Hospitals prep for Medicaid funding cuts
Hospitals across Montana are preparing for a decrease in Medicaid funding through layoffs and program “realignments” as the fallout from last year’s state budget shortfall continues to land on Montana’s health care providers.
The cuts are coming to Montana’s Medicaid reimbursement rate, which provides hospitals with funding to serve patients on the federal health care program. It’s part of an attempt by the Montana Department of Health and Human Services to address the $49 million in cuts assigned to the department last fall in a special state legislative session following a statewide budget shortfall of $227 million.
Medicaid — the program which combines federal and state funds to provide coverage to people who can’t afford health insurance or nursing home care — was expanded in Montana under the Affordable Care Act in 2016.
Kalispell Regional Healthcare is expected to lose $6.6 million in Medicaid funding this year, and has begun to address the funding gap through staff layoffs in recent weeks. Kalispell Regional Communications Director Mellody Sharpton did not specify the number of layoffs but said that it was “considerably less than 1 percent” of those employed by the health system and that none were involved in direct patient care. Kalispell Regional employs over 4,000 people in Northwest Montana.
That $6.6 million loss will also land, in part, on North Valley Hospital in Whitefish, which has been under the Kalispell Regional umbrella since an affiliation in 2016. North Valley Community Relations Manager Allison Linville said she had no additional information on layoffs or potential staff changes at the hospital.
Statewide, hospitals in Montana have also been strained by the reimbursement cuts. The Bozeman Daily Chronicle reported last week that Bozeman Health expects a $2.6 million cut in reimbursements and will absorb the loss without cutting services or staff. Instead, they will attempt to recoup the difference by saving money on supplies such as medications or equipment.
Community Medical Center in Missoula announced Friday that it was eliminating 16 staff positions in response to the cuts, which they said would decrease its funding by more than $6 million in 2018.
More changes could be forthcoming if Montana’s Medicaid expansion is not renewed in next year’s meeting of the state Legislature. The 2-year-old program, which expanded Medicaid under the Affordable Care Act, now enrolls over 94,000 Montanans — nearly one in 10 residents.
The program has cost $802 million during its first two years. The state of Montana has paid for 5 percent of that number, while the federal government contributed the other 95 percent.
A recent report by the Montana Healthcare Foundation predicted that the program could pay for itself by generating $350 million to $400 million of new spending in Montana’s economy between 2018 and 2020. According to the report, the Medicaid expansion injects money into Montana’s economy by supporting new health care spending, shifting the cost of Medicaid care from providers to the federal government and promoting economic activity, such as 5,000 jobs and $270 million in personal income by 2020.
As of now, the expansion is set to expire next year.