Hospital fights for reimbursement
By Phyllis Moore
Published in News on January 19, 2011 1:58 PM
The board of directors at Wayne Memorial Hospital on Tuesday joined 52 health care systems in the state and passed a resolution calling for state legislators to enact a plan to help correct inequities in payments for Medicaid and uninsured patients.
The effort is designed to position North Carolina in line with other states in terms of drawing down Medicaid dollars, said Becky Craig, the hospital's vice president of finance. The federal government matches each state-provided Medicaid dollar with two federal dollars.
"Public and private hospitals in North Carolina, we roughly treat the same number of Medicaid and other uninsured patients," Mrs. Craig said. "Under the current plan, the public hospitals were the ones putting money into the pot from whom to draw federal dollars."
Unfortunately, she added, the current plan has resulted in increasingly lower rates to the private hospitals that serve Medicaid and uninsured patients, compared to public hospitals. Budgetary challenges across several states have created difficulties fully funding the cost of these patients.
Over time, it has become a "fairness issue," she said, prompting the N.C. Hospital Association to develop a formula whereby federal dollars could be drawn upon to supplement losses associated with treatment of Medicaid and uninsured patients.
"The way the system has worked has produced an inequity in payments between public hospitals and non-public hospitals," said Don Dalton, vice president for public relations with the NCHA. "That's one of the areas we're seeking to address to see that hospitals are paid equitably regardless of their ownership status.
"When I look across the state and we look at the 10 hospitals (that have the heaviest Medicaid load), five of those are public and five are non-public. So it doesn't make good public policy for those hospitals to be paid differently for the treatment of similar patients."
As part of the finance committee's report to the hospital board, incoming board chairman William Broadaway said the assessment would allow additional funds to flow into the state for hospitals to offset Medicaid losses, which exceed $1 billion a year in North Carolina. At Wayne Memorial, actual costs incurred by uninsured patients and those covered by Medicaid exceeded Medicaid payments by more than $13 million in 2009.
If the legislation passes, it could mean the possibility of an additional $6 million in supplemental reimbursement for the hospital, Mrs. Craig said.
Earlier, she had told the finance committee that the assessment will cost the state and patients nothing and will add $43 million to the state's coffers.
It would also be a potential hedge to the rising cost of insurance, stimulating the economy and helping hospitals continue to employ more than 180,000 North Carolinians.
"These additional funds would supplement the money we already receive from Medicaid," she told the board. "This would be a very positive thing for patients at Wayne Memorial."
Hospital president William Paugh said similar meetings and resolutions are being presented around the state and that he anticipates it will be handily endorsed.
"The state legislature's got to get into it," he said. "It requires legislation. There's a bill and they're actually putting together sponsors for that."
Dalton said the NCHA board had also unanimously approved the proposal and is optimistic about its being put forth during the upcoming legislative session.
"We hope the legislature will pass our proposal into legislation and enable hospitals to contribute funds that then would be matched by the federal government," Dalton said. "Most of those funds flow back to the hospitals to help pay for care to the medical patients. ... I think the state recognizes that hospitals are their partners and caring for the less fortunate in our state."