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MWH chief lobbies for Medicaid

RICHMOND—Perhaps most hospital CEOs in Virginia could get an audience with the Speaker of the House of Delegates.

But the CEO of the speaker’s local hospital definitely can.

Fred Rankin, president and CEO of Mary Washington Healthcare in Fredericksburg, was in the General Assembly building Monday to lobby for Medicaid expansion, a visit that included a one-on-one meeting with House Speaker Bill Howell, R–Stafford.

Medicaid expansion may be the biggest issue of this General Assembly session. New Gov. Terry McAuliffe wants to expand the program to cover more low-income Virginians. Democrats who now run the Senate also are in favor of expansion, but Republicans who run the House are not.

The issue is likely to boil down to a fight through the state budget, particularly now that Democrats in the Senate have control over what budget priorities that body pushes.

MWHC has joined other hospitals around the state in asking state lawmakers to approve expansion of Medicaid eligibility. Doing so would provide health insurance for up to 400,000 more Virginians, meaning those people would have a way to pay for the health care they already receive in emergency situations.

Hospital leaders want that coverage money to help make up losses they’re expecting to suffer from Affordable Care Act cuts to Medicare payments and in other areas.

Republicans in the House, including Howell, say there’s no chance of expanding Medicaid this year. They want more time to test reforms they think will save the program money and increase its efficiency, and they mistrust federal government promises to cover most of the costs of expansion.

For Rankin, that means the most powerful delegate in his area opposes something he believes his hospital needs.

Hence his meeting Monday with Howell—which Rankin described as “cordial”—and his plans to bring the entire MWHC board down to the General Assembly next week to meet with local lawmakers on the expansion issue.

“We need to find a way to close the gap,” Rankin said.

The Virginia Hospital and Healthcare Association estimates its member hospitals stand to lose $306 million in 2016 alone from ACA-related cuts. That’s after $251 million in losses in 2015.

The VHHA’s numbers show that MWHC would expect to lose about $12 million from ACA cuts in 2015, 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 expansion, a $12 million net gain with it.

Rankin expects MWHC to see losses of about $12 million to $15 million a year from ACA cuts by the end of the decade.

Medicaid expansion wouldn’t make up all of the losses, Rankin said, but it would help the hospital recoup “a fair portion of that.”

He said MWHC provided about $26 million in charity care last year—some of that would have been provided to people who’d be covered by insurance if Virginia expanded Medicaid.

MWHC can’t afford big losses, Rankin said. The non-profit hospital group lost $22 million in 2012.

Rankin said MWHC’s end-of-year balance sheets for 2013 will look better, with a loss of about $4 to $6 million.

“The days of huge profits at MWHC are over,” he said.

Rankin said his position and Howell’s are both “pretty clear.”

What he asked Howell, he said, was whether there’s any room for compromise.

“If there’s another model, we as an industry are open,” Rankin said.

He feels hopeful that Howell heard him.

“I believe he genuinely understands the position the industry is in,” Rankin said.

Asked about his talk with Rankin, Howell said he’s hopeful that the reforms sought by the Medicaid Innovation and Reform Commission will save enough money —money now being wasted or spent inefficiently, he thinks—for the state to be able to afford to cover more people on its own.

Howell’s also looking at pilot programs for Medicaid expansion in Florida, hoping something that works there might work in Virginia.

Either way, though, he remains convinced that little in Virginia’s eligibility will change in the short term.

“I don’t think it’s going to happen this year,” Howell said.

So far this session, House Republicans’ position has largely been that Virginia should give the Medicaid Innovation and Reform Commission more time—months, if not years—to enact and measure reforms in the Medicaid program before considering expansion.

But the Senate, like Rankin, seems to be seeking other models.

On Monday, the Senate Commerce and Labor Committee briefly heard a bill from Sen. John Watkins, R–Powhatan, that would create a state-based exchange for insurance that he hopes would help low-income people get coverage.

Watkins said his legislation is still in flux, and it was sent on to the Finance Committee for more work.

He called it “a fundamental piece of legislation that will allow us to proceed with developing a method of health insurance coverage for individuals that aren’t otherwise covered by Medicaid.”

Watkins said he envisions a private marketplace that uses “private dollars to the extent possible [to] pool the cost and spread out the premium base.”

Watkins’ state exchange bill isn’t the only thing related to Medicaid expansion that the budget-writing Senate Finance Committee will have to look at.

Sen. Emmett Hanger, R–Augusta—who, like Watkins, is a member of the Medicaid Innovation and Reform Commission charged with looking into ways to improve the program—has filed a number of budget amendments that would expand Medicaid and enable other reforms and changes to health care.

Hanger said he views his proposals as not just expansion of coverage, but “health care reform in a broader way.”

One amendment does authorize the Department of Medical Assistance Services to go ahead and apply for federal dollars to pay for expansion, while also seeking authorization to require co-pays and alignment of services more closely to commercial insurance.

But Hanger says he’s trying to find a way to get the federal dollars and cover more people “without expanding Medicaid as such.”

He wants something that has a private option and allows for more marketplace competition, he said.

But the politics are getting in the way, Hanger added, “dominating everybody’s mind.”

He said the Watkins bill is a “piece of the puzzle.”

Hanger said there could be a separate bill introduced to cover all of those puzzle pieces, but he doubts it would get much of a hearing from the House, which is why he’s currently working through the budget.

Chelyen Davis: 804/343-2245


Under the Affordable Care Act, states were to expand the Medicaid program to cover people earning up to 138 percent of the Federal Poverty Level ($15,856 for an individual or $26,951 for a family of three in 2013). The law requires the federal government to pay for 100 percent of expansion costs the first three years, then 90 percent thereafter.

But the U.S. Supreme Court struck down the Medicaid expansion provision in the law, saying it should be an option for states.

As of January 2014, 25 states and the District of Columbia have opted to expand Medicaid. Virginia so far as opted not to do so but has a legislative commission charged with looking into reforms including expansion.