Thursday, September 21, 2023, 3:30 pm News Flash Archive

At 2 pm this afternoon, Mississippi Governor Tate Reeves announced a major increase in Medicaid payments to the state's financially troubled hospitals. He was flanked by around a dozen hospital leaders and state medical officials as he made the announcement.

For the Greenwood Leflore Hospital, now on the brink of closure, the net increase would amount to $10,255,380 annually. The increases would be retroactive to July 1, 2023.

The proposed changes in payments for the two Medicaid payment programs have been submitted to CMS, the Center for Medicare and Medicaid Services, which must approve them before they can go into effect.

Reeves' office provided a table describing the current payment plans vs. proposed new payment plans, and the net effective increase, for each hospital in the state.

According to the document, GLH is now receiving net MHAP and DSH payments of $7,445,918 per year. If the federal agency approves the changes, that number is projected to jump to $17,701,298 annually.

It's not known how long CMS might take to rule on the new payment rates.

Reeves stated that the increased Medicaid payments won't cost taxpayers any additional money in the state budget, since the increases are funded by an increase in the tax being paid by the hospitals.

Obtaining Medicaid funding from the federal government requires a state match of varying amounts, often times 20 to 25%. The state Division of Medicaid leverages state matching funds by taxing hospitals, which then benefit from the far greater increase in Medicaid payments which they receive.

The "net payments and increases" described here take into account the required bump in the tax hospitals will pay to receive the increase in payments.

In all, Reeves stated that the net increase in Medicaid payments (after hospital tax) will be around $690 million per year. MHAP payments will go up, while DSH payments will go down under the new payment scheme.

According to the press release:

The first initiative, known as the Mississippi Hospital Access Program (MHAP), will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system. With these directed payments, hospitals would be reimbursed near the average commercial rate, which has been considered the federal ceiling for Medicaid reimbursements in managed care.

The second initiative will supplement Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit. This payment mechanism, known as a UPL, is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the Mississippi Division of Medicaid earlier this calendar year.

To minimize the recurring impact of state general fund expenditures, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.

Hospitals are projected to net an increase of $689 million through these initiatives, after accounting for the funds the hospital made to help finance the initiatives.

The federal Centers for Medicare and Medicaid Services (CMS) must approve both proposals, which are being submitted. If approved, both would be effective as of July 1, 2023.

MHAP stands for "Mississippi Hospital Access Program" payments, while DSH stands for "Disproportionate Share Hospital" payments. DSH payments are given to hospitals that serve a large number of Medicaid and uninsured individuals, to try to make up for discounted and free services provided to those patients.

To see Governor Reeves' press release, view here: Gov. Reeves Press Release, September 21, 2023 re: Hospital Medicaid payment increases

To see the table describing the payment increases on a hospital by hospital basis statewide, view here: SFY 2024 New Payment Analysis

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To review our reporting on GLH and its financial woes, please see here: Index of Greenwood Leflore Hospital news articles

John Pittman Hey
The Taxpayers Channel

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