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Hospital Sues WV Over Medicaid Reimbursements

John Commins, for HealthLeaders Media, November 12, 2010

Appalachian Regional Healthcare, Inc. filed notice this week that it will sue the West Virginia Department of Health and Human Resources and subsidiary Bureau for Medical Services for low Medicaid reimbursements that threaten the financial viability of Beckley ARH Hospital.

"We do not take this step lightly but do it to protect our patients," Rocco Massey, CEO of BARH, says. "Medicaid reimbursements have been covering only two-thirds of our costs for providing medical care, so BARH has been suffering a substantial financial loss. These Medicaid rates jeopardize BARH's continued ability to provide medical services to all of its patients.”

In fiscal year 2009, the health system says, the 173-bed, not-for-profit BARH received only $9.9 million for the $14.7 million the hospital spent to treat Medicaid patients. Of the $9.9 million in Medicaid reimbursements, $8.2 million came from federal funds. Of the $1.7 million the state put in that year to match federal funds, $1.4 million came from BARH itself through the Medicaid provider tax the hospital pays. The state put in only about $300,000 of its own funds that year for Medicaid reimbursements for BARH, the health system alleges.

"If the state had put in just $800,000 more, the federal government would have matched it with an additional $4 million," Massey says. "That would have covered BARH's Medicaid deficit in fiscal year 2009."

The West Virginia Department of Health and Human Resources offices were closed on Thursday, Veterans’ Day, so state officials were not available for comment.

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