Medicaid fight pits hospital against hospital

Posted Thursday, May. 02, 2013  comments  Print Reprints

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Representatives of Tarrant County’s two largest hospitals are expected to meet with Lt. Gov. David Dewhurst today to discuss a funding problem that pits them against each other — or unites them in seeking state help to draw down more federal Medicaid dollars.

It’s not the widely publicized political fight over expansion of Medicaid under the Affordable Care Act (Obamacare) that has them making the trip to Austin.

It’s a program that is already in place to deliver innovative care and ultimately reduce per-patient Medicaid costs across Texas.

The question is how to spend money already devoted to that program, and whether state budget writers will help by allocating about $585 million over the next two years in order to get back more than $1 billion in federal funding.

If the state doesn’t come forward with that help, public facilities such as 537-bed John Peter Smith Hospital in Fort Worth will be left to continue to do battle with private hospitals like 726-bed Texas Health Harris Methodist Hospital Fort Worth over money used to care for indigent patients.

Texas Health Resources and other private hospital systems say they are required to care for indigent patients, so they deserve to recoup as much of that cost as possible. Medicaid does not fully cover costs of care, and what’s not reimbursed usually is passed on in the form of higher charges for other patients and their insurance companies.

It’s that smoldering fight that apparently has grabbed Dewhurst’s interest.

“He’s asked for the meeting, and we plan to be there,” said Barclay Berdan, chief operating officer and senior executive vice president of Texas Health Resources, parent of Harris Methodist Fort Worth.

Dewhurst is in the middle because the House and Senate, in adopting separate budgets for 2014-15, have taken different sides on the public hospital/private hospital divide. A conference committee has been appointed to work out that and other differences between the two chambers.

The House essentially has taken the side of the private hospitals. Most of the hospitals in rural parts of the state are private, and rural representatives hold considerable sway in the House.

The House budget contains a rider that would force public hospital districts to devote more tax money raised from local residents to help draw down the maximum amount of federal dollars to help pay for indigent care.

The public hospital districts don’t like being told what to do with their money. And under the current way Texas operates Medicaid, called a “1115 waiver” system, more federal money goes to public hospitals if they devote spending to preventive care and other measures aimed at ultimately reducing per-patient costs.

The Senate budget does not contain the rider prescribing how public hospital district money should be spent.

The public hospitals have agreed to devote some of their money to help the private hospitals, says Berdan, the Texas Health Resources COO.

But that still leaves the state short of the amount that would bring the maximum federal Medicaid funding. The budget shortage is about $300 million in 2014 and $285 million in 2015, Berdan said.

That total $585 million plus an additional $450 million would come back from the feds if Texas can come up with the rest of the initial investment.

The hospitals are at a stalemate after months of negotiations. The House and Senate are divided. It’s time for someone like Dewhurst to step in and lead.

Funding for Medicaid in Texas has never been strong, and Gov. Rick Perry is dead set against what he sees as overblown and costly Medicaid expansion under Obamacare.

But if that much expansion is too much, at least the state should help hospitals get as much federal reimbursement as they can for what they are already doing.

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