Hospitals worry over possible funding gap

May. 17, 2013 @ 07:24 PM

Kimberly Crews and her fellow employees at High Point Regional UNC Health Care will enter uncharted financial waters with the impending shift of Medicaid reimbursements to hospitals here and across the state and nation.

Crews, the chief financial officer for the local health system, and other health care administrators worry that the changes in Medicaid payments through the Affordable Care Act might end up hobbling hospitals. When the historic health care bill was passed, the working theory was that lower Medicaid reimbursements to hospitals would be offset by more Americans securing health insurance, cutting down on noncovered care that hospitals provide.
But as the Affordable Care Act begins to be implemented now more fully, hospital representatives wonder if their medical centers will receive enough coverage through Medicaid to reflect the cost of health care to low-income patients, especially people showing up at emergency rooms.
Complicating the situation for High Point Regional and other medical centers in North Carolina is that the Republican-controlled legislative and executive branches of state government didn’t choose to tap into the federal Medicaid funding extension in Democratic President Barack Obama’s signature health care reform. On Friday, Gov. Pat McCrory and leaders of the N.C. General Assembly indicated they would seek a waiver from the federal government on operating and financing North Carolina’s Medicaid programs.
Conservatives have questioned whether states will be left with budget-busting Medicaid commitments if the federal government can’t maintain its funding of the health care program for the poor under the Affordable Care Act.
The North Carolina Hospital Association anticipates “a lost opportunity for $413 million annually that would have come from expansion” of Medicaid, said Don Dalton, vice president of public relations with the Raleigh-based trade group. Medicaid expansion was expected to cover between 500,000 and 625,000 people in the state, the association reports.
High Point Regional estimated it would pick up between $8 million and $9 million under an expansion of Medicaid payments had North Carolina tapped into federal Medicaid funding under the Affordable Care Act.
“Medicaid covers about 60 percent of our cost of taking care of patients. This would have helped bring it up to maybe 65 percent to 70 percent,” Crews said.
The federal government plans to pay 100 percent of the cost of Medicaid extension to states that opt to participate in the program during the first three years, then 90 percent of the cost after the first three years, Crews said.
Becoming part of a larger health care system, through the merger this past spring with UNC Health Care, should help High Point Regional cope with changes under health care reform, Crews said.
Prior to the merger with UNC Health Care, High Point Regional was a smaller medical center that didn’t have the bargaining power of larger health systems, Crews said.
“So we’re hoping as part of a larger system we will pick up some of those economies of scale,” she said. “We will also be joining their group purchasing arrangement, buying more in bulk than we were before and get better pricing.”
Crews said the hope among health care professionals is that an expansion of health insurance through the Affordable Care Act will lessen the load of uncovered care that must be absorbed by hospitals.
“When people come through the emergency room, it’s the highest-cost place to take care of patients,” she said.
If more people secure their own insurance or coverage through Medicaid, “they could go to a primary care (physician) or an urgent care and do some preventative care so they’re not ending up in the hospital.”
pjohnson@hpe.com | 888-3528

 

By The Numbers

500,000 to 625,000 | Number of people that could have been covered by Medicaid had North Carolina taken federal expansion under Affordable Care Act, known commonly as Obamacare
$569 million | Amount lost by North Carolina hospitals in 2011 from serving Medicaid patients

73 | Number of cents on the dollar state hospitals reimbursed compared to total cost of Medicaid care
$710 million | Amount of bad debt state hospitals absorbed in 2011 from patients either unwilling or unable to pay

Source: N.C. Hospital Association