Proposed spending cuts to the federal Medicaid system will not
hurt rural hospitals in the four-county region as much as
expected.
A recently revealed Bush administration proposal calls for
funding cuts to many rural hospitals and nursing homes across the
nation, which officials’ hope save Medicaid almost $4 billion over
the next five years.
The battle centers on funding arrangements between the states
and local governments, a deal which tends to increase the federal
government’s share of spending on Medicaid, which is a joint
federal-state program providing health care coverage to millions of
poor and disabled people.
However, while local officials are monitoring the situation
closely, it appears the changes would not have a significant impact
on the four major health centers across the region – Bradford
Regional Medical Center, Charles Cole Memorial Hospital in
Coudersport, Elk Regional Health Center in St. Marys and Kane
Community Hospital in Kane.
All four hospitals rely on receiving reimbursements from both
Medicaid and Medicare for revenue. The hospitals often provide
uncompensated care for the uninsured and underinsured.
“(There is) every indication that the tightening up of the
Medicaid federal share rule will have a negligible effect on the
ability of our rural providers to secure their essential and
rightful reimbursements,” U.S. Rep. John Peterson, R-Pa.’s,
Communication Director Chris Tucker said. “To the extent those
providers are affected at all, though, it’ll be left to the
governor to decide who will bear the cost, at what price and for
how long.”
On Wednesday, Gov. Ed Rendell revealed his initiative to make
health insurance more affordable for the state’s residents,
including imposing a “fair share” tax on employers who don’t
provide health insurance equal to 3 percent of their payroll
The Hospital and Healthsystem Association of Pennsylvania Vice
President Robert Greenwood echoed Tucker’s statement, adding the
agency has been analyzing the proposed rule and thus far it doesn’t
appear it will have much impact across the state.
Greenwood said the changes will likely affect states where there
are public (government owned) hospitals or nursing homes, adding
there are no public acute care hospitals in Pennsylvania.
Under the current Medicaid system, the state’s hospitals are
reimbursed 82 cents on every dollar of inpatient care provided, and
only 54 cents per dollar of outpatient care provided, according to
Roger Baumgarten, director of media relations for the Hospital and
Healthsystem Association of Pennsylvania.
Baumgarten said the state’s hospitals currently provide more
than $11 billion in uncompensated care annually, a figure which has
increased each year. Officials said Pennsylvania represents the
seventh highest Medicaid state in the U.S., with the third highest
population of citizens 65 and older.
“The solution to Medicaid’s problems is not harsh spending
cuts,” a bulletin issued by the American Hospital Association said.
“The program deserves a thoughtful, deliberative reform process
that ensures that the nation meets its obligation to care for the
neediest of our society.”
According to the proposal, released by the Center for Medicaid
and State Operations, in several states, the financing arrangements
between the providers and state result in the federal government
paying more into the program than the law says it should.
Officials said the federal share of the program ranges from 50
to 76 percent, depending on the state; poor states receive a larger
share of the disbursements. The federal government spends $200
million annually on Medicaid.
Dennis Smith, director of the Center of Medicaid and State
Operations, told The Associated Press that if a hospital gets paid
$100, half of which comes from Washington and the other half from
the state, the hospital gives $10 back to the state to spend as it
wants.
Tucker said Pennsylvania has already begun closing that
loophole.
“In other states that process has yet to begin, and for them,
the consequences of this rule change will likely be much more
severe,” Tucker said, adding the congressman will be watching the
issue closely, especially for any signs the rule is shifting the
burden disproportionately onto rural providers.
Peterson has already discussed the matter with officials in
Harrisburg, according to Tucker.
The proposal will be published in the Federal Register; there
will then be a 60-day comment period ending around March 16.
(The Associated Press contributed to this report.)
