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Virginia hospitals join push for Medicaid expansion

RICHMOND—As the General Assembly’s 2014 session gears up, it’s quickly becoming clear that Medicaid expansion is going to be a big, and thorny, issue.

Supporters of expansion have lobbied for it for the past year by pointing to the uninsured, usually the working poor who have no insurance and can find themselves with crippling medical debt or debilitating, preventable diseases.

But hospitals hope anti-expansion lawmakers might listen to a more business-oriented argument.

Virginia’s hospitals are joining the side of expansion by showing figures about how much money they’re losing on the Affordable Care Act deal—and most show they’d see some additional profit if Medicaid were expanded.

Hospitals accepted Medicare cuts that started in 2010, thinking the money would be made up by increased Medicaid enrollment, which would cut down on the numbers of uninsured people coming to hospitals for costly treatment that hospitals often end up writing off.

But the Supreme Court said Medicaid expansion was optional for states, and Virginia is one of many states that have not opted in.

Here, conservative lawmakers say the program needs to be reformed to make it more efficient before any expansion can be considered.

Supporters of expansion point to the federal tax dollars that would pay for most of it—a practically free way, they say, to provide insurance and greater peace of mind to almost 400,000 uninsured Virginians.

The Virginia Hospital and Healthcare Association, which includes 109 community and other types of hospitals in Virginia, is trying to show lawmakers how much the state’s failure to expand could cost hospitals.

According to VHHA’s spreadsheet, its member hospitals lost $301 million between 2010 and 2014, and stand to lose another $251 million in 2015 and $306 million in 2016 from ACA-related cuts if Medicaid isn’t expanded.

If the expansion did happen, those numbers would turn from red to black.

In the Fredericksburg area, Mary Washington Healthcare stands to lose more than Spotsylvania Regional if expansion doesn’t happen.

The VHHA’s numbers show that between 2010 and 2014, MWHC lost about $12.3 million due to ACA cuts. That figure covers both Mary Washington Hospital and Stafford Hospital, although MWH accounts for the bulk of it.

For 2015, MWHC would expect to lose about $12 million from ACA cuts, but would gain a net of about $1.5 million for that year if Medicaid eligibility expands.

For 2016 the figure is larger —a $14 million loss without Medicaid, a $12 million net gain with it.

“We anticipate the cumulative impact of the Medicare cuts spurred by the ACA to be $3.7 million between 2011 and 2016 for Mary Washington Healthcare,” said Christine Amrhine, a MWHC spokesperson. “If Medicaid is expanded in Virginia, we believe the increase in additional payments to MWHC could be as much as roughly $17 million annually.”

Spotsylvania Regional’s numbers in the VHHA list are smaller, although its owner, HCA Virginia, has larger losses at some of its other Virginia hospitals.

Spotsylvania shows a $515,200 loss between 2010 and 2014 due to ACA cuts. The hospital expects to see about a $427,300 loss from ACA cuts in 2015 and $521,000 in losses in 2016. In both years, Medicaid expansion would be predicted to more than make up for it, providing the hospital an additional net $448,380 in 2015 and $1.2 million in 2016.

Katharine Webb, senior vice president with the VHHA, said some hospitals have closed, and others have had layoffs as hospitals adapt to the federal reimbursement cuts.

“Although we can’t tell you right now what’s the next domino to fall … every single hospital in this commonwealth is doing the analysis of their financial situation and getting prepared to make their tough decisions,” Webb said.

The VHHA is scheduled to present its numbers, and its argument for expansion, to the House Appropriations Committee on Monday.

That committee holds many of the decision-makers expansion advocates need to win over. House Republicans have been much more reluctant than Senate Republicans to endorse expansion, and it’s likely that any measure to expand the Medicaid program’s eligibility will go through the budget—and thus through the budget-writing Appropriations Committee.

Del. Chris Jones, R–Suffolk, that committee’s new chairman, says the Medicare cuts to hospitals come from the federal government, and that it’s not the state’s responsibility to make up for them.

“I don’t think it’s fair to this body to say if we do not expand, we are injuring certain groups,” Jones said in a floor speech in the House last week.

House Minority Leader Del. David Toscano, D–Charlottesville, had said in a separate floor speech last week that the state should help the hospitals, if only because they’re “economic engines” in their communities.

Del. Steve Landes, R–Augusta, told Toscano the same thing Jones did the next day—that federal budget cuts are out of state lawmakers’ purview.

But Landes also hinted at some way the state might help hospitals through the state budget.

Jones said the Medicaid Innovation and Reform Commission—the legislative group given authority to monitor Medicaid reforms and decide about expansion—should continue its work without being pushed into a decision.

New Gov. Terry McAuliffe, an advocate of expansion, said in a speech last week that he wants the MIRC to wrap up its work by the time this legislative session ends in early March.

Lawmakers on both sides of the issue said that isn’t likely.

“That’s a little optimistic,” said Sen. John Watkins, R–Powhatan, a MIRC member who said the group still has some areas for reform that it can explore.

Watkins does favor some sort of action to help get coverage for Virginia’s estimated 1 million uninsured people, a number he said is unacceptable.

“We cannot move forward with that burden hanging over us,” Watkins said.

He and others have spoken, fairly vaguely, about a Medicaid expansion done “the Virginia way.” What that way is hasn’t been made clear, but it seems there’s some behind-the-scenes talk among legislators about coming up with a way to expand public health coverage without calling it “Medicaid expansion,” since that term has become so politically fraught.

That’s a debate likely to play out in the state budget negotiations, rather than in a separate bill. Lawmakers must write a new two-year budget this session.

Chelyen Davis: 804/343-2245