NM agency warns of health care services cuts

Health care services for the needy may be sharply reduced if New Mexico Gov. Bill Richardson signs a budget-cutting measure approved by the Legislature, the administration said Tuesday.

Lawmakers ordered spending cuts of 7.6 percent for agencies under the governor's control as part of a plan to help plug a $650 million revenue shortfall. The cuts were approved during a special legislative session that ended last week.

The Human Services Department said its budget cuts could mean a loss of almost $38 million in state money and $115 million in federal dollars that match state spending.

Richardson has until Nov. 12 to sign or veto legislation approved during the special session.

To ease possible cuts on services, the department said it might need to furlough agency workers for as many as 15 days to save money.

The agency warned that cuts will be required for Medicaid, including mental health and substance abuse services for low-income New Mexicans and medical services for uninsured children and the developmentally disabled. Reductions in a nutrition assistance program for the elderly also are possible.

"Cuts to these programs can result in devastating consequences for New Mexico's most vulnerable population," said acting Human Services Secretary Katie Falls.

However, the director of the Legislative Finance Committee, David Abbey, said the Legislature intended to shield all Medicaid services from cuts. The Legislature allocated federal economic stimulus money and revenues from a settlement with tobacco companies to offset reduction in state money for Medicaid.

The department contends that key portions of Medicaid will be subject to cuts because of a change in how the program was budgeted in an appropriations bill passed by the Legislature earlier this year. Lawmakers amended that budget measure in the spending cut legislation approved during the special session.

The governor, in a blog posted on his Web site Tuesday, questioned whether the cuts in Medicaid were intentional or "an example of unintended consequences resulting from an attempted power grab by the Legislature" with the budget changes earlier this year.

Even before the special session, possible cutbacks in Medicaid loomed because of the program's rising costs as more people needed services during the recession.

The department had estimated that Medicaid would exceed its budget this year by $40 million and the shortfall could reach $300 million next year. The department has been considering a wide range of cost-cutting steps for Medicaid, including eliminating some medical benefits or lowering reimbursements to health care providers.

Earlier this month, the administration announced it plans to save state money by limiting enrollment in a Medicaid program that offers taxpayer-subsidized health insurance for low-income adults.