Treating more, say hospitals

Also: Uninsured’s tally sank in state

Arkansas hospitals reported treating more patients last year than the year before at a time when the number of patients who lacked insurance fell significantly, according to a summary of an industry survey released Thursday by the Arkansas Hospital Association.

As a result of the changes, hospital financial losses from treating the uninsured fell by 57 percent, from $270 million in 2013 to $116 million in 2014, the 62 hospitals that responded to the survey by the association and the Healthcare Financial Management Association reported.

Bo Ryall, the Arkansas Hospital Association's chief executive officer, credited the expansion of Medicaid coverage under Arkansas' private option with reducing the cost to hospitals for caring for the uninsured.

The change, he said, is helping to offset cuts in Medicare reimbursement that are expected to cost the state's hospitals $3.5 billion through 2024.

The private option "is not a windfall for hospitals," but it's "going to keep a number of hospitals open that otherwise would be having significant financial problems right now," Ryall said.

Ryall said the private option, which was established under the federal Patient Protection and Affordable Care Act, has helped keep Arkansas from having as many hospital closures as states that did not expand Medicaid.

The findings were similar to the results of a survey, also done by the associations, of care provided by 43 hospitals during the first half of 2014.

State Sen. Jim Hendren, R-Sulphur Springs and chairman of a task force exploring changes to the state's Medicaid program, said it's not surprising that "spending a billion dollars a year in the state is going to have some results."

But he noted that the state's spending on the private option last year included more than just hospital care.

According to the survey, the hospitals reported receiving $191.1 million in reimbursement under the private option last year.

"This is a very small piece of the puzzle," Hendren said of the hospitals' reimbursement.

The state Department of Human Services has reported that the state's payments to insurance companies under the program last year totaled $773 million.

The hospitals responding to the survey included 56 of the state's 71 general, acute-care hospitals and six of its specialty hospitals.

According to the hospital association, the responding hospitals account for more than 80 percent of patient revenue and hospital admissions in the state.

The hospitals reported that overall emergency room visits increased 5 percent, but emergency room visits by the uninsured fell by 38.8 percent, from 272,172 in 2013 to 166,604 in 2014.

The number of uninsured patients admitted for in-hospital treatment fell 48.7 percent, from 22,786 to 11,698, and their outpatient visits fell 45.7 percent, from 180,213 to 97,801.

The earlier survey, covering the first six months of 2014, found that overall visits to emergency rooms increased 1.8 percent compared with the first six months of 2013.

Ryall said even the 5 percent increase in such visits for the full year is less than what many people expected.

He noted that the private option provides coverage through commercial insurance policies, which he said are more widely accepted by primary-care doctors than traditional Medicaid coverage. That gives private-option enrollees easier access to options besides the emergency room, he said.

"Yeah, we're going to see the emergency department grow, definitely, but we're pleased that it's only grown by 5 percent," Ryall said.

Hendren said he found the increase troubling.

"It tells me that we've still got a lot of work to do to get a handle on how to deliver health care services efficiently," Hendren said.

The private option is the state's primary way of covering Arkansans who became eligible for Medicaid under the state's expansion of the program for coverage that started Jan. 1, 2014.

The expansion extends coverage to adults with incomes of up to 138 percent of the poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.

According to the state Department of Human Services, more than 218,000 people were enrolled in the private option as of May 15, while about 25,000 other newly eligible adults were assigned to the traditional Medicaid program because they were considered to have exceptional health needs.

As long as the cost of the private option stays below specified levels, the federal government is expected to pay the full cost of covering the newly eligible adults until 2017, when Arkansas will begin paying 5 percent of the cost.

The state's share of the cost will then increase every year until it reaches 10 percent in 2020.

Citing the eventual cost to the state and opposition by some lawmakers and others, Gov. Asa Hutchinson earlier this year called on the Arkansas Legislature to create the task force, which is expected to recommend a program that will replace the private option starting in 2017, when the federal waiver authorizing the private option expires.

Ryall said that, compared with expanding traditional Medicaid, the private option has been a bigger financial help to hospitals because commercial insurance policies generally have higher reimbursement rates than Medicaid.

But even the private option didn't fully cover the hospitals' costs, according to the survey.

Still, Ryall said, "we're very happy with where we are because these people could be uninsured or we could be getting Medicaid rates."

A Section on 07/10/2015

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