Friday, Gov. Tate Reeves announced a plan that will help with the growing rural hospital crisis in Mississippi. But, not everyone is convinced that the plan will actually help the residents the hospitals serve.
In a press release, from the Reeves administration, it states that the plan includes two hospital payment initiatives that are estimated to generate almost $700 million annually in additional Medicaid funds for Mississippi hospitals.
Mississippi Today reports that the plan “relies on two major changes that bolster supplemental payments to hospitals for the care they provide to people with Medicaid. Supplemental payments are extra payments hospitals receive to offset low Medicaid reimbursement rates or uncompensated care, which is money hospitals lose caring for patients who are uninsured and can’t pay their hospital bill.”
In the press release, the Reeves administration states that “The first initiative, known as the Mississippi Hospital Access Program (MHAP), will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system. With these directed payments, hospitals would be reimbursed near the average commercial rate, which has been considered the federal ceiling for Medicaid reimbursements in managed care.”
In short, according to Mississippi Today’s reporter Devna Bose, the plan “…which typically pays hospitals for the gap between payments for services rendered for Medicaid managed care patients (which are usually lower) and Medicare patients (which are usually slightly higher). Under the proposed changes, hospitals will instead be paid for the gap between Medicaid patients and people insured by commercial plans, which tend to reimburse at higher rates.”
The second initiative will supplement Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit. This payment mechanism, known as a UPL, is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the Mississippi Division of Medicaid earlier this calendar year.
This will increase payments for hospitals that receive low payments from Medicaid. Under this plan, Winston Medical Center currently will receive $1,014,454 for the 2024 Fiscal year, but under Reeves proposed plan, Winston Medical will receive $1,336,110. The difference between the two plans is $214,945.
The release also states: “To minimize the recurring impact of state general fund expenditures, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.”
According to the plan, it’s projected to net an increase of $689 million through the initiatives.
However, this is only if the federal Centers for Medicare and Medicaid Services approves the proposals.
During the press conference, Dr. Drew Synder said it could take up to two to three months before the state learns if their plan has been approved or not. He said once it’s approved, it’s retroactive to July 1, 2023.
But, this means it may not be until sometime in December before the answer is received.
Hospitals are projected to net an increase of $689 million through these initiatives, after accounting for the funds the hospital made to help finance the initiatives.
In the Mississippi Today report, it said that “hospitals will have to pay $178 million in taxes for Mississippi Hospital Access Program payments to go up by $960 million, Upper Payment Limit payments will yield $137 million and disproportionate share hospital payments — which make up the difference for hospitals that lose money on serving a significant population of Medicaid-insured and uninsured people — will decrease by $230 million because the other payments are bridging the gap. The net gain for hospitals will be $689 million total.”
The short answer, hospitals will have to pay in more to be able to pull down the federal money and the net will be $689 million in total.
But, it doesn’t cover the many who come to the emergency rooms, like at Winston Medical to be treated who have no health insurance.
According to the Mississippi Today report, Adam Searing, an associate professor who works on Medicaid, said these reforms “improve the financial bottom line for some hospitals” and keep them open longer, but people are still going without health coverage.
“You’re really not solving the problem,” he said. “You’re just putting a Band-Aid on one aspect of it.”
