Published: December 12, 2007 11:04 pm      

Hospitals may face staff cuts

Lack of Medicaid reimbursements cited as reason for possible layoffs

Nearly a quarter of Mississippi residents rely on Medicaid for their health care needs, and many of them take comfort in the law that requires hospitals to provide emergency room care to anyone regardless of insurance status.

Hospitals, in turn, rely on reimbursements by Medicaid to cover the costs of caring for these patients.

But when the reimbursements don't match the costs, hospitals have to make up for it somewhere.

Two ways that this can be done are by raising the costs to patients who are insured and by cutting staff. Rush Health Systems, according to a statement made by company officials in October, may be taking the latter route and laying off an undisclosed number of employees sometime in the near future.

State Rep. Greg Snowden, R-Meridian, believes that the funding problem could be worked out if the Mississippi Hospital Association and Mississippi's Division of Medicaid would both be more willing to compromise as to reimbursement amounts. He believes that a lawsuit filed against Medicaid by the MHA and 43 Mississippi hospitals has created bad blood between the organizations.

"First and foremost," Snowden said, "we need the MHA and Medicaid to sit down and come up with a formula that will work for everyone."

Rush executive Donnie Smith said in an October television interview that the legislation could solve the problem by authorizing an increase in state Medicaid funds. Smith now refuses to comment on the issue, saying only, "I don't know how these rumors (about layoffs) got started."

Snowden believes the aim of MHA's lawsuit was to "prevent Medicaid from raising fees unilaterally so they could get the issue into the legislation." However, Snowden said, the Legislature put off the issue in the 2007 session.

Michael Bailey, chief financial officer of MHA, says that the lawsuit, which is over a tax increase on hospitals, is not related to the reimbursement issue, and that MHA is no longer part of the lawsuit anyway.

Bailey explains that Medicaid recently changed their reimbursement plan, and did not notify hospitals of the changes until after the hospitals had already made their budgets. Some hospitals actually saw an increase in Medicaid reimbursements, but others were left with holes in their budget, having made their financial plans based on reimbursements they had received in the previous fiscal year.

"Hospital administrators are a pretty ingenious breed of people," Bailey said, "but they can't plan on what they don't know about."

State Sen. Videt Carmichael, R-Meridian, hopes that a solution can be found without any new legislation being implemented, but says if the Legislature does have to get involved, he will be a part of it because of the large impact the issue has on Meridian.

"What we're hoping to see is something happen when we get back into our legislative session," he says, "but it will probably never be worked out to perfection ... It may not take legislation, but if it does that's something we'll have to really work on in the next session."

Riley Hospital declined to comment on how they have been affected by Medicaid changes, and Jeff Anderson Regional Medical Center issued the following statement: “Across the state hospitals rely heavily on Medicaid funding. We hope the Mississippi Legislature and the Governor will address this important issue in the 2008 session.”