Missouri health care providers are concerned about federal funding for several key programs as Congress closes in on a September 30th deadline to renew them.
Three of them deal with reimbursements to hospitals. They include funding for Medicare dependent and low volume hospitals, as well as those that handle an especially large number of uninsured people who are unable to pay for care. Providers are also concerned about renewal of a coverage program known as the Children’s Health Insurance Program, or CHIP.
All four of the programs are bipartisan in nature, but are being delayed while the U.S. Senate considers legislation to replace the Affordable Care Act (ACA).
Providers who handle the biggest share of uninsured people receive funding from the Disproportionate Share Hospital (DSH) program. The subsidy dates to the Reagan administration in 1987.
The ACA called for the program to be downsized under the assumption the expenses would be offset by additional Medicaid coverage and participation in the health exchanges.
State such as Missouri that haven’t expanded Medicaid would take a major hit to their DSH funding. Those cuts have been delayed numerous times by Congress, but there’s no framework to stop them now.
Truman Medical Centers in Kansas City is the state’s largest provider of care for low-income uninsured people, with 25% percent of its patients having no means to pay.
President and CEO Charlie Shields says his hospital will lose a big chunk of funding if the scheduled DSH cuts are implemented. “We estimate next year that’s $14.4 million that we lose,” said Shields. “And when I say lose, it’s not the hospital losing money. It’s care that we provide for the uninsured that becomes increasingly more challenging under this scenario.”
Missouri would stand to lose $2.2 billion by 2025 if all the scheduled cuts take place without any measures to offset them. Texas is one of the other 18 states in addition to Missouri that hasn’t expanded Medicaid. Shields thinks, given the hardships brought on by Hurricane Harvey, there may be room for Texas and Missouri lawmakers to work together to secure DSH funding.
“I think we anticipate them receiving more levels of people at hospitals that lack insurance. Our hope is that states like Texas will partner with states like Missouri, and our legislative delegations will work to find a resolution on this.”
Also of concern heading up to the September 30th deadline are two sources of reimbursement that rural providers tend to rely on – the Medicare Dependent and Low Volume Hospital systems.
Low Volume facilities treat small quantities of people that are highly dependent on Medicare. Dave Dillon with the Missouri Hospital Association says those hospitals feel the squeeze because they deal with fewer people who have more medical complications.
“The patients in rural communities tend to be older, they tend to be sicker,” said Dillon. “So, Medicare as a payer is more important to rural hospitals than it is to urban hospitals, because they have a lower volume of patients, and they have Medicare as a primary payer more often.”
The Medicare Dependent Hospital program assists hospitals with a high volume of patients – more than 60% – who fall under the federal program. Capital Region Medical Center in Jefferson City is the biggest beneficiary this subsidy in the state.
Capitol Region spokesperson Lindsay Huhman says a sudden loss of funding would leave the hospital with a shortage of $3 million, and services would have to be cut somewhere. “If we have to look at other areas to make up those costs, that’s potentially reducing some of the care that we can provide.” 22 hospitals in Missouri receive either Medicare Dependent or Low Volume funding. Eight qualify for Medicare Dependent subsidies.
Chip Hahn of the Federation of American Hospitals says because such facilities are concentrated in rural communities, they have an outsized economic impact. “It’s one of the defining resources in the community,” Kahn said. “Obviously people depend on it for their healthcare, but it usually is the largest employer.”
The Children’s Health Insurance Program, or CHIP, enjoys strong bipartisan support. It’s thought that the other three that face an end of the month deadline could be bundled together with CHIP and renewed together. In 2015, the Medicare Dependent or Low Volume programs were extended under such an arrangement.
CHIP was created by Congress in 1997 to provide health coverage for uninsured children in moderate – to low – income working families who are not eligible for Medicaid. Dillon, with the Missouri Hospital Association, says the popular program is important to maintain for a number of reasons.
“It provides access to folks who otherwise wouldn’t have health insurance for their children – access to well care for young kids, to vaccinations and preventive care that are really important for young children.”
If the four expiring programs are not renewed by September 30th, their funding will begin to dry up within a few months.