IRAQ DEBATE MAY HURT HOSPITALS MEDICAID PROVISIONS VETOED WITH WAR BILL.

Byline: LISA FRIEDMAN

Washington Bureau

Los Angeles County hospitals could become the newest victims in the ongoing battle between Democrats and the Bush administration over the Iraq war.

Tucked into the war spending bill that President George W. Bush vetoed this week was a key domestic provision blocking the government from slashing $500 million in annual Medicaid payments to California's public hospitals.

With Congress and the White House now back at the bargaining table, health advocates said they worry hospitals will be overlooked in the high-stakes negotiations over management of the war.

If the provision is dropped, it will mean a $200 million annual hit to Los Angeles County that officials said could force some hospitals to shut their emergency-room doors.

"This is sending us into a tailspin," said county Supervisor Zev Yaroslavsky. "We believe this will adversely affect our county annually to the tune of $200 million. It will contribute to a degradation of public health, and it's something that we're going to fight very hard."

The Bush administration has long sought to limit Medicaid payments to public hospitals, but Congress in 2005 beat back legislation that would have imposed caps.

This year, however, the administration changed tactics and moved to reduce about $5 billion in spending over the next five years by using a series of regulatory changes.

Lawmakers from 42 states that depend heavily on such payments, however -- including California, Illinois and New York -- have been fighting back hard.

"A cutoff of the funds would work a real hardship on those hospitals," said Sen. Richard Durbin, D-Ill., who led the fight to preserve the money by inserting a one-year moratorium on the new Medicaid rule in the $124 billion war supplemental.

That measure, however, also included a controversial timeline for pulling U.S. troops out of Iraq. Bush this week called a deadline "irresponsible" and vetoed the bill.

While new negotiations are in the works, domestic issues like hospital funding have fallen into the background as congressional leaders debate benchmarks and other ways to monitor progress in Iraq.

Durbin said Friday he was uncertain whether the hospital protection will stay in.

The funding reduction would hit five hospitals in Los Angeles County: Martin Luther King Jr.-Harbor Hospital, Rancho Los Amigos National Rehabilitation Center, Olive View-UCLA Medical Center, Los Angeles County-USC Medical Center and Harbor-UCLA Medical Center.

Yaroslavsky said the reduction would wipe out money Los Angeles County takes in from a 2002 ballot proposal that raised property taxes to generate about $180 million for trauma and emergency services.

He also noted the county had not accounted for the possibility of losing the money when it determined its budget for the coming year.

"It is money we have not assumed we're going to lose," he said. "We would have been foolish to make plans based on the worst-case scenario. We would have had to close hospitals."

At the same time, Yaroslavsky predicted, hospitals will have to shut their doors if Congress can't protect the funding.

"The ripple effect it will have on the private hospitals is quantifiable," he said. "All the patients will have to go somewhere, and they'll flood the private hospitals."

lisa.friedman(at)langnews.com

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