|Ocala, FL -
January 30, 2012 |
Munroe Regional Medical Center officials are warning that Medicaid cuts proposed by Gov. Rick Scott would rock the hospital for a loss from which it could not recover.
Steve Purves, the not-for-profit hospital's president and chief executive officer, said Scott's proposed $18 million cut would leave the hospital unable to provide services similar to what it now offers patients.
“You might as well reach in your pocket and hand over the keys,” Purves said of the proposal.
Scott plans to make $2 billion in Medicaid cuts in the 2012/2013 budget. Its financial impact on local hospitals was based on estimates from Florida's Agency for Health Care Administration and the Florida Hospital Association.
Some of Scott's proposed cuts could do away with Munroe's enhanced Medicaid reimbursement payments that it receives because of its high number of Medicaid and indigent patients. Currently, the hospital gets Medicaid reimbursements nearly twice the regular rate to reflect its patient makeup.
Scott's plan lumps together hospitals into categories, based on the kinds of services they provide, and pays them all the same Medicaid rate. Critics say the problem is that the “rate banding” doesn't take into account community or hospital characteristics, such as poverty levels and indigent care.
“We can't imagine cuts of that magnitude,” Purves told his hospital's executive board last week.
Scott's cuts would be large enough to erase the 400-bed hospital's surplus revenue. Last year's preliminary revenues over expenses (the hospital does not count these as profits) were $3.7 million. That money was used to buy equipment and repair and improve the facility.
Meanwhile, the Florida House is considering a 7 percent across-the-board cut in Medicaid as an alternative to Scott's proposal. The House version would mean a $3.1 million loss for Munroe.
Medicaid recipients made up 38 percent of Munroe Regional's emergency room business, according to hospital records. The average for Florida for-profit hospitals was 29 percent last year, according to the Florida Hospital Association.
Sixty-eight percent of Munroe's obstetrics (baby delivery) patients are Medicaid patients.
And while Munroe's patient charges are among the lowest in Florida, Purves said raising rates would not help the hospital's bottom line because so many of his patients are already Medicaid recipients or on insurance plans with negotiated, locked-in prices.
He said that for every $1 he raises prices, his hospital would only see about a 5 cent revenue hike.
The proposed cuts follow some of the deepest from last year's legislative session, when lawmakers cut Medicaid reimbursement 12.5 percent, costing Munroe nearly $5 million.
Ocala Regional Medical Center could also get hit hard by one of the proposals.
Under Scott's plan, Ocala Regional would see only a $122,827 Medicaid cut this year. Under the House plan, its Medicaid reimbursement would be cut about $1 million.
Medicaid reimbursement covers less than 50 percent of the actual cost of a service at the hospital, said the medical facility's Chief Financial Officer Randy McVay.
McVay said that although he wasn't considering any cuts now to services to reflect the House's plan, “at what point do cuts and reimbursements stop?”
Bruce Rueben, president and chief executive officer of the Florida Hospital Association, said hospitals are still reeling from last year's $500 million in Medicaid cuts.
And since 80 percent of Medicaid recipients are either children or elderly, those are the people most hurt by the cuts. About 3.3 million Floridians receive Medicaid assistance, about 300,000 more than three years ago.
Instead of cutting Medicaid, the state should focus money on chronic care management, which would help to keep patients out of emergency rooms or back in hospital beds, Rueben said.
As for the proposed Medicaid cuts, Rueben said the cost will be made up elsewhere, most likely cuts in services, increase costs to private insurance providers and reductions in hospital upgrades which all patients would have benefited from.