The U.S. Supreme Court’s ruling on the Affordable Care Act “muddied the water” leaving the state’s hospitals in a troubling situation, according to the head of the Louisiana Hospital Association.
Under the act, Louisiana hospitals face big cuts in Uncompensated Care payments under Medicare, but those cuts won’t be offset by a massive expansion of Medicaid coverage, said John Matessino, LHA president and chief executive officer.
“Hospitals gave up a lot of money in Medicare, $155 billion nationwide, off of future increases to fund some of that coverage,” Matessino said during an interview following the Supreme Court decision.
Now the Supreme Court is saying states don’t have to increase their Medicaid enrollment if the states don’t want to, he said. But the UCC dollars will still begin to ratchet down in 2014.
The hospitals agreed to the uncompensated care funding cuts because the Medicaid expansion meant more people would be covered by insurance, and there wouldn’t be as much need for that money, Matessino said. Now those uninsured people still won’t have coverage, and hospitals won’t be able to get any kind of uncompensated care money, not that the non-state hospitals were getting a lot to begin with.
“It’s kind of a double whammy,” Matessino said.
It’s much worse for the LSU Health Care System hospitals, which depend heavily on the UCC money, Matessino said.
“Suddenly if all that money goes away, we’re going to be in a kind of interesting bind as far as the finances go,” Matessino said.
Gov. Bobby Jindal has said he will not expand Medicaid if he doesn’t have to and wants “Obamacare” repealed and replaced.
States that don’t expand Medicaid are still supposed to get the same money at the same rates, but it’s unclear what will actually happen, Matessino said. Much of that won’t become clear until all of the Affordable Care Act regulations are written.
Matessino said he can understand a lot of Jindal’s reasoning.
The states don’t know exactly what kind of federal dollars are going to come with the expansion or how long that money will be available, Matessino said. The federal government is supposed to pay for it initially, and then after a few years, the additional funding will be the states’ responsibility.
“We don’t have the money to pay for the Medicaid population we’ve got now,” Matessino said. “And then this Transportation Bill deal certainly doesn’t help matters at all.”
The bill will force Louisiana to hack $859 million out of the Medicaid program over the next two years. The casualties include the elimination of uncompensated care funds for the LSU system’s medical facilities, ending programs that provide care for women with breast and cervical cancer, the Medicaid hospice program and Medicaid support for foster children.
The cuts could also affect Bayou Health, Jindal’s program to privatize some healthcare for the poor. At press time, it was unclear how the cuts might affect private insurers’ efforts to form networks of physicians, hospitals and healthcare facilities to provide that care.
The Transportation Bill took away some of the handiwork of Sen. Mary Landrieu, D-La., he said. Granted, the additional Medicaid funding wasn’t supposed to last that long, but it was helping out with the state’s budget problems.
As if that weren’t enough, rural hospitals may see their Medicare payments cut in October. A Medicare Payment Advisory Commission report issued in late June says access to rural healthcare is similar to that in urban centers, and that the reimbursement for rural hospitals is adequate.
“It’s like everything that could go wrong went wrong this week as far as our current Medicaid situation,” Matessino said.
Matessino said the Supreme Court’s ruling, the Transportation bill and the threat of more cuts to rural healthcare providers make hospitals feel like they’re walking around with a big target on their back.
“I realize that hospitals are where a lot of the money is, no question, so that’s why they keep looking at hospitals,” Matessino said. “But we want to keep saying as far as the Affordable Care Act goes, ‘Don’t forget we gave up $155 billion for these coverage issues. And we’re not going to get the coverage, and we’re going to get the UCC cut.”
For now, Matessino said, hospitals are trying to make sense of everything in the Affordable Care Act while preparing for the Medicaid cuts and keeping an eye on the fall elections.
What happens during the upcoming presidential and congressional elections has the potential to change lots of things, Matessino said.
There are lots of variables floating around right now, he said. President Barack Obama could be re-elected, the majority party of the Senate could change from Democrats to Republicans.