Mississippi will soon give the Regional Medical Center at Memphis (The MED) a financial bump, thanks to newly-approved Medicaid supplemental payments to the regional safety-net hospital that treats more than 3,000 Mississippians annually.

 

In March, the Centers for Medicare and Medicaid Services (CMS) approved a Medicaid state plan amendment for Mississippi that allows The MED to participate in a Medicaid Upper Payment Limit program, which is designed to balance out the difference between Medicaid reimbursement and reimbursement rates allowable under Medicare payment principles, based on patient experience data.

 

This year, program funds will translate into approximately $3.8 million for The MED, in addition to money coming from Mississippi’s long-standing inclusion of The MED in Mississippi’s Trauma System and new participation in the State’s Burn Fund for treating uninsured burn victims.

 

“This approval is evidence of the collective recognition of the vital role The MED plays in providing emergency and on-going health care to Mississippians,’’ said Reginald Coopwood, MD, named CEO of The MED earlier this year. Last fall, The MED Board of Directors voted 7 to 1 to send a proposal to the Shelby County Commission to close its Emergency Department if it could not get $32 million in additional funds by Feb. 1.

 

Mississippi Gov. Haley Barbour, the Mississippi Division of Medicaid, state lawmakers and the Mississippi Hospital Association worked together for several months with The MED to help finalize the hospital’s participation in the complex Mississippi supplemental Medicaid payment program, under which The MED will make an intergovernmental transfer. The transfer will be used to draw matching federal dollars. Federal law would normally prohibit a hospital located across state lines from making an intergovernmental transfer and receiving funds from such a program. However, Tennessee’s congressional delegation was successful in placing into federal law an exception for The MED.

 

The MED currently bills Mississippi’s Medicaid program for services provided to Mississippi Medicaid patients for healthcare.  

 

The announcement of the new funding source for The MED comes after many collaborative meetings with Arkansas, Mississippi and Tennessee officials.

 

The MED’s financial plight resulted from being under-funded and under-capitalized for more than 15 years, with subsidies from Shelby County and the State of Tennessee not keeping pace with inflation, and nominal financial support from Arkansas and Mississippi—states with significant representation in The MED’s Emergency Department patient mix. The MED’s ability to serve as the regional safety-net facility had been compromised based on myriad challenges—a growing uninsured population, an antiquated physical plant, a payor mix that provides significantly less money than costs, a flat county subsidy, and unpredictable financial support from all three states—compounded by years of shortfalls in operational funding and few capital investments. For the fiscal year that ended June 30, 2009, The MED reported more than 55,000 visits to its Emergency Department and a net income loss of $20.9 million.

 

The $32 million in additional funds requested by The MED’s Board was very specific—the difference between the total operating subsidy of $95 million and the current average annual operating subsidy of $63 million—to allow meeting cash flow needs.

 

At the first meeting on Dec. 3 of a 23-member task force appointed in November, chaired by Shelby County Mayor Joe Ford, to come up with solutions to The MED’s revenue crisis, commissioners pointed to Tennessee as the primary culprit for failing to pay its share to The MED. Even though The MED generates more than $80 million in federal funding for the state, it had received less than half that.

 

Looking to Arkansas and Mississippi for additional monetary support was not a high priority, said commissioners, who viewed the neighboring states “as the last two ornaments on the Christmas tree.”

 

Both states have worked diligently to provide The MED with new and innovative financial support. In December, Arkansas gave The MED $500,000 from the state’s tobacco fund, with a similar guarantee through 2011, and another $2.5 million a year for The MED. Mississippi has taken various measures.