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VCU continues to lobby for Virginia to expand Medicaid after the GOP killed an expansion bill on Sept. 18.
The Affordable Care Act created a health care exchange where insurance buyers could compare options and provide subsidies to those who qualified.
The legislation also opened up federal funds for states to expand Medicaid programs. While expanding these programs the federal government will cut funding in other places, such as Disproportionate Share Hospital payments.
“The logic was that as coverage increased, the need for these supplemental payments would decrease,” said Karah Gunther, the VCU director of government relations.
She said VCU Health System receives about $300 million in DSH funding annually.
VCU Health System and the University of Virginia Health System are treated differently than other hospitals in Virginia code. Gunther said both receive more Disproportionate Share Hospital money because of the high volume of indigent and uninsured patients they see on a daily basis; they are not allowed to turn these people away and must cover the cost.
But since Virginia has not expanded Medicaid they will not receive federal funds when cuts take place in FY 2017. When the Supreme Court took on the Affordable Care Act they said that states had the option of expanding Medicaid.
“The ruling was very narrow, it didn’t fix the cuts that were happening already,” Gunther said of the Supreme Court’s decision.
Gunther said this creates a serious coverage problem for health care providers. Uninsured patients will come in for treatment and the hospital won’t have the supplemental payments to fall back on.
A recent study by the Thomas Jefferson Institute for public policy said that the expansion of Medicaid is unnecessary because hospitals are financially healthy enough to incur the costs themselves. The study showed VCU Health System as having a $129,970,176 yearly profit and a $1 billion net worth.
The Virginia Hospital and Healthcare Association came out after this study with a statement that called it flawed. Gunther said the study was one the state should not base its policy on.
“Unfortunately, the two-year old data used in the Thomas Jefferson Institute report released today take a rear-view look in the mirror, which fails to account for the fiscal headwinds Virginia’s hospitals and health systems face now and into the near future,” the Virginia Hospital and Healthcare Association’s response reads.
The study only looked at one year of data from Virginia hospitals. Gunther said it also doesn’t take into account the full effect of federal funds and new pressure in the market for payers.
VCU Health Systems is working to educate and sway legislators on this issue. Gunther said they have had numbers one-on-one educational session and they have spoken with state level money committees.
Last year hospitals in the Richmond area came together alongside VHHA to back the Medicaid expansion.
“I thought that was a really powerful event,” Gunther said. “We were all speaking with one voice when a lot of the times the community hears us at odds with one another.”
And yet the vote on Sept. 18 showed what many already knew: the issue remained bitterly partisan.
“I’ve never seen an issue that has been this politically divisive,” Gunther said.
The bill was introduced by Del. Tom Rust, a republican from Herndon. His bill was similar to what other states have done, which is to create coverage options tailored specifically to the state. Arkansas, for example, took federal funds for Medicaid expansion and gave it to citizens by private plans on exchange.
“You are starting to see the conversation change a bit,” Gunther said of the debate.
But since it is the middle of an election year, she doesn’t think conservative politicians will be willing to support such a debated topic right now.
Pamela Lepley, a spokesperson for both VCU and VCU Health System, said the issue and the impact of leaving it unresolved has been communicated to multiple levels of government.
“It is safe to say that if DSH reductions remain in place and if there is no solution to close the coverage gap, significant cuts would need to be made that would affect the entire academic medical center,” Lepley said.
Both Lepely and Gunther said VCU Health System is working on backup plans for what to do if DSH funding is slashed. The details of these plans, though, are unavailable, they said.