MEC steps back from Medicaid expansion argument

MEC_LogoThe Mississippi Economic Council, the statewide business organization that produced a “blueprint” for Mississippi health care last year, is staying out of the intense legislative debate over whether to expand Medicaid to around 300,000 of the state’s working poor.

With the issue unlikely to be resolved without a special session, the MEC will have more time to study the issue and frame its position, said Blake Wilson, president of the organization that serves as the state chamber of commerce.

“I suspect we will,” have a position by the special session, said Wilson of the organization that last year produced a “The Blueprint Mississippi Health Care” study that spotlighted the potential for the medical sector to increase its role as an economic driver in the state.

Gov. Phil Bryant and leaders of the Republican-controlled Legislature have refused to consider the option of expanding Medicaid under the federal Affordable Care Act. House Democrats who want the expansion have insisted on a hearing and vote on the issue and say they won’t reauthorize state Medicaid funding unless their demands are met.

The funding must be reauthorized by June 30. Otherwise, a shutdown is ahead for the federal-state program that now serves around 700,000 of Mississippi’s poorest children, low-income adults with children, low-income pregnant women and the uninsured disabled.

The MEC, meanwhile, could be pulled in different directions by a membership with strong views on both sides of the issue.

On one side are influential hospital executives and health care advocates who tout the expansion as an opportunity to generate hundreds of millions of dollars in new health care spending while vastly improving the health of a population deemed among the unhealthiest in the nation. On the other are fiscal hawks who worry the expansion could bankrupt the state after 2016, when states taking part in the expansion must pick up 10 percent of the tab. Opponents also include influential conservative policy framers who decry Medicaid expansion as a march toward government control of the health care sector.

In the middle is the MEC – at least for now.

Wilson said the MEC board and its membership want a better understanding of the stakes for Mississippi’s hospitals, particularly the amount of federal money the hospitals would lose that now goes to pay for treating the uninsured. The hundreds of millions of dollars Mississippi would receive by participating in the expansion is suppose to offset the loss of the $152 million the feds now provide hospitals annually for uncompensated care.

That pool of uncompensated care money known as disproportionate share payments is to be cut nationally by $500 million next year. That figure is projected to rise to $18.1 billion by 2020. Beyond that, the reductions in the disproportionate share payments, or DSH, will continue to grow as rates of uninsured continue to fall, federal health care officials say

An article in the Dec. 20, 2012 New England Journal of Medicine by Dr. John A. Graves said a simulation study he conducted found reductions in DSH funding in nearly every state, even under the non-expansion scenario. If Mississippi continues with its plan to forgo expansion, for example, its hospitals would lose about $33 per-patient, per-patient day. Critically, these cuts would occur even if few low-income uninsured Mississippians obtained health care coverage, the Journal of Medicine article said.

With Medicaid expansion and the infusion of new health care dollars, Mississippi’s per-patient, per-day day DSH payment would be cut by $66, according to the article, a loss offset by the new dollars coming in for the expanded Medicaid rolls.

The loss of the $33 per-patient, per-day in DHS payments would further stress a hospital system that now receives DHS payments that cover about 40 percent of uncompensated care costs, or approximately $315 million burden of uncompensated care costs for 2013 alone, the Mississippi Hospital Association says.

With rejection of the federal Medicaid expansion option, things are about to get much worse for hospitals in the state, warned Sam Cameron, Hospital Association president, in an official statement. “It’s been suggested by some that the state will somehow make hospitals “whole” for these cuts in federal reimbursements. Those who make that suggestion are unaware that the total cuts to Mississippi hospitals — again, cuts that are hard-coded in the federal law — total over $4.2 billion over the next 10 years. So it’s time we put that bit of “wishful thinking” behind us,” Cameron said.

Neighboring Tennessee, whose governor declared an opt-out of Medicaid expansion last week, would lose $31 a patient day. That’s an amount that set off worries among hospitals executives and business leaders across Tennessee, said Craig Becker, Tennessee Hospital Association president, in an Associated Press article last.

The prospect of Tennessee hospitals losing existing revenue with no replacement cash from the government while still treating the same number of uninsured has begun to soften resistance to growing the Medicaid rolls, Becker told the AP. Local chambers of commerce across Tennessee have come forward to endorse expansion, he added.

“These are rock-ribbed Republicans,” he said in the AP interview. “But they all scratch their heads and say, ‘Well, if that’s the case, then of course we do this.’”

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