Providers to see less uncompensated claims coverage

October 25, 2013 • Local News

The original version [auth] of this article incorrectly stated the amount of Indigent Health Care Services funding approved for Lovelace Health System and Eastern New Mexico Medical Center in Chaves County. Lovelace received $320,000 in approved funds in fiscal year 2013 and ENMMC received $4 million, not the reverse as was stated. 

Miercoles el 30 de Octubre, el periódico tendrá una versión de este articulo en español.

As part of the remodeling of the Sole Community Provider program into the Safety Net Care Pool in 2014, hospitals enrolled in the program will receive less coverage for uncompensated claims currently reimbursed by Indigent Health Care Services, and more compensation for uncompensated portions of Medicaid claims.

Indigent covers claims of uninsured patients who demonstrate that they cannot cover their health care costs. Most funding for SCP hospitals currently goes toward covering Indigent claims.

In Chaves County, Lovelace Health System and Eastern New Mexico Medical Center are enrolled in SCP.

The county also sets aside tax revenue to provide Indigent funding to some non-SCP health care providers. La Casa Family Health Center receives more Indigent funding than any other non-SCP health care provider in Chaves County.

Lovelace, ENMMC and La Casa received $320,000, $4 million, and $400,000 in approved funding from Indigent in fiscal year 2013. The funds do not cover 100 percent of uncompensated claims.

According to Jeff Dye, chief executive officer of health care advocacy organization New Mexico Hospital Association, uncompensated claims by uninsured patients should theoretically be fewer in the future due to the expansion of Medicaid and subsidization of health insurance plans based on income under federal health reform law the Affordable Care Act. The law goes into effect Jan. 1.

“We would all hope that with more people covered by Medicaid and more people covered by exchange insurance, that uncompensated care in total will go down over time. The challenge is in the timing of that,” Dye said. “We believe that is really an unknown and will be happening later rather than sooner.”

Increased compensation of Medicaid costs should also ease the financial burdens of the hospitals.

Statewide, the SCP program receives about $270 million in funding annually, according to Dye. He said Safety Net is slated to receive $200 million in funds, $69 million of which would go toward uncompensated claims. The rest would go toward increasing coverage rates of Medicaid claims.

Depending on the Human Services Department’s final proposal on a new funding scheme, the hospital Indigent program will be replaced by the Uncompensated Care Pool at some or all hospitals.

The UC Pool would cover the same types of claims, but would have less funding.

Under one proposal by HSD, the tax revenue most counties contribute to the SCP program would be put toward Safety Net in its entirety. The funds would still be matched by federal money.

Rather than the combined funding being sent to county hospitals in direct proportion to the amount of money counties contribute, the funds would be distributed to hospitals based on a state-determined formula.

One part of the funds would go toward increasing Medicaid reimbursement at the hospitals, and the other part would go toward the UC Pool. Thus, UC Pool funding would be less than the Indigent funding hospitals currently receive.

Chaves County usually receives $6 million in SCP funding after federal match.

A second proposal by HSD would allow counties to contribute half the tax to fund the higher Medicaid reimbursement, and keep the second half to continue funding Indigent. Counties that choose not to contribute the second half would not see the funding matched by the federal government and would not be eligible for UC Pool funding.

As a result of either proposal, some health care providers in Chaves County may lose Indigent funding completely, according to County Manager Stan Riggs. He said that the county may not have sufficient funds to cover Indigent claims filed by providers such as University Hospital and Superior Ambulance.

The county has an additional source of about $750,000 in tax revenue dedicated to Indigent that is not bound to SCP hospitals, according to Riggs. He said that this funding will probably allow the county to sufficiently cover Indigent claims at community health center La Casa.

La Casa receives the most Indigent funding of all non-SCP providers in the county. The Chaves County location of the organization received four percent of its total budget from Indigent in fiscal year 2013, according to La Casa CEO Seferino Montano.

Montano said that were La Casa to lose Indigent funding, “it would have a real serious effect on the overall funding and viability of our clinic.”

One group that will continue to need the funding is undocumented immigrants and lawfully residing immigrants who have not established permanent residency. These groups do not qualify for Medicaid or subsidized plans offered as part of the health care reform.

Montano said it is important these groups are still covered. If they are not covered and contract communicable diseases, “then it becomes a public health type of issue,” he said.

Claims from these groups can be covered by the UC Pool.

However, Riggs noted that it is cheaper to provide care at a community health center such as La Casa than in an emergency room.

Lovelace Vice President and Chief Financial Officer Stephen Forney is more hopeful about the possible impact of changes to the SCP program.

He hopes that the implementation of the UC Pool would streamline the process of applying for coverage of uncompensated claims.

“The current process for Indigent care, it’s a complicated process, and it requires that we submit information to the county who then processes it, and then to state who then processes it,” he said. “It all eventually works its way back to the hospitals.”

Lovelace reported $82.5 million in uncompensated claims at its locations across New Mexico in fiscal year 2012.

ENMMC said that it is monitoring the various changes to the health care environment in New Mexico. The hospital did not provide further comment.

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