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25 W.Va. hospitals see $265 million drop in uncompensated care

More than two dozen West Virginia hospitals saved more than $265 million last year through reductions in uncompensated care from 2013 to 2014, according to data from the West Virginia Health Care Authority compiled by West Virginians for Affordable Health Care.

More than 200,000 West Virginians have gained health insurance since the Patient Protection and Affordable Care Act expanded coverage in 2013, including more than 165,000 new Medicaid recipients and more than 34,000 newly insured in the individual market. Because the state’s uninsured rate has dropped markedly — from 17.6 percent in 2013 to an 8.3 percent in the first half of 2015, according to Gallup — hospitals have had to provide less charity care to the uninsured, and have seen more reimbursement from those now covered by expanded Medicaid.

Charleston Area Medical Center, the state’s largest hospital, saw a $64.5 million drop from 2013, when they provided $137 million in free care, to 2014, when their charity care and bad debt dropped to $72.6 million — a 47 percent reduction in uncompensated care, according to Perry Bryant, founder and former director of West Virginians for Affordable Health Care.

West Virginia University Hospitals’ uncompensated care was cut by more than half — 54 percent — from 2013 to 2014, from $94 million in free care in 2013, to $43 million in 2014, saving the system $51 million.

Many of West Virginia’s larger hospitals have indicated that losses in Medicare reimbursement, which was cut to help fund the Medicaid expansion, have cut into those estimated savings, but Bryant said each hospital is still saving millions more than prior to the ACA.

“While accountants can debate the exact amount of savings to hospitals in West Virginia, it is clear that they saved tens of millions of dollars on uncompensated care,” Bryant said. “They should be using this new source of funding to make real improvements in the health of communities throughout the state.”

Six other hospitals saved more than $10 million in uncompensated care. United Hospital Center saved $22.3 million, Cabell Huntington Hospital saved $16.6 million, Berkeley Medical Center saved $15.5 million, Raleigh General saved $12.9 million, Mon General saved $11.5 million, and St. Mary’s Medical Center saved $11.5 million. Statewide, the cost of uncompensated care was reduced by nearly 40 percent.

“This windfall of savings is an once-in-a-lifetime moment for hospitals to make meaningful changes in the health outcomes of West Virginians,” Bryant said. “If hospitals would direct a fraction of this windfall to fund community efforts, West Virginia could make major strides in reducing obesity, smoking and drug abuse.”

Thomas Health System saw a decline in uncompensated care for both Thomas Memorial Hospital and Saint Francis Hospital totaling $12 million, and the total write-offs for Medicaid adjustments more than doubled during the same time period for a total $26 million increase, according to Renee Cross, the vice president of finance for Thomas.

“We have seen more than a one-to-one shift from uninsured to Medicaid since the expanded program began on January 1 of 2014,” Cross said. “Historically, patients without insurance coverage were less likely to seek medical care until their medical condition was at an advanced, and sometimes critical, state. Now with access to Medicaid coverage, the patient is more likely to seek preventive care and medical care at an earlier stage of illness if they have access to a primary care physician.”

Cross added that the problem is that in many rural areas of West Virginia, primary care is not easily accessible, and so many new Medicaid patients are turning up in hospital emergency rooms seeking treatment.

“These patients are more frequently presenting to hospital emergency departments not only for emergent care, but also for their primary care needs,” she said. “This has contributed to increased ER volumes, and increased volumes typically lead to increased wait times. It costs more to provide care for these patients than Medicaid reimburses.”

Cross said that although Medicaid reimburses for care, unlike charity care and bad debts, it still costs more to care for patients than the program reimburses.

“In fiscal year 2014, Thomas Health System lost almost $10 million on taking care of Medicaid patients,” she said. “Annually, going forward, we estimate that we will continue to lose more than $8 million taking care of our Medicaid population. Thomas Health System has seen about a 30 percent decline in bad debt and charity care combined, but has seen more than a corresponding increase in Medicaid volume and write-offs. We have to continue focusing on providing quality, compassionate and cost-effective healthcare to all of our patients to ensure the continuation of our mission and ministry by excelling at providing the human touch in healthcare.”

According to the West Virginia Hospital Association, more than 70 percent of patients that West Virginia hospitals treat are covered by either Medicaid, Medicare, or some other government-funded program. Joe Letnaunchyn, president and CEO of the hospital association, said in a release that government payors pay below the cost of treating patients, and any benefits from the Medicaid expansion have been offset by cuts to Medicare.

“Being one year removed from Medicaid expansion and new marketplace options, along with other payment changes, not to mention economic, demographic, and regulatory challenges throughout the healthcare industry, the landscape still remains undefined,” he said.

But for Bryant, the real savings created by the shift away from charity care and bad debt mean that the ACA is working, and hospitals should look toward creating more momentum by investing in more preventive health measures.

“They’re not getting paid at cost, but they’re better off than they were. Should we look at bringing government payors up? Absolutely, and we’re looking at how to do that, because it would be incredibly expensive to do,” he said. “Hospitals need to broaden their horizons and do more for the community than they’ve been doing, because they have more money to work with.”

Reach Lydia Nuzum at lydia.nuzum@wvgazettemail.com, 304-348-5189 or follow @lydianuzum on Twitter.

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