Mississippi Gov. Tate Reeves Announces Medicaid Plan to Reimburse $700 Million to Hospitals

Mississippi Lt. Gov. Tate Reeves at a Make America Great Again rally in Southaven, Miss., on Oct. 2, 2018. Charlotte Cuthbertson/The Epoch Times

Mississippi Gov. Tate Reeves announced a comprehensive reimbursement reform plan for Medicaid that could provide up to $700 million annually to financially struggling hospitals throughout the Magnolia state.

“Over the course of my tenure, we have constantly looked for solutions to Mississippi’s pressing health concerns,” Mr. Reeves said in a Sept. 21 press release. “We’ve met with hospitals and doctors, insurance experts and community leaders. Today’s action will have a major impact, but this is still just the beginning. Our eyes are set on the future, and we aim to continue ushering in reforms that strengthen Mississippi’s healthcare system no matter where you live in the state.”

Mr. Reeves has advocated for reforming Medicaid reimbursement as opposed to expanding Medicaid.

“The expansion of Obamacare, while [it] certainly adds a significant number of people to the welfare rolls, does not have the kind of financial impact that some of you in the room and some people across the state think that it will have,” Mr. Reeves said in a press conference.

The first initiative, he said, will provide payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system.

“With these payments, hospitals will be reimbursed on a higher level than before,” he said. “The overall shift is significant, from an expected $562 million in impact funding in fiscal year 2024, to approximately $1.5 [billion] to $2 billion. This will occur not only in this fiscal year but in an ongoing basis and will provide long-term funding for Mississippi’s hospitals.”

The second initiative, he said, will supplement Medicaid-based payment rates for hospitals by reimbursing inpatient and outpatient hospital services in a fee-for-service system.

“This payment mechanism is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the work of the Division of Medicaid in May of this year,” he said. “The payment will represent an increase of an additional $137 million in fiscal year 2024. This funding will have a profound impact on the bottom line of state hospitals, both large and small.”

To reduce the financial impact of state general fund expenditures, Mr. Reeves said the nonfederal shares of the supplemental payments will be financed by what hospitals pay annually in assessments to Medicaid using a formula laid out in state law.

‘Another Band-Aid’

Proponents of expanding Medicaid, who are opponents of Mr. Reeves’ plan, such as Mississippi Democratic Party Chairman Cheikh Taylor, say the plan is inadequate.

“It’s my estimation that it takes $800 million dollars to really get this program to work,” Mr. Taylor told WJTV. “Seven hundred million dollars is another band-aid.”

Mississippi is experiencing a health care crisis.

Among its 74 rural hospitals, 24 face closures, while there’s an overall shortage of OB-GYNs and a high infant mortality rate.

The state is one of 10 that haven’t expanded Medicaid to workers whose jobs don’t have health insurance, according to the report.

The report states health officials have estimated that $1 million annually could be provided by the federal government for Medicaid expansion, with 90 percent of the cost paid for people added to the program and 10 percent paid by the state government.

Brandon Presley, the Democrat challenging Mr. Reeve’s in the November gubernatorial election, alleged that the governor’s plan was more about politics than caring about hospitals.

“If Tate Reeves really cared about ending the hospital closure crisis he created, he would call a special session and expand Medicaid so working families can get the healthcare they need,” Mr. Presley stated. “Tate Reeves has had 12 long years to do something about Mississippi’s hospital crisis and 47 days before an election is too little, too late for the hospitals that have cut essential services, lost jobs, or are on the brink of closing altogether.”

A Group Effort

In April, Mr. Reeves signed bills facilitating a $103 million Mississippi Hospital Sustainability Grant Program written to ease financial difficulties caused by the COVID pandemic.

The program makes hospitals eligible for up to $1 million through a formula by which the money is made available to hospitals across the state.

“This funding will provide a major boost for county hospitals as well as for private institutions,” Gov. Reeves said. “I also want to note that these changes will come at almost no cost to Mississippi taxpayers.”

The Medicaid system, he said, was designed to support those most in need, such as senior citizens, pregnant women, and children with disabilities.

“This increase in the reimbursement rate will help expand the opportunities for care across the state for those beneficiaries,” he said. “Furthermore, these dollars will dramatically reduce the impact of uncompensated care costs on providers. This relieves a tremendous amount of pressure on hospitals and will help place them in a more positive financial position.”

Mr. Reeves said the initiative was put together by state medical professionals.

“The plan that I’m announcing today is a result of the hard work of the folks standing behind me,” the governor said at his press conference. “Over the last four to five months, we’ve worked to put together a proposal that we believe can have a real impact on Mississippi hospitals. I’m thankful for their public service.”

The Associated Press contributed to this report.