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Getting federal match is critical for state’s hospitals

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One of the most critical issues facing the state Legislature this session, if not resolved, will have devastating impact on hospitals and the patients and communities they serve.

Just over $45 million is needed to provide matching dollars for payments to 29 hospitals across the state.

Since 1994, 29 hospitals have depended on special Medicaid supplemental payments to help cover the cost of uncompensated and indigent care. In some of the smaller hospitals, the payments amount to as much as a fourth of the total revenues. In all cases, the funding has helped offset severe reimbursement cuts in both Medicare and regular Medicaid payments.

With the advent of the new Medicaid program called Centennial Care, these supplemental payments are now taking the form of a Safety Net Care Pool (SNCP) and some enhanced Medicaid rates to the hospitals. We thank the Martinez administration for doing everything possible to preserve payments, but due to federal requirements and compliance, the pool of payments has shrunk tremendously down to about $192 million from a historical high of $278 million. Through the years, counties have provided the non-federal match and are now being asked to continue funding the program, with less total dollars than in the past but in a more structured form.

Hospitals are calling on legislators and counties to fully match the remaining, greatly reduced program.

What’s at risk? The loss of a 3:1 federal match for health care services across the state. Reduction of hospital jobs and services. Potential closure of some of the most challenged hospitals.

The closure of any hospital in our state would have a monumental impact on patients, other providers and local business.

But immediate concerns revolve around the tough decisions being made about which services can be supported in the changing health care environment. Within the last four years, three rural hospitals have dropped their obstetric service. In 2013, hospitals have eliminated services in home health, ICU, clinics and physician offices.

Last year, New Mexico hospitals had an employment impact of 61,766 jobs, adding $2.77 billion in compensation and $6.5 billion in economic activity to the state. In response to ongoing reimbursement cuts hospitals are “redefining the ‘H'”. With more focus on primary care and prevention, hospitals of the future will fill new roles. Inevitably, these changes impact the mix and number of staff that are needed. In recent years, fewer physicians establish their own free-standing practice and more are employed by the hospital at a time when they can least afford to do so. A recent study showed 965 physician vacancies across the state.

Expanded Medicaid and exchange coverage envisioned by ACA will be a blessing to many of those who are currently uninsured, and better coverage should lead to less uncompensated care for hospitals. But as we see daily in the news, the promise is not yet reality. Enrollment has been slow.

With other Medicare and Medicaid cuts and the federal budget sequester, New Mexico’s hospitals are annually absorbing $341 million in reduced payments.

All of these changes require the full and stable funding of the SNCP supplemental payments.

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