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Medicaid Ruling Creates Major Budgeting Problem

Karen Minich-Pourshadi, for HealthLeaders Media, July 2, 2012

Freas says uncompensated care at Southwest General is 4% of net revenue, but she's unclear how the Supreme Court's ruling will affect her organization's Medicaid payments and payer mix. For forecasting purposes, though, Freas is assuming that Ohio will participate in the expanded Medicaid program, which will cause her organization's uncompensated care levels to decline while Medicaid numbers will increase.

"If they don't participate, my downside isn't as bad as it may be at other hospitals because we don't get [Medicaid] DSH," she says. For now Freas says she'll watch to see how Ohio responds to establishing the insurance exchanges—a process which hasn't started yet.

"At the end of the day, we are focusing on finding ways to reduce the cost of delivering care regardless of whether there's PPACA or something else [in effect]," she says. "There's always been uncertainty [in healthcare], now there's just another layer of it. Dealing with [change] is just part of what CFOs do."

Freas, Freed, and Fifer all agree that moving ahead with the transition from volume reimbursements to value is essential, regardless of what happens to PPACA and Medicaid.

"[CFOs] can't wait around and engage in debate endlessly while the government tries to think up a solution," Freed says. "We think the solution will come out of us and the community."


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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2 comments on "Medicaid Ruling Creates Major Budgeting Problem"


David Andrews (7/3/2012 at 9:32 AM)
This article makes a good point. Michigan is faced with covering another 1 million people under expanded Medicaid. I suppose this could be done if the prisons are closed and school funding is cut. Hospitals are covering these people now as a write-off very expensively with no preventive health. Will hospitals start paying the Medicaid premiums to offset the write-offs?

S Harbaugh (7/2/2012 at 3:07 PM)
I am completely amazed that we have so many healthcare "leaders" looking at the issue of Obamacare from a completely myopic, selfish viewpoint of how their individual organizations will benefit or not benefit from the law! What about the concept of Constitutional limitations on federal power? What about the loss of individual liberty? At the end of the day, hospitals are going to saddled with even more federal regulations, reporting requirements, and mandates. No state that is governed by competent leaders is going to willingly sign-up for an expansion of Medicaid when they cannot accurately forecast the increased cost, in addition to having to pay 90% of these costs after 3 years. Rather than being homers for the current administration and not wanting to rock the boat, the AMA and HFMA might want to re-focus their energies on standing up for what is right, rather than for what is expedient.