuts.pdf.