Hospitals Divided Over Fee Plan To Boost Federal Medicaid Funds
Hospitals are expressing mixed views on a bill (AB 1383) by Assembly member Dave Jones (D-Sacramento) that would impose a two-year hospital fee to help the state raise funds to qualify for increased federal matching funds for Medicaid, the San Diego Union-Tribune reports.
If the proposed fees help generate $2 billion in state funds, California could qualify for an additional $3.2 billion in federal funding. The economic stimulus law offers a 62%-38% division in federal-state Medicaid funding through 2010, compared with the current 50%-50% breakdown.
The new funds would increase reimbursement rates for hospitals that serve beneficiaries of Medi-Cal, California's Medicaid program. Public hospitals would be exempt from the fees, but could qualify for higher Medi-Cal payments.
However, if officials reject the proposal, California stands to lose the increased federal aid.
Support for Hospital Fees
Hospitals that serve a large percentage of Medi-Cal patients could benefit from the legislation because they are likely to pay less in fees than the amount they would receive in higher reimbursements.
Many hospitals currently spend more to treat Medi-Cal beneficiaries than the state reimburses under the program.
Of the state's 431 hospitals, 200 hold contracts with Medi-Cal. However, budgetary strain is forcing some hospitals to drop out of the program or limit services.
Conway Collis of the Daughters of Charity Health System said California hospitals lost $4 billion in 2008 because of inadequate Medi-Cal reimbursements.
Opposition to Proposal
However, other health care facilities are opposed to the fees because they say the proposal is vague and could compel some hospitals to absorb larger losses.
For example, the measure is unlikely to significantly increase reimbursement payments for hospitals that primarily serve patients with private insurance coverage.
In addition, Kaiser Permanente hospitals oppose the legislation because they say it would not offset the costs of serving low-income people who do not qualify for Medi-Cal because of their immigration status.
Anthony Wright, executive director of Health Access California, said he supports the hospital fees but thinks the revenue should go to state health care services currently facing budget cuts.
Gov. Arnold Schwarzenegger (R) also said he supports using hospital fees to boost funding for health programs.
Some hospital officials say they would support a November 2010 ballot measure that would enact the hospital fee permanently. The proposed measure also would restructure Medi-Cal financing and prohibit lawmakers from shifting the revenue to other sources (Gardner, San Diego Union-Tribune, 7/20).
Jones' bill is "a good idea," a Los Angeles Times editorial states, adding that California "ought to take an unmistakable step toward grabbing its full reimbursements by quickly adopting AB 1383 and allowing talks on the fee details to go forward."The editorial continues that a discussion about securing federal Medicaid funds is "a conversation that should continue, especially now, when California needs every dollar it can get" (Los Angeles Times, 7/18). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.