It appears hospitals aren’t quite sure how they will be impacted by the Affordable Care Act, but one thing is certain — they will lose considerable federal funding.
Medicare Disproportionate Care Hospital payments will be cut starting Oct. 1, according to the nonprofit Center for Health Care Research & Transformation. The cuts will be determined based upon percentage of the population that is uninsured and how much uncompensated care is provided.
Disproportionate-share payments are those made by the federal government to nonprofit hospitals that help them offset the costs of providing charity care to the poor.
The question remains: Will local hospitals be treating fewer patients without insurance and therefore come closer to breaking even?
Conservative estimates are funding cuts will cost hospitals in Ohio more than $1 billion by 2021 and total cuts of Medicaid funding will be $7.4 billion in the state, said Jonathan Archey, director of government affairs for the Ohio Hospital Association. The funding doesn’t fully reimburse hospitals for the care they provide to uninsured patients, but it helps offset those costs.
“The original logic behind those cuts was the funding would not be needed because more people would have insurance due to the expansion of Medicaid,” he said.
Medicaid is the federal government’s health care program for the poor, disabled and children. Last year, the U.S. Supreme Court overturned the requirement that all states expand Medicaid coverage to all of their poor population, leaving each state to decide if it will expand its coverage. The program is paid for mostly by the federal government, but Ohio picks up a portion of the cost and the state’s General Assembly has yet to approve an expansion, leaving hundreds of thousands of people, for now, without help under the Affordable Care Act.
The OHA and medical groups around the country are lobbying to have the cuts delayed, Archey said.
Even with the Affordable Care Act, hospitals will still treat patients without insurance. The fine for the first year of the act is about $90, said George P. Millich Jr., an attorney with Harrington, Hoppe & Mitchell in Youngstown.
“Estimates are that between 1 and 3 percent of people will choose not to carry insurance and pay the fine,” Archey said. “This does not include exempt portions of the population like Amish who do not have to carry coverage.”
Those estimates are based on what happened when Massachusetts started a mandatory health insurance program similar to the ACA, he said.
When asked about the impact that the ACA might have on their hospitals, ValleyCare — which runs Northside Medical Center, Trumbull Memorial Hospital and the Hillside Rehabilitation Hospital — released the following statement.
“A primary goal of health care reform is affordable medical coverage and access to health services for currently uninsured Americans. Ohio’s expansion of Medicaid and access to health-insurance exchanges should help our community’s most vulnerable citizens secure critical health care services. More people will be able to visit doctors, utilize hospital services, and obtain preventive health care. This could also create increased demand for our services in the future and reduce the burden of bad debt on our health care system.”
Yet ValleyCare cited burdensome legislative mandates including the ACA as partly why the company had to lay off the equivalent of 77 full-time positions in early August at Northside Medical Center.
The hospital’s CEO, Kirk Ray, said that if Ohio expands Medicaid, more people would have access to care and “utilization and volume trends” at the hospital would be reduced.
Other local hospitals either declined to comment or did not respond to requests for comment.
For hospitals, the key is going to be retraining people used to going to the emergency room for care that is not really an emergency, said Dr. Dominic Conti, a Youngstown physician who used to work in an emergency room.
“There are a lot of people who will just go to the emergency room when they’re sick because they don’t have insurance,” he said.
Hospitals are going to have to continue helping those without insurance determine what options are available to them, said John Palmer, director of public affairs for the Ohio Hospital Association.
Hospitals are working to help people understand what options they have, he said. In addition, hospitals are used to having mandates pressed upon them and having to figure out how to make things work.
“It happens because hospitals are on the front lines of health care,” Palmer said.
The entire point of the ACA was that no one would receive a “free ride” in medical care, said U.S. Rep. Tim Ryan of Niles, D-13th.
Insuring everyone should eliminate the issue of uninsured people, he said.
Despite the individual mandate to have insurance or pay a fine, the number of people who don’t carry insurance is not expected to decrease in states where Medicaid is not expanded, according to a study from the Kaiser Family Foundation, a nonprofit organization focused on U.S. health care policies.
Both Ohio and Pennsylvania legislators are still debating about taking additional federal money to expand their states’ Medicaid program, according to the foundation. Ohio in particular has stated the expansion will not occur this year, despite being put in the budget by Gov. John Kasich, but could be done in the next budget cycle.
Locally, it is expected that thousands of low-income residents — 9,069 in Mahoning County, 7,375 in Trumbull, and 3,731 in Columbiana — would gain health coverage under the bill if the planned Medicaid expansion occurs, according to a study conducted by Ohio State University, Regional Economic Models Inc. and the Health Policy Institute of Ohio.
The study further states that in addition to more people being covered, Medicaid expansion would add jobs: 617 in Mahoning County, 431 in Trumbull and 161 in Columbiana County.
The ACA also does some good things for hospitals, Archey said. It includes a pilot program that would improve communication among regional facilities.
“It takes things from more of a patient perspective instead of a provider perspective,” he said.