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Uncompensated Care Faces a Double Hit in Some States

Philip Betbeze, for HealthLeaders Media, May 22, 2013

"We'll eliminate or reduce clinical services, period," Haupert says. "One example I gave to the governor [Republican Nathan Deal] personally is that Grady is the state's second-largest provider of mental health [care]. If this happens, can we continue to provide it? We could save $25 million to $30 million a year by not doing it, but what does that do to the state? In this case the law of unintended consequences is significant."

Other hospitals in less populated areas of the state, he predicts, will simply close.

"We have 15 hospitals that will close if the state does not expand its Medicaid program or we don't get the disproportionate share funding issue resolved, and I don't see too many governors who want that on their hands," he says.

Many of the states that are so far rejecting the Medicaid expansion are the same ones that are not planning on setting up insurance exchanges on their own. Though both pieces of the legislation have serious implications for hospital revenue, the delays that are expected to surround states that aren't setting up exchanges could have a knock-on effect on revenues for hospitals in those states. 

Hard lobbying
Like Haupert, Siegel says hospital leaders need to take their issues straight to their governors and paint the picture. He says it can be effective to partner with businesses to push for the expansion.
"Not expanding is an act of fiscal insanity. This is a core economic issue," he says. "States that do not expand are literally taking their federal tax money and giving it to other states. It's hurting patients and small businesses in your state."

But some governors seem steadfast, at least for now. That's why, in parallel, NAPH and hospitals that will be affected by the disproportionate share funding drop are working on possible modifications to that piece of the law. But as Haupert says, hospitals are caught in the middle of two government entities engaging in high-stakes brinksmanship.

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1 comments on "Uncompensated Care Faces a Double Hit in Some States"


Bob Olsen (5/30/2013 at 1:00 PM)
Montana is one such state that has chosen not to expand Medicaid or to establish a state-based insurance exchange. The loss of DSH funding will be hard to take. On the other hand, perhaps our State is also saying we don't need the federal funding for coverage, and we have no argument why the federal government should defray our uncompensated care costs.