Both area hospital systems urge expansion of TennCare

Hank Hayes • Feb 7, 2013 at 11:44 AM

BLOUNTVILLE — The region’s two major hospital systems pushed Thursday for expanding Medicaid coverage in Tennessee, and state lawmakers are going to see if the expansion’s math works.

Wellmont Health System and Mountain States Health Alliance officials expressed support for Tennessee’s Medicaid expansion, ruled optional under the U.S. Supreme Court’s 2012 ruling favoring the Affordable Care Act (ACA).

That Medicaid program serving more than one million low-income Tennesseans is better known as TennCare, a multibillion-dollar health care initiative two-thirds funded by the federal government.

Without the Medicaid expansion, hospital officials warned they will continue to eat costs from uncompensated care.

“We agreed to significant cuts (in payments) for Medicare beneficiaries in the hopes we would have elimination of the uninsured patients that we are caring for today,” Wellmont Chief Financial Officer Alice Pope said at a Tri-Cities Regional Airport news conference.

When submitting his budget proposal to state lawmakers last month, Gov. Bill Haslam deferred a decision on whether Tennessee should expand its Medicaid system.

“We could decide to expand tomorrow, or we could expand it five years from now,” Haslam said in a meeting with members of the Times-News Editorial Board last week.

If an expansion happened, an estimated 145,000 additional people could come into the program in the 2014 fiscal year, according to TennCare. By 2019, that number could reach about 180,000 enrollees.

According to the Tennessee Hospital Association (THA), the federal government would pay the full cost of the expansion for the first three years and at a rate of 93 percent at the end of the next three years.

But distrust with the federal government fueled legislation filed by state Sen. Brian Kelsey, R-Germantown, to prohibit Tennessee from participating in the Medicaid expansion.

House and Senate Democrats, in turn, filed legislation in support of the expansion.

But Kelsey’s bill has been put on hold while the issue gets a thorough examination, according to Lt. Gov. Ron Ramsey.

“I want to have all the facts before us before we make any decision,” Ramsey, R-Blountville, said. “It’s not close to that. We want to make sure we have the correct figures and the governor is having an independent analysis done on what this does cost the hospitals. They have given numbers in the past where you scratch your head a little bit.”

The Haslam administration is also seeking flexibility from the federal government to craft the Medicaid expansion with adequate patient co-pays and other provisions, Ramsey added.

“There’s no timeline on this, but obviously the hospitals want this because it affects their bottom line,” Ramsey noted.

THA trotted out on Thursday an analysis indicating Medicare and other federal cuts would have a $13.3 billion “recessionary impact” on state hospitals over the next decade.

Sullivan County hospitals would see a $326.7 million loss over 10 years, while facilities in Washington County would see a more than $300 million loss, according to THA’s analysis.

“Tennessee’s hospitals are entering a serious fiscal crisis, the likes of which we have never seen in our history,” THA President Craig Becker warned at a Tennessee Press Association meeting in Nashville.

MSHA officials said the Medicaid expansion is their number one lobbying issue this year with lawmakers.

“We’re certainly urging them to move ahead and do that (expansion).” said MSHA Chief Financial Officer Marvin Eichorn. “Hospitals are major economic drivers in our communities. ... It really hits home to both Wellmont and Mountain States.”

When asked if the hospitals could wait a year before the expansion happens, Eichorn said: “We’re doing contingency planning now if it happens and on the downside if it doesn’t happen. The numbers are so big. ... Over time, the numbers get bigger.”

Pope pointed out Wellmont can’t make money from uninsured patients.

“When a patient doesn’t have any access to health insurance, we collect very little from that patient for treating and providing that care,” she said. “When a patient qualifies for Medicaid, it at least covers a portion of that cost. It doesn’t cover 100 percent of that cost of care, but it at least contributes something.”

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