Medicaid reimbursement woes persist

Hospitals concerned over cost-pay gap

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While negotiations continue between federal and state officials over Republican Gov. Tom Corbett's alternative plan to expand Medicaid, hospital officials have a more immediate concern -- the lagging outpatient reimbursement for treating people on medical assistance.

Inpatient care for medical assistance patients has improved, but it has been 22 years since hospitals saw a Medicaid payment increase for outpatient care, said Denis Lukes, vice president of payor relations and reimbursement for the Hospital Council of Western Pennsylvania.

"Hospitals today are getting only 30 to 40 percent of their costs for medical assistance outpatient services" such as CT scans or laboratory work-ups.

The worry is that as more people are added to the Medicaid rolls, the disparity between the cost and the payment for providing care will grow ever wider.

If they get paid at all.

Since the last increase in 1991, outpatient services have expanded to include, for example, some chemotherapy treatments. But because the reimbursement schedule has not been updated, the treatments carry no reimbursement so hospitals eat that cost, Mr. Lukes said.

Also, there is no provision for reimbursing "observation" cases, where a patient may be in the hospital for one or two days for chest pain but never admitted.

"It's completely irrational," said Mr. Lukes.

Carey Miller, spokesperson for the Department of Public Welfare, which oversees the state medical assistance program, said the governor's plan, in which newly eligible people will get essential health benefits through qualified plans "should address the issues associated with many of the traditional MA program coverage and payment issues that hospitals and other providers have raised with the department."

A remedy can't come too soon for southwestern Pennsylvania hospitals.

In a just-released hospital council survey, the region's hospitals reported their operating margin for the April-to-June quarter was 1.81 percent, down from 4.44 percent for the same period a year earlier -- a near 60 percent drop. Total margins also fell, from 4.76 percent to 3.15 percent, a 34 percent drop.

Meanwhile, uncompensated care rose 7 percent, breaking the $1 billion mark, and charity care was up 18 percent, to $571 million.

One positive sign: Bad debt was down 5.3 percent at $446 million for the quarter.

Community hospitals are particularly hard hit, Mr. Lukes said, because they see more people on an outpatient basis.

"What we would like to see is those hospitals be reimbursed at a reasonable level for providing those outpatient services," he said.

"Who can survive when you're frozen at a particular payment rate for that duration of time?"

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.


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