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Hospital warns service cuts possible if Medicaid is not expanded in state

Sunday, March 23, 2014

By MICKEY POWELL - Bulletin Staff Writer

Memorial Hospital in Martinsville may have to eliminate some services if Medicaid is not expanded in Virginia, according to a hospital official.

Dr. Saria Saccocio, regional chief medical officer for LifePoint Hospitals, which owns Memorial, said no specific services are targeted yet.

Birthing and pediatric care are possible cuts, she indicated. Many hospitals have stopped providing those services because they traditionally have not been profitable, she said.

“We want to provide them because it’s the right thing” to do, Saccocio said.

But with less money coming into the hospital to fund services, “something’s got to give,” she said.

Memorial’s federal funds have been slashed by more than $2.8 million since 2010 due to provisions of the federal Patient Protection and Affordable Care Act, a document furnished by the hospital shows.

Saccocio said the cuts include 2 percent to all Medicaid-covered services as a result of federal budget sequestration plus penalties when Medicaid patients have been readmitted to the hospital too soon for the feds’ liking after they were discharged from a previous inpatient stay.

The hospital expects to lose almost $5.24 million more in federal funding through 2016, the document shows.

If the Medicaid program is expanded, Memorial expects to recoup $1,474,755 of the roughly $5.24 million, the document shows.

That “should help keep us afloat” without greatly worrying about reducing services, Saccocio said.

Lee Regional Medical Center in Pennington Gap closed Oct. 1, somewhat due to cuts in federal reimbursements, published reports show. Saccocio said she expects the cuts eventually will force more hospitals to close.

However, Memorial will not be one of them, Saccocio said. LifePoint remains committed to caring for Martinsville-area residents, even if they cannot pay for the care, she said.

Memorial will not deny care to any patients because of their inability to pay, she emphasized. Federal law requires hospitals that accept federal funding to not refuse emergency care to anyone, regardless of their ability to pay.

The 2013 Industry Report produced by Virginia Health Information shows Memorial had a profit margin that year of a little more than 4 percent.

That margin could erode, perhaps with Memorial going into the red, so to speak, if the hospital has to provide much more charity care, according to Lycrecia Turner, the hospital’s patient financial services director.

Going into the red would not necessarily mean services would be cut, but at that point “we’d certainly be looking at our options,” Saccocio said.

“Our plan is to hold onto every service possible,” she said.

Right now, hospital officials are trying to figure out how to do that if Medicaid is not expanded, she added.

Charity care accounted for about 231?4 percent of medical care provided by Memorial in 2013, the industry report shows.

That is “very, very high” within the hospital industry, Saccocio said, “but typical” of hospitals in communities with high levels of unemployment and uninsured residents.

She did not know the average charity care percentage among hospitals.

The General Assembly adjourned March 8 without passing a state budget, largely due to a stalemate on whether to expand Medicaid, a federal insurance program for people who are poor and disabled.

Gov. Terry McAuliffe, a proponent of Medicaid expansion, called a special session that will begin Monday to resolve the budget dispute.

Despite cuts in Medicaid that have been imposed due to sequestration and the Affordable Care Act, the act gives states extra federal funds to expand their Medicaid programs to cover adults younger than 65 earning up to 133 percent of the federal poverty level. That means, for most people, $16,104 a year for one person and $32,913 for a family of four, according to the federal website healthcare.gov.

But states do not have to accept the Medicaid expansion, the website shows.

Under a Medicaid expansion in Virginia, it is estimated that 47 percent of uninsured Henry County residents and 53 percent of uninsured Martinsville residents would qualify for the aid, the hospital’s document states.

Saccocio and Turner were not able to immediately determine how many of Memorial’s patients are on Medicaid or the number of uninsured county and city residents who would qualify under an expansion.

The major reason why Memorial favors a Medicaid expansion, officials say, is the positive effects it could have on the community and its residents.

If more people are able to get Medicaid, more people will feel compelled to seek medical care for their ailments, according to Saccocio.

The hospital has treated patients who suffered chest pains, including some who doctors later determined had suffered heart attacks, but postponed seeking treatment because they were not able to pay for it, Saccocio said.

Because more Medicaid funding could keep Memorial from cutting services, the hospital would be better able to help attract companies to the area, she said.

“Employers don’t want to bring businesses” to areas that do not have full-service hospitals, Saccocio said.

Businesses already are having to pay more in taxes pertaining to health care and insurance, she said, so why should the General Assembly “not bring some of that money back to Virginia so we can see benefits from it?”

 

 
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