Medicaid expansion is not the case. Instead, it’s obscure federal funds that more than 35 states have used to enhance Medicaid payments to hospitals and other providers. But, are states held to account?
Emanuel Medical Center in rural Georgia loses more than $350,000 a month while serving low-income and uninsured patients. According to state Medicaid officials, a new state financing proposal may considerably lower such shortfalls, not just for the 66-bed Swainsboro institution, but for most rural hospitals in Georgia.
It is not Medicaid expansion, which Georgia Republican leaders have vehemently opposed. Instead, the state Department of Community Health is taking advantage of an underutilized Medicaid financing possibility that has been quickly adopted by more than 35 states, including the majority of those that have expanded the federal insurance program.
The additional federal funds are provided through an opaque and confusing process known as “directed payments,” which are only accessible to states that employ health insurers to offer Medicaid services.
The Medicaid and CHIP Payment and Access Commission (MACPAC), which advises Congress, estimates that in 2020 these unique funding streams, which have been given the go-ahead by federal health officials, will provide more than $25 billion to states.
When asked for an updated total, the Centers for Medicare and Medicaid Services referred KHN to individual states. “CMS has not publicly revealed overall spending linked to state-directed payments,” agency spokesperson Bruce Alexander stated.
The Government Accountability Office, Congress’s watchdog agency, and MACPAC, on the other hand, believe that federal health authorities should do more to monitor directed payments and assess whether states are meeting the program’s goals, which include better access and quality of care. Several organizations have stated that more transparency is required.
Less than 25% of directed payment plans that had been in place for at least a year had evaluations that could be read, according to a MACPAC report from the previous year.
GAO and MACPAC “are asking a lot of concerns” about directed payments to federal health agencies, according to Deborah Lipson, a senior fellow at consulting firm Mathematica who has looked into the matter. It costs a lot of money.
Lipson stated that CMS has yet to produce reports on the program’s quality metrics.
The CMS, according to Alexander, “takes our responsibility in monitoring and transparency seriously, and we are working together with our federal and state partners to strengthen our supervision and transparency” of directed payments.
Medicaid is the federal government’s healthcare program for low-income and disabled people. It is funded jointly by the states and the federal government.
In 2016, CMS introduced the directed payments program. Georgia authorities expect that the state will receive $1 billion in federal payments for hospitals and other medical providers this fiscal year through its directed payment programs.
California estimates that it received more than $6 billion in new federal cash through directed payments alone last year. Between 2018 and 2022, Arizona received $4.3 billion. For 12 months ending in September, Florida earned more than $1 billion.
This unique Medicaid financing may indirectly benefit patients by improving hospital financial stability and providing the opportunity for capital enhancements from the additional cash infusions.
Nevertheless, patient activists and Democratic lawmakers in Georgia argue that expanding Medicaid to address the medical needs of the uninsured is more critical. Medicaid reimbursements for patients who now frequently build up unpaid invoices for care would help hospitals like Emanuel Medical Center.
The uninsured “are not going to get preventive care, which drives up health-care expenses,” said state Sen. Elena Parent, a Democrat from the Atlanta area. “The state’s Medicaid program should have been enlarged.”
Such expansion is unlikely to occur in Georgia shortly, as Republican Gov. Brian Kemp plans to implement new limits on Medicaid enrollment for low-income adults, along with work requirements.
More revenue for hospitals and other Medicaid medical providers occurs through many channels under directed payments, including minimum service fees, a general reimbursement increase, and pay raises based on the quality of treatment.
Payment is depending on the number of services supplied. Lipson said that if one hospital handled more Medicaid patients than another, its reimbursements would be higher.
“The magnitude of states’ directed payment proposals first shocked CMS,” Lipson remarked. She said that some states had 25 or more. These must be renewed on an annual basis. States frequently support their share through hospital assessments or transfers from public finances, such as hospital authorities, county governments, and state agencies.
Georgia has five of these types of payment options. Its objectives include increasing Medicaid payments to hospitals and doctors, bolstering the healthcare workforce, and enhancing health outcomes and equity, according to Cindy Noggle, commissioner of Georgia’s Department of Community Health, which administers Medicaid.
Grady Medical Hospital in Atlanta, a major safety-net provider, expects to collect $139 million from four Georgia programs.
“It’s a huge benefit for us,” said Grady’s chief policy officer, Ryan Loke. “Grady would be in a far worse situation without this money.”
Grady is seeing an increase in Medicaid and uninsured patients who were previously served by the adjacent Atlanta Medical Center, which closed last year.
State Sen. Ben Watson, a physician, and Savannah-area Republican pointed out that such safety-net hospitals, which serve a substantial proportion of the uninsured, are receiving more pay through Medicaid-directed payments, which helps them offset some losses.
Georgia intends to use these financial sources as a foundation for providing additional assistance to rural hospitals.
Grady and other hospitals will approach or hit their typical funding ceiling for institutions that serve a “disproportionate share” of impoverished patients as a result of the additional payments. The state would divert nearly $100 million of the extra funds to rural hospitals.
The directed payment funds, according to the Georgia Hospital Association, are beneficial but won’t be enough to compensate for the costs of free care for those without insurance.
They aren’t considering [hospitals’] bad debt, according to the executive with the company Anna Adams. “A patient who is insured is healthy. As many people as possible should be covered, in our opinion.
Nevertheless, officials at Georgia’s rural hospitals are looking forward to the anticipated increase in Medicaid money.
“It will put money in the coffers of struggling rural hospitals,” said Jimmy Lewis, CEO of HomeTown Health, a state group of rural hospitals.
Emanuel Medical Center CEO Damien Scott is “cautiously optimistic” about the next allocation. On his wish list: bringing a pediatrician to his county, which currently lacks one, and getting enough space to relocate the hospital’s lone MRI machine from a truck into the hospital building.
“We battle every month for our survival,” he remarked.