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Hospitals facing financial hit



A deal reached three years ago appears to be unraveling, said Fred Rankin, and hospitals such as Mary Washington will suffer if it does.

Rankin, president and chief executive at Mary Washington Healthcare, spoke Wednesday night at a community forum on the Affordable Care Act. The event was sponsored by the Virginia Poverty Law Center, Rappahannock Legal Services and Virginia Consumer Voices for Health Care.

The deal Rankin was referring to was an agreement made in 2009–2010 between American hospitals and government policy makers. Lawmakers wanted to include cuts in Medicare payments to hospitals in the Affordable Care Act.

Hospitals agreed, Rankin said, in part because the proposed law also included access to health insurance for millions of uninsured Americans.

The law would require some of the uninsured to purchase insurance through new exchanges. In addition, the federal and state governments would expand the Medicaid program for the poor and disabled. The result would be fewer people without insurance and less charity care provided to the poor.

“With fewer uninsured patients, the theory was, hospitals would be better able to absorb these reductions in payment,” Rankin said.

The law passed in 2010, and the payment reductions have already started, Rankin said. Virginia hospitals expect to see Medicare payments cut by $122 million in 2014, he said.

On the other side of the equation, enrollment for the new exchanges will begin in October, but the Medicaid expansion is in danger.

With the Supreme Court’s blessing, many states, including Virginia, have said they won’t participate. Gov. Bob McDonnell told legislative budget committees this week that his new budget has no money for Medicaid expansion.

That leaves hospitals, such as Mary Washington, Stafford and Spotsylvania Regional, in a “perfect storm,” Rankin said. Federal revenues will continue to decline, yet hospitals will still have to care for the poor and uninsured, with little reimbursement.

Actually the insured patients pay the tab, Rankin said.

“Historically hospitals have shifted these shortfalls to those individuals who carry commercial health insurance. That was the dirty little secret of American health care,” he said.

The new General Assembly session starts in January, and Rankin said he will look to lawmakers to reverse McDonnell’s decision.

“Ultimately it will be the General Assembly that decides,” he said.

Jim Hall: 540/374-5433