LUMBERTON — The state’s decision to block Medicaid expansion under the federal government’s overhaul of health care will force hospitals such as Southeastern Regional Medical Center to find new ways to absorb the cost of providing services to the indigent and uninsured, according to Southeastern Health’s chief financial officer.
C. Thomas Johnson III, also the company’s vice president of finance, told The Robesonian that if other reimbursements are not found to help pay for services to those who cannot pay, services that are now being provided to the community — but losing money — might have to be eliminated.
“We will have to look at our full scope of behavioral health services,” he said. “A lot of medical facilities across the state are losing money on the behavioral (mental) health services they provide.”
The state House and Senate recently approved a bill that prohibits the expansion of Medicaid eligibility and leaves it to the federal government to operate the state’s online health insurance market. Under the Affordable Care Act, pushed by President Obama, a state can choose to expand Medicaid eligibility and oversee its own health insurance market.
Estimates are that 500,000 more North Carolinians would qualify for government health insurance under the expansion. The federal government has said that it would cover 100 percent of the states’ expansion costs through 2016, and at least 90 percent in following years.
“(Southeastern Health spends) $29 million annually to care for the indigent and uninsured,” Johnson said. “When payments to us such as through Medicaid are reduced, we have to offset these payments in other areas.”
The hospital had planned to use expanded Medicaid to recover $4 million of the $8 million to $9 million in Medicare reimbursements it is losing as a result of the Affordable Care Act. Johnson said expanded Medicaid would provide for the coverage of an additional 12,000 poor and uninsured Robeson County residents. Currently, Johnson said, there are approximately 30,000 Medicaid-eligible patients in the county.
Johnson said it is also uncertain how much the hospital will receive from health insurance exchanges to absorb some of the loss in Medicare payments. A health insurance exchange is defined as a set of government-regulated and standardized health care plans from which individuals purchase health insurance that is eligible for federal subsidies.
“We don’t know how these (health insurance exchanges) will be structured, who the carriers will be or how they will be purchased,” Johnson said. “We’re left in limbo.”
Johnson said hospitals in rural counties such as Robeson that have large numbers of poor residents and residents without insurance will be most affected by the state’s decision to block Medicaid expansion.
“If we don’t find a way to be reimbursed for the services we perform, we will lose out — bottom line,” he said.
Don Dalton, a spokesman for the North Carolina Hospital Association, said federal cuts to hospitals are mandated under the Affordable Care Act, slated to become effective Jan. 1, 2014.
“Over 10 years, hospitals in North Carolina are being cut by $5.6 billion,” he said.
Dalton said hospital trustee boards across the state are going to have to make difficult decisions on what services they can offer in their communities. About 50 percent of what a hospital spends is on personnel, he said.
He added that hospital officials will continue to talk to legislators about how their decision to block Medicaid expansion will affect hospitals and residents across the state.
“It will take a while before the impact of all of this is felt,” he said.
State Sen. Michael Walters and state Rep. Garland Pierce, both Democrats who represent Robeson County, were among those voting against blocking Medicaid expansion.
“Our hospitals are going to be under great financial stress,” Walters said. “Not only will we not be getting the federal money for expansion, the money we should receive will be going to other states who are going to provide for Medicaid expansion.”
Added Pierce: “I’m very disappointed in our legislators. We’re going to leave more than 500,000 people uninsured. People are going to start using the hospital emergency room as their primary source of medical care. It’s going to overtax the system.”
Reps. Charles Graham, Ken Goodman and Ken Waddell, all Democrats who represent parts of Robeson County, also supported the expansion of Medicaid.
Republicans strongly backed the bill, which GOP Gov. Pat McCrory has indicated he will sign into law. Several Republicans
have said they opposed the bill because they don’t believe federal money will continue into the future, and the state will be left having to cover the cost of Medicaid.