ATLANTA — Georgia’s programs to provide health coverage to the poor and disabled and for state workers overspent their budget by nearly a combined $100 million in the fiscal year that ended June 30, the Department of Community Health announced Thursday.
It also announced that outside auditors had discovered roughly $30 million in overpayments to nursing homes and hospices since 2003. The agency sent letters to the providers involved, who have 30 days to appeal, pay up or submit a repayment plan.
Also Thursday, the Community Health Board learned that Gov. Nathan Deal has ordered nearly $65 million in spending reductions for the department in the current, month-old fiscal year and the possibility of another $104 million cut from next year’s budget.
The cuts are the result of weak tax collections, even though Deal announced Thursday that collections rose 7.4 percent in July compared to the same month a year ago.
The overspending wasn’t unexpected. The General Assembly only appropriated enough money in the past fiscal year for 11 months’ worth of expenses for state employees, Medicaid, PeachCare for Kids and coverage of the aged, disabled and blind. It was a way to balance last year’s budget with the knowledge it would have to be made up in a midstream appropriation in January.
To keep from bankrupting the doctors and hospitals in the meantime, the department used surplus funds from one program to partly pay the others, said Vince Harris, the department’s chief financial officer.
“Forty thousand providers would have gone out of business otherwise,” he said.
The $30 million in overpayments stemmed from a glitch in outdated software that under-charged what patients should have paid for treatment.
“It just was fixed: very, very complicated,” Harris said. “We just never had the time to identify it as a true priority.”
He speculated that most of the nursing homes and hospices had charged their patients correctly but had taken advantage of the software glitch to profit from the overpayment.
“They knew it was coming,” he said of the call for the providers to repay the agency.
He expects most to repay.
How the agency copes with the prospect of new budget cuts won’t be decided until a called board meeting in two weeks, said Budget Director Scott Frederking.
“We’re very deep in our analysis of what our options are,” he told the board.