Among Ebenezer Scrooge’s detestable traits, he was a heartless creditor.
The main character in Charles Dickens’ classic tale “A Christmas Carol” was so hard-hearted a businessman that when he gets a glimpse of his likely future, he is mortified to witness two of his debtors expressing thankfulness over his death, as they believe whoever becomes their new creditor cannot be as mean as Scrooge.
Until a court hearing last week, Mississippi’s Division of Medicaid was doing a good imitation of Scrooge, squeezing Greenwood Leflore Hospital for repayment terms that could have put the hospital out of business.
The hospital does not dispute the debt of $5.5 million, which resulted from overpayments last year in Medicaid supplement funds to the hospital. It knew that there would be a clawback, since the supplement amounts were calculated based on patient volumes the hospital was handling before it significantly scaled back services.
Given the size of the clawback, though, the hospital asked for more time to repay the money than Medicaid was willing to give. The hospital requested three years, but Medicaid wanted the money twice as fast and began deducting $900,000 per quarter from new supplement payments. The hospital appealed. Although the Division of Medicaid initially indicated it might be more patient, it suddenly reversed itself and instead tried to accelerate the recovery, saying it would withhold $2.5 million in December.
Such a chunk, according to hospital officials, would have left it with too little cash to make its next payroll, effectively shuttering the hospital even while it appears to have finally navigated a path to its long-term viability.
The ordeal that the Greenwood hospital has gone through to stay afloat since the pandemic seemed to have been lost on state officials. Not only has it reduced its operations to try to get expenses in line with revenues, but it has also doggedly pursued avenues to either lease the hospital or achieve a designation that would produce much higher government insurance payments. Local taxpayers have been put on the hook for more than $7 million that was borrowed to buy time for the publicly owned hospital while it sought a sustainable remedy.
Those efforts at last proved successful when the hospital earlier this year received a federal designation that will produce an estimated $5 million to $8 million extra a year — enough to potentially stop the losses. Much of that additional money, though, won’t start showing up until late 2026, which is why the hospital asked the state for a longer repayment schedule.
At this point, it appears that the Division of Medicaid and the Greenwood hospital are going to work out a repayment plan that is satisfactory to both sides for the balance of the debt.
A positive outcome is crucial to Greenwood, but it’s also something other rural communities should be watching. If they have a hospital, chances are good that it’s facing similar financial strains. Rising costs and a high volume of uncompensated or undercompensated care have put almost half of the rural hospitals in Mississippi at risk of closure, according to those who follow the industry closely.
The policies and attitudes of the Division of Medicaid could play a significant role as to whether these hospitals survive. To ask the agency to show a little forbearance is not asking too much.
A hospital is one of the most important institutions in a community, affecting its quality of life, its desirability and its economy. To lose a hospital would be crushing for a community and put its people at greater risk of harm.
After Scrooge’s eyes were opened by the three spirits of Christmas, he redeems himself, trading miserliness for generosity. The crisis in rural health care might also have a happy ending if those who are shaping the story want it to.
