Local health care providers are taking a wait-and-see approach
to a proposal to slash Medicaid funding, noting any cuts to the
program would have a negative effect on their operations.

According to BRMC’s Senior Vice President and Chief Financial
Officer James Tarasovitch, “any cuts in Medicaid spending could
have a negative impact as it ripples down to the local level.”

Tarasovitch said the issue begins with pressure on the state and
federal governments to reduce their budgets and looking at Medicaid
programs is one way to do so, essentially passing the burden onto
local providers.

At BRMC, Medicaid represents about 20 percent of its
business.

“Over the years, we have seen an erosion of payments as the
federal government has tried to reduce its risk of exposure,”
Tarasovitch said, referring to costs.

The same holds true at the three other major hospitals in the
region. At Kane Community, Chief Executive Officer Gary Rhodes said
it’s becoming harder to have Medicaid patients approved for
admissions.

“A lot of the decreases are really not in what they (government)
are paying you when the service is provided,” Rhodes said. “They
are trying to find a way to not provide the service. It’s
disturbing. You are now talking about patients not getting the care
they need.”

Rhodes said the trend with Medicaid has been to deny admissions
and make hospitals treat patients in the emergency room and hold
them for observation. For example, if a patient comes to the ER
with chest pains, the hospital has to care for them regardless of
insurance. However, even after the care has been provided, if the
individual is a Medicaid patient, nine times out of 10 they are
denied admission to the hospital.

“We actually end up putting the patients in the hospital for
observation whether we get paid for it or not,” Rhodes said, adding
the ERs are often overloaded with patients.

In Kane’s case, Rhodes said about 10 percent or less of the
hospital’s business is through Medicaid, adding some inner city
hospitals have nearly 25 percent.

“Even with what Medicaid pays now, they pay us less than what it
costs to provide the service. You can’t continue to do that
forever.”

Rhodes said Pennsylvania has tried to do a good job with medical
insurance, including the CHIPS program for children.

“I’m afraid if the federal government basically takes the
reimbursement away from the state, there will be less money to do a
CHIPS program.”

For his part, Charles Cole Chief Financial Officer Ed Pitchford
said years ago the states discovered a mechanism allowing them to
draw down additional federal funding for assistance programs,
noting from time to time, the feds try to alter that mechanism.

“Any cuts to medical assistance programs are bad cuts,”
Pitchford said. “Any cuts would mean less money to provide
care.”

Pitchford said he is looking forward to receiving more
information concerning the proposal.

Elk Regional’s Vice President of Finance James Byham also called
the current reimbursement rate insufficient, noting “any new
reduction will hurt any hospital.”