“I cannot give you any false hope that Medicaid expansion will pass in the state,” 33rd District State Senator Mike Cunningham told Texas County Memorial Hospital board members at their monthly meeting on Tuesday.
Cunningham was invited to the meeting to speak with board members about healthcare from a legislative point of view. It was Cunningham’s second visit to TCMH, one of four hospitals in his congressional district.
Cunningham told those present that he grew up in a small town in Northern Missouri and was familiar with small town healthcare needs.
Wes Murray, chief executive officer at TCMH, explained to Cunningham that TCMH does not receive support through a local tax nor does the hospital receive “cost plus” reimbursement for Medicare and Medicaid patients because TCMH does not have a critical access hospital designation.
“It is becoming increasingly difficult for small hospitals that aren’t critical access to break even when providing care to our patients,” Murray said. He projected that TCMH’s gross revenue will be reduced by $5.8 million in 2013 and 2014 due to reimbursement reductions.
Cunningham explained that of the 34 state senators, one-third support Medicaid expansion, one-third support Medicaid expansion with certain provisions in place, and one-third are completely against Medicaid expansion.
“There’s a less than 50 percent chance Medicaid expansion will pass in Missouri,” Cunningham said.
Cunningham noted that he would support Medicaid expansion with provisions in place such as a sliding scale, co-pays and deductibles.
“The Medicaid system is broken, and it needs to be reformed,” Cunningham said.
Murray agreed that some changes need to take place in the overall system, and he reminded Cunningham that TCMH must “play by the rules” of Medicaid regardless of who makes them.
“We are required to care for everyone that comes in our door or that calls an ambulance,” Murray said, explaining that 80 percent of the people that would benefit from Medicaid expansion are working but unable to afford insurance.
“We regularly care for and absorb the cost of patients that could receive healthcare coverage and help to pay their hospital bills if Medicaid were expanded,” Murray said.
Murray presented a new report from the Hospital Industry Data Institute (HIDI) showing economic and financial stresses on Missouri hospitals. Texas County and all of the hospitals in Cunningham’s district are experiencing the “most stress”.
The stress test looked at all acute care hospitals across the state and the hospitals’ payer mix ratio; operating margin; uncompensated care as a percent of gross revenue; cumulative cuts through 2019 as a percent of operating revenue and percent change in inpatient volume from 2009.
Hospitals in the South Central region are experiencing the most stress based on financial data collected in the Missouri hospital annual licensing survey, utilization data included in the HIDI inpatient discharges database and future reimbursement reductions that hospitals will experience as a result of the Affordable Care Act and the American Taxpayer Relief Act.
“Small hospitals write off more patient care as a percentage of their gross revenue than all of the medium and large hospitals throughout the state,” Murray said, adding that at TCMH the percentage of uncompensated care is even higher than the percentages from other small hospitals.
The average small hospital has 7.1 percent of uncompensated care as a percentage of the hospital’s gross revenue. At TCMH, the uncompensated care is 8.7 percent of gross revenue.
“Our uncompensated care is up eight percent at TCMH in the past two years, and our inpatient volumes have dropped by14 percent,” Murray said. “We are losing money every month, and it’s scary.”
In the past two years TCMH has cut services and employee hours to trim hospital expenses. Hospital administration took a pay cut, hospital managers have not received a pay raise, and all other hospital employees were awarded very small raises. Hiring freezes for additional positions are in place, and capital purchases are on hold.
“We have numerous employees that would qualify for Medicaid if it were expanded in our state,” Murray said, explaining that a high number of working individuals in Texas County and the surrounding area cannot pay their hospital bills and choose to not seek healthcare services until they are critically ill.
“Expanding Medicaid coverage would provide a percentage of the people that we see a way to pay their healthcare bills,” Murray said. “It could be the difference between a positive and negative bottom line for us.”
Dr. John Duff, senior vice president and chief hospital officer at CoxHealth in Springfield, explained that Cox Health hospitals in rural areas such as Monett also care for a high number of “in between” patients that work at lower wage jobs but cannot afford healthcare.
“These small rural hospitals are serving valuable healthcare needs, but they are at risk without Medicaid expansion,” Duff said, adding, “We wonder how many rural hospitals in Missouri will close their doors before something is done.”
“I am one person of 34, and I cannot convince those dead set against it any more than they sway me,” Cunningham said.
Cunningham explained that there are numerous senators representing the 1-70 corridor, which he described as the area where “80 percent of the people of our state live within 20 miles”.
Cunningham described “the major problem” as “the unknowns at the federal level”.
“What will happen on the federal level with this program?” Cunningham asked. “We don’t want to take that chance.”
Murray reminded Cunningham that in the past the state of Missouri has taken chances with education and transportation funding.
Cunningham said that only about 40 percent of the people that contacted his office were in favor of Medicaid expansion, and 60 percent of the people that contacted his office were against Medicaid expansion.
Cunningham described those in favor of Medicaid expansion as the same constituents that have contacted him in favor of “gay marriage and humane society”.
“I don’t believe that statistic,” Murray said. “I do believe there are people that are against Medicaid expansion in the state, but in the time that our hospital has supported this issue, not one person has spoken against it to me.”
At the February 2013 board meeting, the hospital’s board of trustees unanimously approved a resolution in favor of Medicaid expansion in the state of Missouri.
“We support this expansion in light of what it would mean for providing care for the citizens of Texas County and what it means for our hospital revenues,” Omanez Fockler, chairperson of the TCMH board of trustees, said when the resolution passed.
Board members questioned Cunningham and expressed the need for expanded Medicaid coverage to help TCMH.
Dr. Jim Perry, OD, TCMH board member, cited a recent University of Missouri study which showed a $9 billion loss to the state without Medicaid expansion.
“Do you discount the University of Missouri study?” Perry asked.
“I do,” Cunningham said.
Cunningham questioned how South Central Missouri could have more “stress” than the urban areas of Kansas City and St. Louis where they have “large indigent populations” and “unwed mothers”.
Murray explained that the urban areas have more resources to help those without access to healthcare including healthcare providers.
Perry explained that large population areas have larger industrial base of employment with healthcare benefits which offsets the number of patients without health insurance.
“There are many people in this area that work at jobs that do not provide any healthcare benefits,” Perry said, adding, “We need you to represent us to your colleagues in St. Louis and Kansas City.”
Murray requested that Cunningham “fight” on behalf of the hospitals in South Central Missouri.
“By rejecting the Medicaid option, the state has lost a billion dollars so far this year, and we’re on the hook for another billion through the end of the year,” Murray said, reminding Cunningham that at TCMH and other hospitals uncompensated care is growing higher and faster than ever before.
“I cannot give you false hope that Medicaid will expand,” Cunningham said.
“This hospital and any other rural hospital in the state are subject to close in the coming years,” Murray said. “Our hospital doesn’t receive ‘cost plus’ reimbursement for Medicare and Medicaid patients because we aren’t critical access. We don’t receive local tax dollars. There’s no other hospital in this area. There are no other healthcare providers. We are the largest employer. If we close our doors, $16 million in annual salary goes away from our local economy, too.”
“I am being honest so you all can plan your future,” Cunningham said. “There is no quick cure.”
“But there is a quick cure,” Murray said.
“This hospital cannot plan their future,” Duff said. “The state is driving the bus. The state is deciding the future for hospitals like TCMH.”
Murray pointed out that the state has lagged behind many other states on progressive measures to benefit the state’s citizens such as passing a 9-1-1 cell phone tax.
“Missouri is also lagging behind on attempts to expand Medicaid coverage,” Murray said. “To receive this kind of outlook for our future is just devastating to hear.”
On behalf of the TCMH board of trustees, Perry asked Cunningham to “try to represent us more in Jefferson City”.
In the June financial report, Linda Pamperien, chief financial officer at TCMH, reported that inpatient volumes continued to slide at the hospital, resulting in a $98,010.55 loss for the month with year to date loss of $742,172.56.
Present at the meeting were Murray; Duff; Perry; Fockler; Pamperien; Dr. Schaun Flaim, chief of staff; Dr. Jon Beers, vice-chief of staff; Doretta Todd-Willis, chief nursing officer, Joleen Senter Durham, public relations director; John Casey, Texas County commissioner, and board members Janet Wiseman, Russell Gaither and Mark Hampton.
The next meeting of TCMH board of trustees is Tue., Aug. 26 at 12 p.m. in the hospital board room.