Governor’s latest Medicaid cuts to take thousands of dollars out of Hutchinson

Gov. Sam Brownback’s latest tactic to balance the state’s budget on the backs of Medicaid providers will mean thousands of dollars lost in Hutchinson.

Last week, Brownback announced that Kansas will forgo more than $120 million in state and federal dollars to balance the state budget.

In doing this, the Kansas Department of Health and Environment and Kansas Department for Aging and Disability Services, which administers Medicaid, will see a combined reduction of $57.4 million – mostly from Medicaid.

Health care providers who serve Medicaid patients, as a result, will see reimbursement rates reduced by 4 percent in July. Those providers, however, led by the Kansas Hospital Association, have pledged to fight the cuts, appealing to the federal government and, if necessary, in court.

“The rate of reimbursement for Medicaid doesn’t pay for the service anyway,” said Mike Garrett, CEO of Horizons Mental Health Center in Hutchinson.

This reduction will make it even more challenging for Medicaid patients to find services, he added.

“The current state of the Medicaid reimbursement system limits access to care, and there’s no incentive for physicians to want to take more Medicaid patients,” said Ken Johnson, president and CEO of Hutchinson Regional Healthcare System. “Now, it’s going to be even tougher.”

Horizons is expecting to see $300,000 in lost revenue this year as a result of the reduction.

Garrett said he doesn’t believe the center, which falls under the umbrella of Hutchinson Regional Healthcare System, will have to eliminate staff.

Johnson said the health care system will lose about $700,000 – around $300,000 coming from Hutchinson Regional Medical Center.

“The impact to our health system budgets is significant; this isn’t an insignificant amount, as it relates to our already very lean bottom lines,” Johnson said.

He said the health care system will have to take a “hard look” at evaluating services, capital equipment and training.

Hutchinson Clinic expects to see in excess of $200,000 lost annually, said Sue Wray, director of communications.

“We have a large number of Medicaid patients and will continue to offer necessary care to Medicaid patients,” Mike Heck, Hutch Clinic CEO, said via email.

Home-based services for the disabled and 95 critical-access hospitals in rural Kansas will be exempt from the reimbursement reductions.

Medicaid providers will have to stretch their subsidy dollars even further with the 4 percent decrease, Garrett said, in addition to covering the cost of services for the uninsured.

Timothy Crater, internal medicine MD at Hutchinson Clinic, said it’s already difficult to get patients without good insurance in to subspecialists and psychologists.

“They’re already extremely busy, and trying to get another patient in, who’s going to cost them money to see, is hard to do. It’s just tough,” Crater said. “It’s not because these doctors are greedy, it’s because they’re already stretched to the breaking point.”{p align=”center”}Different situation for nursing homes

On May 17, Brownback signed HB 2365, which postponed the sunset on the Kansas Nursing Home Quality Care Assessment, or provider assessment.

The provider assessment was increased to pull federal dollars, raising Medicaid rates 11.17 percent.

Cindy Luxem, president and CEO of Kansas Health Care Association/Kansas Center for Assisted Living, said providers haven’t seen rate increases in years, and this would have given them some kind of relief for providing unreimbursed care.

Then, Kansas nursing home providers learned their reimbursement rates were going to drop by 4.5 percent.

“This is a pretty ugly situation that we’re dealing with right now,” Luxem said. “This 11 percent increase would have helped shore up what has been lacking in appropriate reimbursements for a couple of years.”

On April 14, the rates were published in the Kansas Register and Luxem reached out to KDADS to learn how they were calculated – as they’d been released in the past – and to get an explanation as to why nursing homes will receive a 4.5 percent reduction, when other Medicaid providers will only get a 4 percent cut.

She’s heard nothing back.

Final rates reflecting the latest cuts are expected to come out on or around June 2.

“Legislators need to know what the administration is doing to the elders of this state but also what the agency (KDADS) is doing,” Luxem said.

Lowell Peachey, president and CEO of Mennonite Friendship Communities, said they didn’t budget for an increase, but they were looking forward to it.

“We’re disappointed we aren’t going to receive the amount of the increase we thought we would, but at least we’ll be in a situation where we think we can live with it,” Peachey said.

He estimates the facility will see a net increase of around $250,000, but this may change when the new rates come out.

Good Samaritan Society – Hutchinson Village Administrator Brenda Janda said she doesn’t see it as a net increase. She sees it as a decrease in the amount of dollars the nursing home should be receiving.

Over half of the residents in her facility are on Medicaid – 10 of whom aren’t being paid for, as they are Medicaid-pending.

Although nursing homes will eventually see an increase in the reimbursement rates, Janda still sees it as a decrease, since the rates are based off of the last three years’ budgets.

“Basically they’re saying you’re getting paid today for the care you gave three years ago,” she said. “But our care today is more expensive.”

They’re really not getting what they need, so Janda won’t put these dollars in the budget until she sees the money. Promised dollars in the past have gone awash, she said.

What makes Garrett nervous is that there doesn’t seem to be a plan for how long the cuts will last or when the rates will be restored.

Johnson said he fears additional cuts may be felt from other agencies that currently fund services.

In addition, the Kansas Supreme Court issued its ruling Friday that the school finance formula is unconstitutional, which will likely force lawmakers to find additional money for the state’s schools before July 1. The state budget director indicated such a ruling could necessitate further cuts to Medicaid.

“That seems to be taking it to an extreme; we’re working to balance the state budget on the back of the most needy amongst us,” Garrett said, “and that doesn’t seem right.”