The Mississippi Hospital Association is pleased that President Obama, in his budget proposal, realizes the problems that reducing disproportionate share hospital (DSH) payments to hospitals will cause and aims to delay the hundreds of millions of dollars in cuts to our Misissippi hospitals. While delaying the Affordable Care Act’s Medicaid DSH reductions by one year, to 2015, it would deepen the cuts in subsequent years and extend them through 2023.
Upcoming DSH cuts are not hospitals’ only concern. Obama’s proposal also contains troubling reductions to assistance to hospitals to help defray some of the cost of caring for low-income seniors who cannot pay their required share of Medicare costs. This is known as “Medicare bad debt” and support is reduced to 25% from 65% over three years starting in 2014. This will lead to a loss of $258 million for Mississippi hospitals alone over 10 years. At the same time, the proposal is imposing increased cost-sharing on our nation’s seniors, so hospitals will be shouldering a higher dollar percentage of bad debt with drastically decreased support.
Mississippi is a largely rural state, and almost one-third of our hospitals have attained critical access hospital (CAH) status. The President’s proposal — starting in 2014 —reduces reimbursement from 101% of cost to 100% and would eliminate CAH designation for hospitals less than ten miles from another hospital. This will lead to a loss of $21 million for Mississippi’s CAH hospitals over 10 years and will jeopardize the CAH status for some.
Attached below is a complete breakdown of the cuts proposed to our nation’s hospitals. It is easy to see the precarious financial position this will put our hospitals in, as almost half of the hospitals in our state already operate at a loss.