Counties fret over Medicaid reform
They are storied names – Parkland in Dallas, Metro in Cleveland, Grady in Atlanta – the nation’s large, public county hospitals. They have cared for President Kennedy and the 1996 Olympic Park bombing victims. But providing health care to the poorest of the poor is their real mission.
That mission could be threatened by calls to reform the Medicaid program.
Reform bills passed by the relevant House and Senate committees will cut about $13.6 billion in payments to states between 1998 and 2002. The vast majority of that comes out of payments to states for “disproportionate share hospitals (DSHs)” – those that serve a high percentage of indigent patients. Each state determines which hospitals get the DSH funds and has its own formula for disbursing the money.
Current federal Medicaid DSH payments are $9.8 billion, distributed to states based on a formula that considers the number of low-income residents per capita. Consequently, Southern states get more money than states like New York and California. Gary Wells, director of finance for the Department of Health Services in L.A. County, says his county receives .51 in DSH payments from Medicaid for every .49 the state puts out. In some Southern states, the match is .30 from the state to .70 from Washington. In the fiscal year that ended on June 30, L.A. County received $121.6 million in federal DSH payments, money that was distributed to six public county hospitals. Other county hospitals also rely heavily on these DSH sums. Cleveland’s Metro, for instance, receives about $60 million a year, according to Cuyahoga County Commissioner Jane Campbell. Across town, St. Luke’s, on the city’s economically strapped east side, gets another $7 million.
The National Association of Counties’ urban caucus, which represents the country’s 75 largest counties, is lobbying hard for a NACo-backed Medicaid amendment that urges targeting of DSH funds to “safety net” county hospitals, which treat most of the urban poor. Under that amendment, private hospitals in tonier parts of town would lose their funds,which are considerably less anyway, and, thus, would have a less devastating effect.
But the American Hospital Association, which represents those private hospitals, opposes the targeting amendment, according to Molly Collins, the group’s senior associate director for policy, as does the National Governors Association.
Consequently, the amendment was rejected in the House Commerce Committee and was never offered in the Senate version.
“We are not pleased,” says NACo Deputy Legislative Director Tom Joseph, who acknowledges that such an amendment will be virtually impossible to get as part of the reconciliation bill.
The bill that is finally offered will probably give power to decide how to apportion the DSH cuts to the governors, a discouraging prospect in the states whose legislatures have traditionally been hostile to urban issues.
Still, some county officials are now negotiating with their governors to ensure that DSH payments remain stable.
The 254 Texas counties have a verbal agreement with a state official who represents Gov. George Bush, according to Dallas County Commissioner Kenneth Mayfield, but it is not yet in writing.
L.A. County’s Wells, however, is not optimistic that California Gov. Pete Wilson will protect the six county hospitals absent any instructions from Congress to do so. He notes that NGA was adamantly opposed to any targeting amendments and that few governors seem prepared to buck the organization on the issue.