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2 hospitals to sue state over Medicaid reimbursements

PASGACOULA — Two health care systems plan to sue the Mississippi Division of Medicaid over what they describe as a flaw in the state’s funding formula for Medicaid.

In a news release Wednesday, Memorial Hospital at Gulfport and Singing River Health System assert the payment formula used to reimburse community hospitals for care provided to the uninsured and Medicaid beneficiaries failed to pay them more than $20 million in 2016.

“In their current form, Medicaid payments as well as prior formulas for indigent care have created a scenario of winners and losers with funds unevenly distributed among providers,” Kevin Holland, CEO of Singing River Health System, said. “While our coast hospitals are losing tens of millions in funding for low income patients, other providers in the state have actually enjoyed a windfall that exceeds their costs of care, which is unfair.”

Memorial and SRHS is seeking to recover underpaid Medicaid funds and to correct the funding formula going forward to assure fair and equitable distributions to health care providers across the state.

A news release announcing the intention to sue said the two hospitals serve as safety nets for inpatient and outpatient services. Some of the costs for caring for these patients are recovered through supplemental payment programs managed by the Division of Medicaid. Budgeted funds are available at the state level, but the funding formulas used for individual hospitals are flawed.

“Over the past several years, we’ve been in communication with federal and state officials as well as the Division of Medicaid regarding these underpayments and the flawed funding formula. Federal agencies have agreed with our findings but at the state level where the funds are issued we have been unable to reach a resolution,” Memorial Hospital President/CEO Gary Marchand said. “We have no choice now but to file suit to protect access to healthcare services.”

The news release said Harrison County has the second highest number of uninsured patients in the state at about 35,000, while Jackson County has nearly 25,000.

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