DOJ charges execs, others with elaborate $1.4B billing scheme using rural hospitals

https://www.healthcaredive.com/news/doj-charges-execs-others-with-elaborate-14b-billing-scheme-using-rural-h/580785/

Office of Attorney Recruitment & Management | Department of Justice

Dive Brief:

  • The U.S. Department of Justice is charging 10 defendants for an “elaborate” pass-through billing scheme that used small rural hospitals across three states as shells to submit fraudulent claims for laboratory testing to commercial insurers, jacking up reimbursement.
  • The defendants, including hospital executives, lab owners and recruiters, billed private payers roughly $1.4 billion from November 2015 to February 2018 for pricey lab testing, reaping $400 million.
  • The four rural hospitals used in the scheme are: Cambellton-Graceville Hospital, a 25-bed rural facility in Florida; Regional General Hospital of Williston, a 40-bed hospital in Florida; Chestatee Regional Hospital, a 49-bed facility in Georgia; and Putnam County Memorial Hospital, a 25-bed hospital in Missouri. Only Putnam emerged from the scheme relatively unscathed: Chestatee was sold to a health system that plans to replace it with a newer facility, Cambellton-Graceville closed in 2017 and RGH of Williston was sold for $100 to an accounting firm earlier this month.

Dive Insight:

The indictment, filed in the Middle District of Florida and unsealed Monday, alleges the 10 defendants, using management companies they owned, would take over rural hospitals often struggling financially. They would then bill commercial payers for millions of dollars for pricey urine analysis drug tests and blood tests through the rural hospitals, though the tests were normally conducted at outside labs, and launder the money to hide their trail and distribute proceeds.

The rural hospitals had negotiated rates with commercial insurers for higher reimbursement for tests than if they’d been run at an outside labs, so the facilities were used as a shell for fraudulent billing for often medically unnecessary tests, the indictment alleges.

The defendants, aged 34 to 60, would get urine and other samples by paying kickbacks to recruiters and healthcare providers, like sober homes and substance abuse treatment centers.

Screening urine tests, to determine the presence or absence of a substance in a patient’s system, is generally inexpensive and simple — it can be done at a substance abuse facility, a doctor’s office or a lab. But confirmatory tests, to identify concentration of a drug, are more precise and sensitive and have to be done at a sophisticated lab.

As such they’re more expensive and are typically reimbursed at higher rates than screening urine tests. None of the rural hospitals had the capacity to conduct confirmatory tests, or blood tests, on a large scale, but frequently billed in-network insurers, including CVS Health-owned Aetna, Florida Blue and Blue Cross Blue Shield of Georgia, for the service from 2015 to 2018, the indictment says.

Rural hospitals are facing unprecedented financial stress amid the pandemic, but have been fighting to keep their doors open for years against shrinking reimbursement and lowering patient volume. That can give bad actors an opportunity to come in and assume control.

One of the defendants, Jorge Perez, 60, owns a Miami-based hospital operator called Empower, which has seen many of its facilities fail after insurers refused to pay for suspect billing. Half of rural hospital bankruptcies last year were affiliated with Empower, which controlled 18 hospitals across eight states at the height of the operation. Over the past two years, 12 of the hospitals have declared bankruptcy. Eight have closed, leaving their rural communities without healthcare and a source of jobs.

“Schemes that exploit rural hospitals are particularly egregious as they can undermine access to care in underserved communities,” Thomas South, a deputy assistant inspector general in the Office of Personnel Management Office of Inspector General, said in a statement.

 

 

 

 

 

State-by-state breakdown of 130 rural hospital closures

https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-130-rural-hospital-closures.html

Rural Hospital Closures Hit Poor, Minority Communities Hardest ...

Nearly one in five Americans live in rural areas and depend on their local hospital for care. Over the past 10 years, 130 of those hospitals have closed.

Thirty-three states have seen at least one rural hospital shut down since 2010, and the closures are heavily clustered in states that have not expanded Medicaid under the ACA, according to the Cecil G. Sheps Center for Health Services Research.

Twenty-one rural hospitals in Texas have closed since 2010, the most of any state. Tennessee has the second-most closures, with 13 rural hospitals shutting down in the past decade. In third place is Oklahoma with eight closures. 

Listed below are the 130 rural hospitals that have closed since Jan. 1, 2010, as tracked by the Sheps Center. For the purposes of its analysis, the Sheps Center defined a hospital closure as the cessation in the provision of inpatient services.

“We follow the convention of the Office of Inspector General that a closed hospital is ‘a facility that stopped providing general, short-term, acute inpatient care,'” reads a statement on the Sheps Center’s website. “We did not consider a hospital closed if it: merged with, or was sold to, another hospital but the physical plant continued to provide inpatient acute care, converted to critical access status, or both closed and reopened during the same calendar year and at the same physical location.”

As of June 8, all the facilities listed below had stopped providing inpatient care. However, some of them still offered other services, including outpatient care, emergency care, urgent care or primary care.

Alabama
SouthWest Alabama Medical Center (Thomasville)
Randolph Medical Center (Roanoke)
Chilton Medical Center (Clanton)
Florence Memorial Hospital
Elba General Hospital
Georgiana Medical Center

Alaska
Sitka Community Hospital

Arizona
Cochise Regional Hospital (Douglas)
Hualapai Mountain Medical Center (Kingman)
Florence Community Healthcare

Arkansas
De Queen Medical Center

California
Kingsburg Medical Center
Corcoran District Hospital
Adventist Health Feather River (Paradise)
Coalinga Regional Medical Center

Florida
Campbellton-Graceville Hospital
Regional General Hospital (Williston)
Shands Live Oak Regional Medical Center
Shands Starke Regional Medical Center

Georgia
Hart County Hospital (Harwell)
Charlton Memorial Hospital (Folkston)
Calhoun Memorial Hospital (Arlington)
Stewart-Webster Hospital (Richland)
Lower Oconee Community Hospital (Glenwood)
North Georgia Medical Center (Ellijay)

Illinois
St. Mary’s Hospital (Streator)

Indiana
Fayette Regional Health System

Kansas
Central Kansas Medical Center (Great Bend)
Mercy Hospital Independence
Mercy Hospital Fort Scott
Horton Community Hospital
Oswego Community Hospital
Sumner Community Hospital (Wellington)

Kentucky
Nicholas County Hospital (Carlisle)
Parkway Regional Hospital (Fulton)
New Horizons Medical Center (Owenton)
Westlake Regional Hospital (Columbia)

Louisiana
Doctor’s Hospital at Deer Creek (Leesville)

Maine
St. Andrews Hospital (Boothbay Harbor)
Southern Maine Health Care-Sanford Medical Center
Parkview Adventist Medical Center (Brunswick)

Maryland
Edward W. McCready Memorial Hospital (Crisfield)

Massachusetts
North Adams Regional Hospital

Michigan
Cheboygan Memorial Hospital

Minnesota
Lakeside Medical Center
Albany Area Hospital
Albert Lea-Mayo Clinic Health System
Mayo Clinic Health System-Springfield

Mississippi
Patient’s Choice Medical of Humphreys County (Belzoni)
Pioneer Community Hospital of Newton
Merit Health Natchez-Community Campus
Kilmichael Hospital
Quitman County Hospital (Marks)

Missouri
Sac-Osage Hospital (Osceola)
Parkland Health Center-Weber Road (Farmington)
Southeast Health Center of Reynolds County (Ellington)
Southeast Health Center of Ripley County (Doniphan)
Twin Rivers Regional Medical Center (Kennett)
I-70 Community Hospital (Sweet Springs)
Pinnacle Regional Hospital (Boonville)

Nebraska
Tilden Community Hospital

Nevada
Nye Regional Medical Center (Tonopah)

New York
Lake Shore Health Care Center
Moses-Ludington Hospital (Ticonderoga)

North Carolina
Blowing Rock Hospital
Vidant Pungo Hospital (Belhaven)
Novant Health Franklin Medical Center (Louisburg)
Yadkin Valley Community Hospital (Yadkinville)
Our Community Hospital (Scotland Neck)
Sandhills Regional Medical Center (Hamlet)
Davie Medical Center-Mocksville

Ohio
Physicians Choice Hospital-Fremont
Doctors Hospital of Nelsonville

Oklahoma
Muskogee Community Hospital
Epic Medical Center (Eufaula)
Memorial Hospital & Physician Group (Frederick)
Latimer County General Hospital (Wilburton)
Pauls Valley General Hospital
Sayre Community Hospital
Haskell County Community Hospital (Stigler)
Mercy Hospital El Reno

Pennsylvania
Saint Catherine Medical Center Fountain Springs (Ashland)
Mid-Valley Hospital (Peckville)
Ellwood City Medical Center
UPMC Susquehanna Sunbury

South Carolina
Bamberg County Memorial Hospital
Marlboro Park Hospital (Bennettsville)
Southern Palmetto Hospital (Barnwell)
Fairfield Memorial Hospital (Winnsboro)

South Dakota
Holy Infant Hospital (Hoven)

Tennessee
Riverview Regional Medical Center South (Carthage)
Starr Regional Medical Center-Etowah
Haywood Park Community Hospital (Brownsville)
Gibson General Hospital (Trenton)
Humboldt General Hospital
United Regional Medical Center (Manchester)
Parkridge West Hospital (Jasper)
Tennova Healthcare-McNairy Regional (Selmer)
Copper Basin Medical Center (Copperhill)
McKenzie Regional Hospital
Jamestown Regional Medical Center
Takoma Regional Hospital (Greeneville)
Decatur County General Hospital (Parsons)

Texas
Wise Regional Health System-Bridgeport
Shelby Regional Medical Center
Renaissance Hospital Terrell
East Texas Medical Center-Mount Vernon
East Texas Medical Center-Clarksville
East Texas Medical Center-Gilmer
Good Shepherd Medical Center (Linden)
Lake Whitney Medical Center (Whitney)
Hunt Regional Community Hospital of Commerce
Gulf Coast Medical Center (Wharton)
Nix Community General Hospital (Dilley)
Weimar Medical Center
Care Regional Medical Center (Aransas Pass)
East Texas Medical Center-Trinity
Little River Healthcare Cameron Hospital
Little River Healthcare Rockdale Hospital
Stamford Memorial Hospital
Texas General-Van Zandt Regional Medical Center (Grand Saline)
Hamlin Memorial Hospital
Chillicothe Hospital
Central Hospital of Bowie

Virginia
Lee Regional Medical Center (Pennington Gap)
Pioneer Community Hospital of Patrick County (Stuart)
Mountain View Regional Hospital (Norton)

West Virginia
Williamson Memorial Hospital
Fairmont Regional Medical Center

Wisconsin
Franciscan Skemp Medical Center (Arcadia)

 

 

 

 

After criticism, HHS directs $25B in CARES funding to Medicaid providers, safety net hospitals

https://www.healthcaredive.com/news/after-criticism-hhs-directs-25b-in-cares-funding-to-medicaid-providers-s/579496/

Dive Brief:

  • HHS announced Tuesday it will deliver $25 billion to providers and hospitals that serve the nation’s most vulnerable patients, or those with Medicaid and Children’s Health Insurance Program coverage. Of that, $15 billion will go to providers that primarily serve Medicaid and CHIP patients while the other $10 billion is reserved for safety net hospitals that usually operate on razor-thin margins. A total of 758 safety net hospitals will receive direct deposits, and the administration noted that many of these facilities are operating in the red with an average profit margin of -7%.
  • Not all Medicaid providers received Coronavirus Aid, Relief, and Economic Security funding from the initial general distribution. This targeted allocation is designed to make up for that by distributing money to the remaining 38% of Medicaid and CHIP providers who were left out of the first tranche.
  • These Medicaid providers will receive at least 2% of reported gross patient revenue, but could receive more depending on how many patients they serve. HHS will make a final determination once providers start submitting data to the relief portal.

Dive Insight:

The industry has been clamoring for HHS to target funding to Medicaid providers amid the COVID-19 pandemic and the downturn in business, noting these organizations are already on fragile ground.

Last week the American Hospital Association pleaded for the administration to release $50 billion more for all hospitals, with $10 billion reserved for providers with a heavy caseload of Medicaid patients.

HHS answered the hospital lobby’s call — in part. HHS will distribute funds to safety net providers — more than AHA asked for — but disclosed no plans Tuesday to broaden that funding to all hospitals. America’s Essential Hospitals, which represents safety net providers, had also called for the quick release of targeted funding.

“Our goal for all these distributions has been to get the money to the providers who need it most as soon as possible,” Eric Hargan, HHS deputy secretary, said Tuesday during a call with reporters.

However, some have been critical of how the administration decided to allocate the first few waves of funding.

Congress has earmarked a total of $175 billion in funding for providers through two pieces of legislation, including the CARES Act.

To get the money out the door quickly, the first tranche was sent to providers based on the Medicare fee-for-service business, and later on the net patient service revenue.

These formulas put certain providers at an advantage, which tend to be for-profit hospitals with higher-margins, or those who were already well off heading into the pandemic, according to a recent Kaiser Family Foundation analysis.

This targeted funding was not swift, one reason for the delay was the challenge in getting a list of Medicaid providers from the states to validate and authenticate those who came to the portal to apply for funds, according to a senior HHS official.​

Still, providers that have already received funds have noted that it comes with its own set of headaches. Some have decided to return the funds as navigating the legal and compliance issues may not be worth the hassle.

Though, that’s likely not the case for these safety net hospitals and providers.

 

 

 

 

These Hospitals Pinned Their Hopes on Private Management Companies. Now They’re Deeper in Debt.

https://www.propublica.org/article/these-hospitals-pinned-their-hopes-on-private-management-companies-now-theyre-deeper-in-debt?utm_source=ActiveCampaign&utm_medium=email&utm_content=Does+the+US+Spend+Too+Much+on+Police%3F&utm_campaign=TFT+Newsletter+06042020

At least 13 hospitals in Oklahoma have closed or experienced added financial distress under the management of private companies. Some companies charged hefty management fees, promising to infuse millions of dollars that never materialized.

Revenues soared at some rural hospitals after management companies introduced laboratory services programs, but those gains quickly vanished when insurers accused them of gaming reimbursement rates and halted payments. Some companies charged hefty management fees, promising to infuse millions of dollars but never investing. In other cases, companies simply didn’t have the hospital management experience they trumpeted.

Click on link above for examples of rural hospitals that pinned their hopes on private management companies that left them deeper in debt. They are based on interviews, public records and financial information from the Centers for Medicare and Medicaid Services and the American Hospital Directory.

Medicaid expansion key indicator for rural hospitals’ financial viability

https://www.healthcaredive.com/news/medicaid-expansion-rural-hospitals-health-affairs/579005/

Hospital Closures, Underfunded Health Centers In Ohio Valley ...

Dive Brief:

  • Struggling rural hospitals are faring better financially in states that expanded Medicaid under the Affordable Care Act, according to a new Health Affairs study examining 1,004 rural hospitals’ CMS cost reports submitted from 2011 to 2017.
  • Among rural, nonprofit critical access hospitals in states that expanded Medicaid, the median overall margin increased from 1.8% to 3.7%, while it dropped from 3.5% to 2.8% in states that did not expand the program.
  • Tax-exempt status played another key role in determining rural hospitals’ financial viability. During the study period, the median overall profit margin at nonprofit critical access hospitals rose from 2.5% to 3.2%, while it dropped among for-profit operators from 3.2% to 0.4%.

Dive Insight:

The unprecedented financial distress mega health systems are under amid the ongoing pandemic is all too familiar to rural hospitals.

These systems are often smaller, employing fewer specialists and less medical technology, thus limiting the variety of services they can provide and profit on. They remain the closest point of care for millions of Americans, yet face rising closures.

The good news is that most rural hospitals are nonprofit, the designation that fared best in Health Affairs’ six-year study. More than 80% of the 1,004 private, rural hospitals analyzed in the study were nonprofit, while 17% were for-profit.

But researchers found Medicaid expansion played a key role in rural hospitals’ financial viability during the study period, with closures occurring more often in the South than in other regions.

Thirty-seven states have expanded Medicaid under the ACA, but 14 have not, and a majority of them are concentrated in the southern U.S., according to data from the Kaiser Family Foundation.

One of those states is Oklahoma, which on Monday withdrew its planned July 1 Medicaid expansion, citing a lack of funding.

Another factor researchers found positively associated with overall margins and financial viability was charge markups, or the charged amount for a service relative to the Medicare allowable cost. Hospitals with low-charge markups had median overall margins of 1.8%, while those with high-charge markups had margins at 3.5%.

The same is true for occupancy rates. In 2017, rural hospitals with low occupancy rates had median overall profit margins of 0.1% Those with high occupancy rates had margins of 4.7%.

That presents a unique challenge for rural hospitals. Reimbursements from public and private payers do not compensate for fixed costs associated with providing standby capacity, which is essential in rural communities, where few hospitals serve large geographic areas.

Since 1997, CMS has been granting rural hospitals — particularly those with 25 or fewer acute care inpatient beds and located more than 35 miles from another hospital — critical access status, reimbursing them at cost for treating Medicare patients.

In the Health Affairs study, critical access hospitals accounted for 21% of the rural hospital bed capacity, with the remaining 79% of bed capacity provided by noncritical access hospitals.

 

 

 

 

Bankrupt hospitals sue feds

https://www.axios.com/newsletters/axios-vitals-e6483366-26b3-4f34-99c1-f2b356e47b4a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Stifel CEO: Hospitals Will Go Bankrupt in Overlooked Threat

Small hospitals going through bankruptcy are suing the Small Business Administration, arguing it is unlawful for the federal government to deny them loans under the Paycheck Protection Program, Axios’ Bob Herman reports.

Why it matters: Allowing bankrupt hospitals access to PPP loans could keep their doors open, and could force the federal government to reverse its stance and allow other bankrupt firms to get PPP loans.

Driving the news: Faith Community Health System, a small rural hospital in Texas that filed for bankruptcy in February, sued the SBA Thursday.

  • The hospital wants to apply for a $2.4 million PPP loan to pay staff and remain open while it goes through bankruptcy and handles the coronavirus pandemic.
  • However, the SBA says bankrupt companies will not be approved for the bailout money because of their “high risk.”
  • Faith Community argues the government agency doesn’t have the authority to exclude bankrupt firms from PPP funding because the law doesn’t spell out those eligibility requirements.

The big picture: Courts are starting to take hospitals’ side.

  • A bankruptcy judge in Maine said the funding was a “grant of aid necessitated by a public health crisis,” and that two hospitals that sued the federal government are entitled to PPP loans.
  • A separate bankrupt hospital in Vermont also should be eligible for PPP funds, a judge ruled this week.

The bottom line: Rural hospitals have been in dire straits for years, and for those that are on the precipice of or are going through bankruptcy, they may be eligible for this bailout funding despite SBA exclusions.

 

 

 

 

Trump will urge Supreme Court to strike down Obamacare

https://www.politico.com/news/2020/05/06/trump-supreme-court-obamacare-240366?utm_source=The+Fiscal+Times&utm_campaign=f343554e9c-EMAIL_CAMPAIGN_2020_05_06_09_42&utm_medium=email&utm_term=0_714147a9cf-f343554e9c-390702969

Trump will urge Supreme Court to strike down Obamacare - YouTube

Attorney General Bill Barr had urged the White House to soften its attack on the law during the pandemic.

President Donald Trump on Wednesday said his administration will urge the Supreme Court to overturn Obamacare, maintaining its all-out legal assault on the health care law amid a pandemic that will drive millions of more Americans to depend on its coverage.

The administration appears to be doubling down on its legal strategy, even after Attorney General William Barr this week warned top Trump officials about the political ramifications of undermining the health care safety net during the coronavirus emergency.

Democrats two years ago took back the House of Representatives and statehouses across the country by promising to defend Obamacare, in particular its insurance protections that prevent sick people from being denied coverage or charged more because of a health condition. The issue may prove to be even more salient in November amid the Covid-19 outbreak that health experts believe will persist through the fall.

The Justice Department had a Wednesday deadline to change its position in a case brought by Republican-led states, but Trump told reporters Wednesday afternoon his administration would stand firm. DOJ declined to comment.

“Obamacare is a disaster, but we’ve made it barely acceptable,” Trump said.

The Supreme Court later this fall will hear a lawsuit from the GOP-led states that argue the Affordable Care Act was rendered invalid after Congress eliminated its tax penalty for not having health insurance. A coalition of Democratic state attorneys general and the Democratic-led House of Representatives are defending the law in court.

The Trump administration had previously shifted its legal position in this case, but appears to have decided against doing so again. DOJ originally argued the courts should throw out just Obamacare’s preexisting condition protections, before last year urging that the entire law be struck down.

The Supreme Court is expected to hear the case during its next term starting in October, but it hasn’t scheduled arguments yet. A decision is unlikely before the Nov. 3 election. The court has previously upheld Obamacare in two major challenges that threatened the law’s survival.

About 20 million people have been covered by Obamacare, and the law is expected to provide a major safety net during the economic freefall brought on by the coronavirus. Millions more are expected to join the Medicaid rolls, especially in states that joined Obamacare’s expansion to poor adults. Others who lost workplace health insurance can sign up on the law’s health insurance marketplaces, though the Trump administration isn’t doing much to advertise coverage options.

House Democrats in a filing to the Supreme Court on Wednesday said the pandemic showcased why justices should preserve the law.

“Although Congress may not have enacted the ACA with the specific purpose of combatting a pandemic, the nation’s current public-health emergency has made it impossible to deny that broad access to affordable health care is not just a life-or death matter for millions of Americans, but an indispensable precondition to the social intercourse on which our security, welfare, and liberty ultimately depend,” their brief read.

Obamacare has grown more popular since the GOP’s failed repeal bid during Trump’s first year in office, though the law is still broadly disliked by Republicans. Many Democrats are eager to again run on their defense of Obamacare this fall. That includes presumptive presidential nominee Joe Biden, who has advocated for building on the health care law rather than pursuing a comprehensive progressive overhaul like “Medicare for All.”

Top Trump officials have long been split on the legal strategy in the Obamacare lawsuit. Barr and Alex Azar, the Health and Human Services secretary, both opposed a broader attack on the law, but White House officials have been more supportive, seeing it as a chance to fulfill Trump’s pledge to repeal Obamacare. Barr, in a Monday meeting with Vice President Mike Pence and other White House officials, made an eleventh-hour plea for the administration to soften its legal stance ahead of the Supreme Court’s briefing deadline.

 

 

 

States cut Medicaid as millions of jobless workers look to safety net

https://www.politico.com/amp/news/2020/05/05/states-cut-medicaid-programs-239208?utm_source=The+Fiscal+Times&utm_campaign=f343554e9c-EMAIL_CAMPAIGN_2020_05_06_09_42&utm_medium=email&utm_term=0_714147a9cf-f343554e9c-390702969

Medicaid Cuts Could Hurt Seniors Most | Muskegon Tribune

Three states have cut back state spending on the program since the pandemic hit, and more are warning of painful cuts to benefits and services.

States facing sudden drops in tax revenue amid the pandemic are announcing deep cuts to their Medicaid programs just as millions of newly jobless Americans are surging onto the rolls.

And state officials are worried that they’ll have to slash benefits for patients and payments to health providers in the safety net insurance program for the poor unless they get more federal aid.

State Medicaid programs in the previous economic crisis cut everything from dental services to podiatry care — and reduced payments to hospitals and doctors in order to balance out spending on other needs like roads, schools and prisons. Medicaid officials warn the gutting could be far worse this time, because program enrollment has swelled in recent years largely because of Obamacare’s expansion.

The looming crisis facing Medicaid programs “is going to be the ’09 recession on steroids,” said Matt Salo, head of the National Association of Medicaid Directors. “It’s going to hit hard, and it’s going to hit fast.”

Medicaid programs, among the largest budget items in most states, provide health insurance to roughly 70 million poor adults, children, the disabled and pregnant women. The federal government on average pays roughly 60 percent of program costs, with poorer states receiving a higher share. States have the latitude to adjust benefits, payments to health care providers and eligibility requirements with oversight by the federal government.

Now, governors are turning to Congress for help as it weighs a new package to rescue state budgets battered by the pandemic. They’re asking lawmakers to provide a bigger boost to Medicaid payments and provide hundreds of billions of dollars in aid to shore up state budgets.

Medicaid naturally faces heightened demand as economic conditions worsen. But that leaves states facing more need at the same time that they have less money.

“The cruel nature of the economic downturn is that at a time when you need a social safety net is also the time when government revenues shrink,” Ohio Gov. Mike DeWine, a Republican, said Tuesday as he announced $210 million in cuts to his state’s Medicaid program in the next two months.

The vast majority of a $229 million spending cut made by Colorado Democratic Gov. Jared Polis last week came from Medicaid, though new federal funds will forestall an immediate reduction in benefits or payments to health providers. State legislative committee staff have warned Medicaid enrollment there could spike by 500,000 by the end of the year.

In Georgia, where Medicaid enrollment is projected to rise by as much as 567,000, Republican Gov. Brian Kemp and legislative leaders have instructed every state agency to prepare for 14 percent reductions across the board.

House Democrats are pushing to deliver a $1 trillion-plus package in aid to state and local governments and to support safety net programs, which could alleviate pressure on states to make deep cuts to health care during a pandemic. Some Republican lawmakers have questioned the need for more aid, after Congress has shoveled out trillions of dollars in rescue funding.

Congress already gave states a temporary 6 percent increase in the federal portion of Medicaid spending in an earlier coronavirus package. That prompted Alaska Gov. Mike Dunleavy, a Republican, to cut state Medicaid spending $31 million last month, saying the temporary federal boost would make up the difference.

State officials largely agreed the increase was helpful but said it likely will be washed out by an expected enrollment surge. The nation’s governors say Congress — in addition to providing at least $500 billion in direct support to states — must double the Medicaid funding boost to 12 percent as it did in the previous recession. At least one Republican senator facing a tough reelection fight, Cory Gardner of Colorado, said his state sorely needs extra Medicaid funding to avoid “harmful budget cuts.”

Anywhere from 11 million to 23 million more people could sign up for Medicaid over the next several months. The demand will be even greater in roughly three-quarters of states that expanded Medicaid enrollment to poor adults under the Affordable Care Act.

The portion of state budgets devoted to Medicaid spending has grown quickly since the previous recession, making it a riper target for cuts. Medicaid spending on average accounted for 15.7 percent of state budgets in fiscal 2009, a number that jumped to 19.7 percent in fiscal 2019.

Medicaid enrollment data in some states often lags, making it difficult to determine how much national sign-ups have climbed since jobless claims began surging two months ago. Some states have begun to report notable surges, however, and larger increases are expected in the coming months.

Arizona in the past two months saw 78,000 people enroll in Medicaid and the Children’s Health Insurance Program, which receives more generous funding from the federal government. Virginia has seen a 20 percent increase in enrollment applications since mid-March.

In New Mexico, where 42 percent of the population was already enrolled in Medicaid, sign-ups in the first two weeks of April surged by about 10,000 more people than were expected before the pandemic.

New Mexico’s top Medicaid official said the budget is a significant concern for a state heavily reliant on oil and natural gas. She worries a prolonged economic downturn could force the state to roll back pay increases to Medicaid providers enacted last year, and another planned pay raise for next year is almost certainly off the table.

States that accepted the temporary Medicaid payment increase from Congress are barred from cutting back enrollment while they’re receiving the enhanced funds. That leaves states with the option of cutting benefits or provider payments to find Medicaid savings, which could ignite fierce brawls in state capitals.

Michigan state Rep. Mary Whiteford, the Republican chairwoman of a health care appropriations panel, said the state’s Medicaid enrollment could increase from 2.4 million to 2.8 million by the end of the year.

“We are just planning for major cuts moving forward,” Whiteford said.

Before the pandemic, states had socked away $72 billion in rainy day funds — an all-time high, said Brian Sigritz of the National Association of State Budget Officers. But that figure was easily dwarfed by the $150 billion Congress provided to state and local governments in an earlier package, and it’s far short of what states are demanding.

“Now, we’re looking at greater declines than what we saw during the Great Recession and increased spending,” Sigritz said. “If there aren’t more federal funds, states will have to look at cutting funding for key services: public safety, education, health care. That’s where the money is.”

 

 

COVID-19 cases are rising in rural America, and its hospitals may be unprepared

https://www.healthcaredive.com/news/covid-19-cases-are-rising-in-rural-america-and-its-hospitals-may-be-unprep/577161/

CMS announces Rural Health Strategy | SDAHO

Dive Brief:

  • Though metro and rural areas have had different infection rates since the outbreak began, the mortality rate from the virus is mostly the same in the U.S. But in recent weeks, the infection rate in rural counties has been outpacing urban counties, according to a new analysis of COVID-19 data by the Kaiser Family Foundation.
  • According to KFF, counties with large metro areas have had nearly three times as many coronavirus cases and deaths as rural counties (327.5 cases per 100,000 versus 114.9 per 100,000, even adjusting for population size). Metro counties have also experienced nearly four times as many deaths as of last Monday (17 per 100,000 versus 4.4 per 100,000).
  • Nevertheless, the COVID-19 mortality rate is 4.2% for metro populations, versus 3.8% for rural populations. And the county with the most deaths per capita is in a non-metro area. 

Dive Insight:

The divide between rural and urban America was highlighted during the first several weeks of the COVID-19 pandemic in the U.S., as major metropolitan areas were hit much harder than their rural counterparts, suggesting lower population density could spare rural America the brunt of the outbreak.

However, this week’s KFF analysis suggests COVID-19 is now spreading in rural America, whose older population and smaller, often sparsely equipped hospitals may be ill-prepared to bear up against the coronavirus. That rural hospitals have been in dire financial straits for years suggests that they may not be able to marshal the resources to properly respond if they become inundated with coronavirus patients.

A recent letter from the Medicaid and CHIP Payment and Access Commission to Health and Human Services Secretary Alex Azar also suggests that hospitals with a high proportion of Medicaid and low-income patients are not getting enough emergency federal funding in response to COVID-19, a trend that could also hurt some rural hospitals.

According to the KFF analysis, there was a 45% uptick in COVID-19 cases in non-metro counties over the past week, versus 26% in metro counties. Over two weeks, cases increased 125% in non-metro counties versus 68% among their urban counterparts. And deaths are up 169% over the past two weeks in non-metro counties, versus a 113% increase in metro counties.

Meanwhile, the easing of lockdowns in states with large rural areas foretells more problems in the near-term. “Georgia has started to reopen certain businesses and allow limited dine-in at restaurants, despite some of its counties rising toward the top of this list of U.S. metro and non-metro counties with the highest numbers of COVID-19 deaths per capita,” the KFF analysis observed.

The county with the most deaths per capita in the U.S. is Randolph County, with 278 deaths per 100,000 people. Randolph is a rural county in Georgia.

 

 

 

State-by-state breakdown of 354 rural hospitals at high risk of closing

https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html?utm_medium=email

What Rural Hospital Closures Mean for EMS Professionals

Twenty-five percent of the 1,430 rural hospitals in the U.S. are at high risk of closing unless their finances improve, according to an annual analysis from Guidehouse, a consulting firm. 

The 354 rural hospitals at high risk of closing are spread across 40 states and represent more than 222,000 annual discharges. According to the analysis, 287 of these hospitals — 81 percent — are considered highly essential to the health and economic wellbeing of their communities.

Several factors are putting rural hospitals at risk of closing, according to the analysis, which looked at operating margin, days cash on hand, debt-to-capitalization ratio, current ratio and inpatient census to determine the financial viability of rural hospitals. Declining inpatient volume, clinician shortages, payer mix degradation and revenue cycle management challenges are among the factors driving the rural hospital crisis.

The Guidehouse study analyzed the financial viability of rural hospitals prior to the COVID-19 pandemic, and the authors noted that the rural hospital crisis could significantly worsen due to the pandemic or any downturn in the economy. 

Here are the number and percentage of rural hospitals at high risk of closing in each state based on the analysis:

Tennessee
Rural hospitals at high risk of closing: 19 (68 percent)

Alabama
Rural hospitals at high risk of closing: 18 (60 percent)

Oklahoma
Rural hospitals at high risk of closing: 28 (60 percent)

Arkansas
Rural hospitals at high risk of closing: 18 (53 percent)

Mississippi
Rural hospitals at high risk of closing: 25 (50 percent)

West Virginia
Rural hospitals at high risk of closing: 9 (50 percent)

South Carolina
Rural hospitals at high risk of closing: 4 (44 percent)

Georgia
Rural hospitals at high risk of closing: 14 (41 percent)

Kentucky
Rural hospitals at high risk of closing: 18 (40 percent)

Louisiana
Rural hospitals at high risk of closing: 11 (37 percent)

Maine
Rural hospitals at high risk of closing: 7 (33 percent)

Indiana
Rural hospitals at high risk of closing: 8 (31 percent)

Kansas
Rural hospitals at high risk of closing: 26 (31 percent)

New Mexico
Rural hospitals at high risk of closing: 3 (30 percent)

Michigan
Rural hospitals at high risk of closing: 13 (29 percent)

Missouri
Rural hospitals at high risk of closing: 10 (26 percent)

Virginia
Rural hospitals at high risk of closing: 5 (25 percent)

Oregon
Rural hospitals at high risk of closing: 4 (24 percent)

California
Rural hospitals at high risk of closing: 6 (23 percent)

North Carolina
Rural hospitals at high risk of closing: 6 (23 percent)

Florida
Rural hospitals at high risk of closing: 2 (22 percent)

North Dakota
Rural hospitals at high risk of closing: 7 (21 percent)

Ohio
Rural hospitals at high risk of closing: 6 (20 percent)

Vermont
Rural hospitals at high risk of closing: 2 (20 percent)

Idaho
Rural hospitals at high risk of closing: 4 (19 percent)

Pennsylvania
Rural hospitals at high risk of closing: 4 (19 percent)

Washington
Rural hospitals at high risk of closing: 5 (18 percent)

Wyoming
Rural hospitals at high risk of closing: 3 (18 percent)

Texas
Rural hospitals at high risk of closing: 14 (16 percent)

Colorado
Rural hospitals at high risk of closing: 4 (14 percent)

Illinois
Rural hospitals at high risk of closing: 7 (14 percent)

Montana
Rural hospitals at high risk of closing: 7 (14 percent)

Nebraska
Rural hospitals at high risk of closing: 8 (13 percent)

New York
Rural hospitals at high risk of closing: 4 (13 percent)

Iowa
Rural hospitals at high risk of closing: 9 (12 percent)

Minnesota
Rural hospitals at high risk of closing: 8 (11 percent)

Alaska
Rural hospitals at high risk of closing: 1 (10 percent)

Arizona
Rural hospitals at high risk of closing: 1 (10 percent)

New Hampshire
Rural hospitals at high risk of closing: 1 (9 percent)

Wisconsin
Rural hospitals at high risk of closing: 5 (9 percent)