During its March 7 meeting, the Lake Regional Health System Board of Directors passed a resolution supporting Medicaid expansion in Missouri necessary to receive the maximum federal funding allowable for the program.
“This is not a question of political ideology,” said Kevin Byrne, D.O., board president. “It is a question of supporting local access to quality health care, a stronger state economy and a healthier workforce and population. Leveraging the federal funds available to expand Missouri’s Medicaid program will help reduce the uninsured population, prevent further cost shifting to insured patients and create new jobs.”
Hospitals statewide are facing significant cuts to Medicare and Medicaid reimbursement outlined by the Affordable Care Act. Payments to Lake Regional Health System will be reduced an estimated $2.64 million annually when the ACA is fully implemented next year.
The federal law, enacted in 2010, included a trade-off for health care providers — decreased reimbursement in exchange for increased coverage of the uninsured through Medicaid expansion. The federal government will finance 100 percent of the expansion from 2014 to 2016. After that, states pick up an incremental share of the cost.
However, the U.S. Supreme Court has ruled expansion is optional, and Missouri’s legislature seems likely to vote against the federal funding.
“Federal reimbursement to Missouri providers will be cut regardless of the legislature’s decision on expanding coverage,” said Michael E. Henze, chief executive officer of Lake Regional Health System. “We are asking lawmakers to be pragmatic about this issue, which is vitally important to Missouri hospitals, the communities we serve and our state’s economy.”
Increases in uncompensated care coupled with decreases in federal reimbursement for Medicare and Medicaid patients could lead to increased premiums for the insured, referred to as cost shifting, Henze said.
“Hospitals cannot afford to absorb the ACA’s cuts,” said Henze, noting Lake Regional provided more than $19.3 million in uncompensated care, including the unpaid cost of treating Medicare patients, in fiscal year 2012. “This level of uncompensated care is unsustainable.”
Analysis by the University of Missouri School of Medicine’s Department of Health Management and Informatics found that without Medicaid expansion, Missouri’s privately insured could experience a $1.1 billion increase in cost shifting between 2012 and 2021.
Also according to the analysis, Medicaid reform would generate more than 24,000 new jobs statewide in 2014.
In addition, $15.7 billion in federal funding is projected to flow to Missouri through 2021 if the program expansion is fully enacted.