By Fredie Carmichael/The Meridian Star
July 23, 2008 09:38 am
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When the word Medicaid is tossed around in conversation in Mississippi these days, you get varied responses.
To those in the healthcare field, you get a sense of anxiety, angst and worry. Will they have a job? Will they be able to serve their patients?
To the politically astute cynic, you might get a 15-minute rant about why his side is right and the other side is wrong, with endless facts and figures from his side to back it up.
But to the average Joe, you get a lot of confusion. The reason: the $90 million hole Medicaid currently finds itself in is quite confusing, even for those in the state capitol and hospital administrators. The numbers are dizzying enough to turn off most accountants.
The problem, however, isn't a new one.
In 2005, the Centers for Medicare and Medicaid Services made a decision that meant the state of Mississippi could no longer recycle federal funds through its Medicaid program in an effort to fund itself. What that resulted in was the creation of a $90 million deficit in state matching funds. While the state has been aware of the problem since 2005, the problem was temporarily band-aided with Hurricane Katrina-related funds. Those funds are no longer available.
So the governor proposed a formula to raise the $90 million from the hospitals; the hospitals opposed that formula. Lawmakers then asked the Mississippi Hospital Association to come up with a better formula to make up the $90 million. Their plan became Senate Bill 2013, which essentially puts a 5-year hospital assessment in place. The bill puts the state back in line with where it was years ago when it received about $200 million a year from hospitals ... only this bill includes an assessment and formula that the feds agree on.
A fight has ensued between the House leadership and Gov. Haley Barbour. House leaders have said they will not pass the bill unless it includes a tax on tobacco as part of the solution. The governor has said he will not back a plan that includes such a tax to fund Medicaid. And if lawmakers fail to reach an agreement in an Aug. 4 special session, the governor will have to make $375 million in cuts to the Medicaid program.
What those cuts would mean to local hospitals is concerning, hospital administrators said. The estimated combined annual impact: $3.9 million to Jeff Anderson Regional Medical Center; $3.8 million to Rush Foundation Hospital; and $1.8 million to Riley Hospital, according to figures from the Mississippi Hospital Association.
That would mean the loss of hundreds of local jobs, healthcare services and, in some cases, could include the closing of clinics and hospitals.
"Both sides have seemingly dug in and aren't budging ... that's the scary part," said Chuck Reece, chief operating officer and executive vice president of Rush Foundation Hospital. "This has turned into a long, expensive problem ... and that's unnecessary."
Reece said the political battle between the governor and House Speaker Billy McCoy has diverted attention away from the real issue.
"And as a hospital, we're stuck in the middle to deal with the problems," Reece said. "I think we've lost sight of what we're trying to do, which is help people. The whole process of Medicaid is to serve the most vulnerable of our population. Those are the ones, along with the physicians and employees, who stand to lose the most while these political games are being played. At the end of the day, a political solution needs to be reached so we can continue to serve the people."
Officials with the hospital association originally backed a cigarette tax to help fund the $90 million shortfall in Medicaid. But when they weren't given that as an option, they helped formulate a solution, and later backed the plan. It's a plan that includes hospitals paying in about $200 million to the state and getting back about $1.25 billion in reimbursements and distributions. Handfuls of hospitals, however, that do not stand to reap that type of return have opposed the plan.
Still, the hospital association backs SB 2013 as the "best-case option," said Michael Bailey, vice president and chief financial officer of the Mississippi Hospital Association.
"(Tobacco tax) was not an option we were given," Bailey said. "If you look at the options we were given, this was the best one."
House leaders such as House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, say they're against hospitals making up the $90 million. He said he prefers a tax on cigarettes to fix the problem.
"When you tax them, those get put into the cost of healthcare, which is already going up," Dedeaux said. "This just adds an extra burden on top of that. When you have high healthcare costs, fewer can afford healthcare ... and it drives up insurance premiums.
"Hospitals solve healthcare problems; tobacco causes them. Why tax the very thing that fixes the problem?"
The governor and other supporters of SB 2013, however, argue that hospitals paid part of the state Medicaid match for 15 years and received the benefits of federal reimbursements for those payments. They've volunteered to make the payments, so why would we not ask them to continue paying it, Gov. Barbour said.
"Hospitals shouldn't get a tax break on the backs of any taxpayer — a smoker, drinker or anyone else for that matter," Barbour said. "I think it's fair to pay $1 and get $6. It is reprehensible if (House leaders) are willing to let these cuts take place ... if they're doing this for political reasons."
Neither side seems willing to budge.
Barbour said he is "unalterably opposed to (tax on tobacco) being used to give hospitals a tax cut. They've been paying this tax for years."
Dedeaux said the House has already agreed to compromise by offering to meet the governor halfway, by agreeing to come up with half the $90 million with a cigarette tax and half on the hospital assessment.
"We think that's a reasonable compromise," Dedeaux said. "There's not much I can say with certainty about the upcoming special session but I can predict this: the House is not going to pass the governor's plan in that form. I can predict that won't happen. Now what we can get into between remains to be seen. But I can say with certainty it will not be a pure tax on hospitals to fix Medicaid."
Some lawmakers are frustrated over the posturing.
Sen. Hob Bryan, D-Amory, said he'd like to see real solutions and less political mud slinging.
"It's simply frustrating, especially with all of the fallacies being slung around," Bryan said. "They keep calling this the 'governor's plan,' but it's not, this is what the hospital association came up with to solve the problem. I'm at my wit's end. (The House) isn't offering a proposal or a solution. My goal is to solve this problem because if we don't solve it, everyone loses."
Both sides, including the governor, have made missteps, Bryan said. But it's time lawmakers agree on a plan, and SB 2013 is the best option, he said.
"When I talk to people in the House I have heard things like: 'it's the governor's fault,' and 'we don't like the governor and we don't like the lieutenant governor, we just like the game' ... that's very discouraging. We just need an end result. The House is miscalculating on this."
State Rep. Greg Snowden, R-Meridian, agreed.
He said House leaders, led by Speaker McCoy, are simply trying to make the governor look bad by making the proposed $375 million in cuts.
"They're not offering a real solution," Snowden said.
"They just want him to make the cuts ... and they don't care how long this takes. You're playing politics with real needs at stake. It needs to stop."
At the end of the day, all of the political posturing and finger pointing has turned most Mississippians off to the issue.
Some worry it may be too late by the time they feel the effects.
“The average Joe out in the county will care when they try to take their momma to the doctor and realize the doctor is either no longer there, the hospital is gone or the place has cut back on its hours and services,” one local hospital administrator said.
“That’s when they’ll see the effects of this. This is an issue that must be resolved.”
TALKING DOLLARS
Here's a look at how many people the three major hospitals in East Mississippi employ (including contract work) and what the annual payroll is for each. These hospitals are among the top three employers in the region.
Rush Foundation Hospital
(not-for-profit)
Employees: 2,800
Annual Payroll: $130 million
Jeff Anderson Regional Medical Center (not-for-profit)
Employees: 1,490
Annual payroll: $51 million
Riley Hospital (for-profit)
Employees: 550
Annual payroll: $19.5 million
(Also, Riley pays $1.2 million in city and county taxes)
THE BASICS OF SB 2013
It is a five-year assessment on hospitals that, through a fee based on the number of patients in each hospital in Fiscal Year 2006, will fund the $90 million Medicaid shortfall. It also determines how the money in the optional programs will be distributed. Most hospitals will get more money from the optional programs than they pay in the tax. The proposal was developed and backed by the Mississippi Hospital Association.
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