SCP overhaul may require changes to use of county taxes

October 24, 2013 • Local News

Este articulo explica como cambiará el programa Sole Community Provider en el 2014. El programa incluye fondos para los Servicios de Salud para los Indigentes. Este domingo, el periódico tendrá una versión en español del articulo.

This article explains how the Sole Community Provider Program is going to change in 2014. The program includes funds for Indigent Health Care Services. There will be a Spanish version of the article in the Sunday paper.

A follow-up piece on the possible impact of the changes on health care in Chaves County will run Saturday.

An overhaul to New Mexico’s Sole Community Provider Program, which falls under the umbrella of Medicaid, will require a new funding scheme for some programs at hospitals enrolled in the program across the state.

SCP’s new incarnation, the Safety Net Care Pool, is slated to begin in 2014.

Medicaid also is changing its name and will be remodeled next year. It will become known as Centennial Care in January.

Eastern New Mexico Medical Center and Lovelace Health System are among the state-designated community hospitals that will see an increase in compensation rates for Medicaid claims and a possible dip in coverage of claims that go unpaid by low-income, uninsured patients.

The state remodeled SCP in order to qualify for a special waiver from federal department Center for Medicare and Medicaid Services (CMS). The waiver allows New Mexico to operate its Medicaid program along special guidelines the state determines itself.

The state Human Services Department has proposed changes to the use of a portion of county taxes as part of the [auth] remodeling of SCP.

According to HSD’s proposals, at least part of county tax money used to fund SCP would become entirely entrusted to the state for distribution to hospitals across New Mexico.

The funds are distributed to hospitals based on the amount of money contributed by counties. The new method proposed would allow the state to use a new formula to determine hospital funding on the basis of need, as determined by the state.

HSD Deputy Secretary Brent Earnest said the changes are necessary to create a dedicated revenue stream for Safety Net.

“We still need the county support,” he said.

The department’s proposals are upsetting counties across the state.

Chaves County Manager Stan Riggs said he prefers that the county keep control of the tax revenue it produces. He said that when the state has intercepted county revenues in the past, the county did not receive the funding back in its entirety.

“We want, ‘Leave us alone, come up with your own funding source,’” Riggs said.

The New Mexico Association of Counties passed a resolution last Friday stating it, “opposes any proposal or legislation that would preempt local government authority, by taking from counties the authority to utilize revenues generated by local taxes in the best interests of their citizens.”

The SCP program, established in 1993, requires that counties dedicate funding towards state-designated SCP hospitals, basically community hospitals.

In Chaves County, the required amount usually amounts to $1.5 million, according to Riggs. In most counties in the state, including Chaves, the money comes from one-eighth of a percent of the county’s gross receipts tax.

The county is permitted to contribute additional money if it wishes, and the total contribution is matched by federal funds at a current rate of 2.5 to one, said Riggs.

The combination of county and federal funding is sent to Eastern New Mexico Medical Center and Lovelace and goes mostly toward covering a portion of costs for uninsured patients who qualify for Indigent Health Care Services. Indigent compensates health care providers for claims submitted by uninsured, low-income patients.

Under HSD’s first proposal for changing the funding mechanism of SCP, the whole one-eighth of a percent of gross receipts tax submitted by most counties will be harvested by the state and augmented with federal funds. HSD prefers this method over other options.

Part of the funding would go toward increasing the compensation rate of Medicaid claims.

Under the Affordable Care Act, Medicaid is being expanded to accommodate people who make up to 138 percent of the federal poverty level. New Mexico currently has 560,000 residents enrolled in Medicaid.

According to HSD spokesperson Matt Kennicott, 170,000 New Mexicans are expected to enroll in Medicaid in 2014.

The federal government is covering claims from new Medicaid patients at a rate of 100 percent for the first three years of the new act. Claims filed by people currently enrolled in Medicaid will continue to be reimbursed at a rate of 70 percent per claim.

HSD intends to use the county funding and federal match funding to increase the compensation rate at SCP hospitals for claims associated with patients enrolled in Medicaid before the expansion.

HSD plans to use the rest of the tax to fund the Uncompensated Care Pool, which will reimburse claims from uninsured, low-income patients. The pool would replace Indigent at community hospitals.

Jeff Dye, chief executive officer of health care advocacy organization New Mexico Hospital Association, said it is possible that the UC Pool will not cover uncompensated claims to as great an extent as Indigent has.

“We are very concerned that the total program [SCP/Safety Net] is shrinking,” he said.

Still, like Earnest, he said that county contributions are needed to support hospitals.

“I think it behooves all of us to continue to maximize that federal match to meet the local needs,” Dye said.

HSD’s second proposal would require counties to submit one-half of the tax to cover Medicaid reimbursement, while making contribution of the second half voluntary.

Counties that submitted the second half would receive funding through the UC Pool. Those that didn’t would be able to continue contributing the funding to Indigent services, but the funding would no longer be matched by the federal government.

The change in funding mechanisms have yet to be settled. HSD is working with counties to agree upon a funding method.

A final proposal will hit the state Legislature floor in January.

Dye cautioned not to conflate the restructuring of SCP and proposals to change the funding mechanism with changes to the state health care system imposed by the ACA.

“The program has been redesigned to be in strict compliance with CMS regulation,” he said.

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