WHA Members Advocate for Medicaid Reimbursement at JFC Hearings

Health care leaders ask JFC to use Medicaid surplus to increase provider rates, support GME

April 07, 2017

The Joint Finance Committee (JFC) took to the road this week to gather feedback from residents across the state on the proposed 2017-19 biennial state budget. Several leaders from Wisconsin hospitals and health systems testified at the JFC hearings and asked the Committee to consider increasing its support of the Disproportionate Share Hospital (DHS) program, a program that is designed to offset hospital Medicaid losses.

"Hospital and health system leaders are testifying at every JFC public hearing to ensure legislators know Wisconsin must make investments in our Medicaid program that improve our provider reimbursement rates and reduce the ‘hidden health care tax’ on our employers," according to WHA Senior Vice President Kyle O’Brien.

Speaking at the Platteville hearing, David Hartberg, CEO, Gundersen Boscobel Area Hospital and Clinics, told JFC members Wisconsin needs to increase its support of the Medicaid Disproportionate Share Hospital (DSH) program, a program ranked fifth smallest in the country. Hartberg noted the Wisconsin Medicaid program experienced a more than $300 million surplus in 2017, which is not being used to increase provider reimbursement rates and without action, will be lapsed into the state’s general fund.

"As hospitals, we feel we have paid for this surplus because of Medicaid losses resulting from below-cost reimbursement," according to Hartberg. "We respectfully ask that the state invest at least $30 million of that surplus back into Medicaid payments and health care workforce initiatives. This investment—amounting to less than 1/10th of the surplus—will help offset Wisconsin’s Medicaid reimbursement rates that rank 48th in the entire country."

At the hearing in Milwaukee, Steve Francaviglia, president, Aurora Health Care Greater Milwaukee South, testified that insufficient Medicaid funding continues to be a major problem. He said Aurora Health Care’s most recent Medicaid shortfall was $320 million, at cost. Meanwhile, the Medicaid program has experienced a surplus of more than $300 million.

"While we are happy to see a stable Medicaid budget, the program still just pays 65 cents on the dollar, meaning that the surplus has been paid for by hospitals and their patients. We ask that a portion of those funds be used to improve health care for our state’s sickest and poorest citizens," Francaviglia said. "In the past this committee has supported the DSH program, which helps safety net hospitals serve a population like Aurora Sinai that is comprised of 50 percent Medicaid beneficiaries. We ask that you strengthen the DSH program. We appreciate the support that we have received in the past to support hospitals like Sinai."

In addition, Francaviglia asked the JFC to consider making investments in innovative programs that have proven results, such as the care coordination program at Aurora. He said Aurora has decreased ER visits by 39 percent while providing better care at less cost. He also told JFC members there has been a tremendous increase in the demand for outpatient behavioral health services, but they have seen an insufficient investment in mental health that could help the state’s more vulnerable patients access care.

Kevin Kluesner, CAO, Ascension St. Joseph Hospital, Milwaukee, said statewide the Medicaid shortfall tops $1 billion. Ascension hospitals alone account for nearly $200 million of that shortfall, while providing $30 million in free care for people with no ability to pay.

"For an urban safety net hospital like mine with few commercial payers, there is nowhere to shift those costs, and we have a chronically large number of uninsured. The Wisconsin Medicaid program experienced a more than $300 million surplus in 2017. Unfortunately that is not being used to increase provider funding but is being pulled into the general fund," Kluesner said. "I ask you to invest $30 million back into Medicaid payments and into the expansion of graduate medical education. I think it is a small ask that will sustain safety net hospitals and ensure we train enough physicians and other providers to care for our state’s residents as our population continues to age."

The JFC will continue to hold hearings, today (April 7) in Berlin, in Spooner April 18, Ellsworth April 19 and Marinette April 21.

This story originally appeared in the April 07, 2017 edition of WHA Newsletter