When Congress broadened the eligibility standards for Medicaid, it put pressure on the state's Health Department budget that may result in cutbacks in other areas, according to the department director.

Dr. Suzanne Dandoy and her staff presented the governor and his budget officials with a list of programs that may have to be reduced or eliminated just to fund federal mandates.The state draws down roughly a $3-to-$1 match for money it spends in Medicaid programs. The program serves low-income individuals who receive Aid to Families with Dependent Children or who are aged, blind or disabled.

Preliminary figures from the Office of Planning and Budget indicate the department can expect about $3.8 million in building-block funding, which is added on to the base budget. But Health Department officials say it will cost millions more from the state's general fund just to cover mandates.

If no funding is available for the mandates, the money must come from other programs. Dandoy and her staff prepared a prioritized list of where the cuts would likely be made to satisfy those federal requirements.

The prioritized list would begin with a reduction in active treatment funds for patients who are mentally retarded or developmentally disabled. That would have no immediate impact because active treatment is not being provided to people in nursing home facilities due to the federal government's failure to publish implementation directions.

The next cut would be a reduction in the amount paid for inpatient services at Primary Children's Hospital, which receives a slightly higher reimbursement rate than other urban hospitals.

Other cuts could include elimination of all publicly funded organ transplants for adults except cornea transplants and fewer referrals for Medicaid services for children who have chronic illness or disability. Income eligibility for the Medically Needy Program could drop from $350 a month to $310. The program could be scaled back or even dropped.

People who receive medical assistance because they qualify for AFDC, even though they have chosen not to accept the welfare grants, could lose that coverage. In some cases, that might force an individual to keep the coverage by accepting the grant, at even greater cost to the state.

The state could also drop case management for Medicaid recipients, reduce adult dental services to temporary fillings and extractions, and discontinue optional services like substance abuse treatment, physical therapy and psychological help for adults.

Also vulnerable to change are the formula for paying for prescriptions and the difference in payment which gives rural health-care providers slightly more money than urban ones and the General Assistance Self-Sufficiency Program. GASSP takes care of a single medical condition that keeps someone from being employable.

Those cuts would just about cover the mandates, Dandoy said. But covering the mandates won't take care of funding needs for other areas, like environmental health and public health and salary needs.

Dandoy said the department has trouble recruiting employees because of the pay scale. And she cited the department's inability to offer merit increases to employees who do excellent work as a problem in retaining staff, as well.

The governor listened to testimony last week, prior to putting together his budget recommendations for the Legislature.