Federal funding cuts have led to Missouri's shrinking healthcare work force
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Federal funding cuts have led to Missouri's shrinking healthcare work force

Date: October 10, 2014
By: Xavier Crayton-Bradford
State Capitol Bureau

JEFFERSON CITY - Federal funding cuts have cost Missouri hospitals jobs and led to the shutdown of two facilities according to some health officials.

The Missouri Healthcare Association reported that by the end of September, hospitals had announced the elimination of about 1,800 positions since 2013.

The organization's figure was calculated from reports by local news organizations and, in a few cases, hospital reports.

In addition, according to the Missouri Foundation for Health, federal funding reductions have been cited by two rural hospitals that recently announced their closures -- one in the central part of the state and the other in southwest Missouri.

The cuts are in various federal programs that provide reimbursement to hospitals that care for lower-income patients.

One of the major reductions involves federal funds that are provided to hospitals for treatment of uninsured patients.

Federal law requires most hospitals to accept patients regardless of ability to pay.

These are patients without private insurance or coverage by Medicaid or Medicare. 

Another major reduction is in funds to hospitals that have a higher proportion of Medicaid and Medicare recipients because those programs provide lower reimbursement rates than private insurance.

Other reductions involve federal financial penalties in payments for higher infection rates and readmission rates.

One of the major federal funding reductions will be phased in over several years.

The Missouri Hospital Association has estimated a projected cost to Missouri hospitals from those cuts at more than $1 billion per year when the cuts are fully phased in by 2019.

The association reports that Missouri hospitals spent $1.1 billion dollars in uncompensated care in 2012 for patients without any health care coverage or in unpaid or underpaid coverage claims.

Some of the federal cuts are based on the assumption that hospitals would be seeing fewer uncovered patients because of insurance requirements of the health insurance requirement of the Affordable Health Care Act.

The law requires most people to have health insurance. In addition, for people with lower incomes, the federal law required states to expand Medicaid coverage for adults with incomes below 133 percent of the federal poverty level.

That Medicaid requirement, however, was struck down by the U.S. Supreme Court -- leaving it up to each state as to whether to expand Medicaid coverage.

Missouri is one of 23 states that has not expanded Medicaid. According to the Henry J. Kaiser Family Foundation, 14 percent of Missourians are uninsured, below the national average of 15 percent.

The reduction in federal hospital payments has been one of the arguments raised by Missouri proponents for Medicaid expansion -- that it would provide guaranteed financial coverage for more patients showing up at hospitals.

Sen. Rob Schaaf, R-Buchanan County, has questioned the actual effect of the federal funding reductions to hospitals.

Schaaf, the Senate's only physician, argues that hospitals simply are increasing the charges for patients with private insurance to cover the cost of care for uninsured and under-insured patients.

Schaff argues that this "cost shifting" gives medical facilities enough financial flexibility to pay for needed staff.                 

Sen. Jamilah Nasheed, D-St. Louis, said that the legislature anticipated economic consequences without Medicaid expansion, and expressed optimism that Medicaid expansion can be passed this spring.

"I think we have a shot at it next session." Nasheed said.

Some Republican legislators have predicted the Medicaid expansion would have more traction if and when the federal funding reductions take full effect.

In 2013, Senate GOP leader Ron Richard, R-Joplin, proclaimed Medicaid expansion dead for that year's session after Pres. Barack Obama delayed implementation of one of the major Medicaid cuts to hospitals.