Certain Rural Hospitals Face 10% cut in Medicaid Payments

Wisconsin’s smallest rural hospitals, known as “Critical Access Hospitals” are bracing themselves for a January 1, 2010 cut of 10% in Medicaid reimbursement.

In preparation for the looming cut, three of Ministry Health Care’s hospital presidents Monica Hilt, Sheila Clough and Michael Hammer, along with Langlade Hospital Executive Director Dave Schneider, met Monday with state elected officials to plead for reprieve from the cuts. In the morning, the hospital leaders met with State Reps. Don Friske and Dan Meyer; in the afternoon, they met with Sen. Jim Holperin.

As part of the Wisconsin state budget, the Department of Health Services is administering a $630 million reduction in Medicaid. The cuts do not require legislative oversight, and the hospital leaders are seeking the help of the legislature to protect area hospitals.

Monica Hilt, CEO of Ministry Health Care’s Northern Region stated, “We are preparing for the cut, but these are real dollars – close to $1 million for our four hospitals combined. We remain committed to keeping patients first in everything we do, but we are preparing for difficult adjustments.”

“Without intervention to turn back the cuts,” Hilt noted “…these cuts would require hospitals to take a hard look at the current scope of services offered within the various facilities and given where most of the facilities are with their internal cost structure really our only way to reduce expenses in relation to the decreased reimbursement would be through program/service reduction/elimination.”

“Together, our four hospitals employ nearly 1,000 people in the Northwoods. These include skilled, family-supporting jobs that are critical to surviving and recovering from the economic downturn. To take this cut on the heels of the worst recession in generations is a double-blow,” noted Sheila Clough, President of Howard Young Medical Center and Eagle River Memorial Hospital.

The four executives – sometimes “competitors” in delivering health care – are fully united in opposing the reductions. As an alternative, they support a financing plan that would avoid the cuts to Medicaid.

“Protecting these payments for services to a vulnerable population of patients is a priority for us, not simply financially, but also in terms of the services and programs we can offer our patients and communities,” said Dave Schneider, Executive Director of Langlade Hospital in Antigo.

Medicaid is a state-run health benefit program, which receives approximately two-thirds of its funding from the federal government. Certain disabled or low-income patients qualify for Medicaid coverage.

Under federal legislation passed in the 90s, facilities designated as Critical Access Hospitals receive reimbursement for treating Medicare and Medicaid patients based on the cost of the care. This reimbursement allowed hospitals in vulnerable communities to remain open. Rural hospitals face constant fiscal challenges due to the more aged and disadvantaged populations they tend to serve.

“Changing the way Wisconsin hospitals are reimbursed for treating Medicaid patients is a major shift in public policy affecting the most vulnerable patients and the most vulnerable hospitals,” according to Michael Hammer, President of Good Samaritan Health Center in Merrill.  

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