Hospitals need Medicare, Medicaid increases

Published 11:34 pm Friday, January 16, 2009

Health care in the Black Belt is teetering on the brink of crisis according to Mike Marshall, chief executive officer of Bryan W. Whitfield Memorial Hospital.

“If (lawmakers) don’t pass legislation that increases Medicare and Medicaid funding that hospitals receive, the result will be catastrophic,” he said.

The Senate Budget Committee on Tuesday held a confirmation hearing for White House Office of Management and Budget Director-designate Peter Orszag, during which he discussed the need to reduce spending on Medicare and Medicaid.

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Currently, Medicaid reimburses Bryan W. Whitfield Memorial Hospital 73 percent of the hospital’s cost for patient care. Any proposed cuts, Marshall said, would deepen the financial slope hospitals have to climb to maintain their levels of service.

“Essentially, we lose 27 cents on every dollar of service we provide to Medicaid patients,” he said. “The cuts are designed to save the government money, but it will dramatically affect those of us who provide the services.”

The current reimbursement agreement expires April 1. Ultimately, President-elect Barack Obama’s administration will be the deciding factor in how Medicare and Medicaid spending is dealt with, but Marshall said with Obama’s campaign centering on improving health care, he was hopeful a resolution could be found that would be equitable on both sides.

“BWWMH hasn’t gotten an increase in the reimbursements we receive in more than eight years,” he said. “The cost of everything has gone up in the last eight years, and here we are still operating on a reimbursement schedule that’s eight years old.”

Reimbursements from Medicaid represent 27 percent of the hospital’s cash flow.

Declining reimbursements from the Centers for Medicare and Medicaid Services are just part of the challenges BWWMH faces. Demand from uninsured or under-insured patients continues to climb.

“Last year, from 2007 to 2008, we saw an increase of more than $880,000, about $6.1 million total, in charity and bad-debt care,” Marshall said. “That’s not something we can turn around and write off against revenue. That’s cash. It’s just gone.”

The hospital operates based on the reimbursement it receives. If a patient is uninsured, or their insurance claim is denied, the hospital doesn’t get any form of reimbursement.

“As the economy gets worse and more people start to lose their jobs, bad debt care is just going to go up,” Marshall said. “We aren’t required to treat non-emergent patients, but we do because we choose to not refuse treatment to any patient who presents to our facility. The hospital just has to take the hit.”

Taking hit after hit has put hospitals across the state in a bind. In 2007, 51 percent of hospitals for which the state hospital association holds records for posted a negative revenue margin.

Demopolis’ hospital managed to remain in the black in 2007, but saw a negative margin for 2008.

“I haven’t talked to a hospital administrator in Alabama yet that made any money in 2008,” Marshall said. “I’m sure there are some out there but I doubt there are very many of them.”

Tuesday, federal lawmakers got a detailed look at a new stimulus package that topped $850 billion. Of that, $87 billion would be set aside for Medicaid. Another $3 billion would be spent to roll back Medicaid regulations imposed by the Bush administration.