Hospitals leery about financial impact of state?s Medicaid stand

by Jim McLean

KHI News Service

For Jodi Schmidt and other hospital administrators across Kansas, Medi?caid expansion is a critical business issue not a political one.

Schmidt is chief executive of Labette Health, a 99-bed regional medical center that serves Parsons and several surrounding communities in southeast Kansas.

She said the money being lost because of the decision by Gov. Sam Brownback and legislators to not participate in the first year of expansion could mean the difference between the hospital finishing the year in the black or with a deficit.

?Whatever your politics, the reality on the ground for hospitals is that Medicaid expansion is critically important for us,? Schmidt said.

Expansion could provide coverage to an estimated 85,000 Kansans who make too much to qualify for the state?s existing Medicaid program?called KanCare?but too little to be eligible for federal tax credits to help them purchase private coverage on the Health?care.gov exchange.

A study done last year for the Kansas Hospital Association estimated that expanding eligibility to the level called for in the Affordable Care Act would increase federal Medicaid spending in the state by $3 billion between this year and 2020.

The federal government has pledged to pay the full cost of covering the expansion population for three years and no less than 90 percent thereafter. Expan?sion would provide Labette Health and other hospitals in the association?s southeast district an additional $2.7 million a year to share.

The money is needed, Schmidt said, to partially offset anticipated Medicare cuts and looming reductions in federal payments that help hospitals offset the cost of caring for the uninsured.

?We could be seeing an additional $1.7 or $1.8 million in reduced reimbursement next year,? Schmidt said. ?And so this lack of Medicaid expansion is just one more hit and there is only so much individual hospitals can bear.?

?We?ve made some progress with the public and with some legislators in making the case for Medi?caid expansion,? said Bruce Witt, director of legislative affairs at Via Christi. ?We?re at the point now where politics has kind of come into play and that?s where the real challenge lies.?

Put simply, the challenge is getting Brownback and legislators to decouple the expansion issue from Obamacare, which remains anathema to the Republican Party?s base and unpopular with most Kansans, assuming the polls are accurate.

The hospital association has hired former U.S. Health and Human Services Secretary Mike Leavitt, a Republican who served in the Bush administration, to try to persuade Kansas Republican leaders to move forward with expansion using a private-sector approach similar to those being developed or implemented in Arkansas, Iowa, Pennsylvania and a handful of other states.

Witt said he is hopeful progress can be made if expansion advocates with Leavitt?s help can ?engage the business community.?

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