A surgery takes place at Grady Memorial Hospital in Atlanta. A large share of Grady’s patients are uninsured and can’t pay, so the federal government subsidizes the hospital for some of that. The subsidies are now being cut. PHOTO by ELISSA EUBANKS / AJC

No action from Congress as cuts loom for hospitals that care for poor

In a blow to hospitals that care for the poor, Congress left Washington Friday without blocking looming federal cuts that could cost Georgia hospitals potentially hundreds of millions of dollars.

For several years, hospitals in Georgia and other states that provide medical care to broke patients have gotten federal money to help pay for that. But when the Affordable Care Act passed, that federal money was scheduled to go away over time, because lawmakers assumed that states would expand Medicaid to insure those patients instead. But Georgia didn’t expand Medicaid, so Congress has been quashing the cuts as they come up, delaying them.

But this year, they didn’t.

Congress was expected to include the delay measure in the spending bill that passed Thursday, but ignored it. A program that insures working-class kids was included, but not the hospital funding. If it’s not delayed, Georgia’s cut in the first year is expected to be $36 million, rising to $145 million in the 8th year.

Hospitals are already affected. Even if they have enough money in the bank to bide their time, it makes planning ahead hazardous.

“I don’t think anyone anticipated this,” said Monty Veazey, president of the Georgia Alliance of Community Hospitals. “We certainly didn’t. We all along thought they would reauthorize that and CHIP (the insurance program, the parent program for PeachCare).”

For that matter, Congress only extended the kids’ insurance program long after it expired, after states started dipping into reserves, and only as states like Alabama were sending out letters to parents that they were going to be cut off. And it only extended it temporarily, for three months.

The hospital funding is called Disproportionate Share Hospital, or DSH, for hospitals that treat a disproportionate share of the community’s indigent. The money generally comes in two yearly payments, and the first already came in short. The other is expected later in spring.

Veazey said the lawmakers know how critical the issue is. “They’re not misinformed. They know it’s real,” he said. “Because we made sure they know. It’s just like they’re saying, ‘To heck with you. Make sure they close.’

“So that’s what’s going to happen, you’re going to see closures.”

Several rural hospitals in Georgia have gone under and closed over the last 10 years.

Hospital officials interviewed Friday, while concerned, displayed a sort of inured amazement.

Alan Kent runs one such hospital in Vidalia, Meadows Regional Medical Center. It’s a 57 bed hospital, but linked to an array of clinics and medical offices that altogether employ about 1,000 people. Meadows Health is the largest employer in Toombs County. Meadows is the only place in the region that delivers babies, and provides 24-hour surgical care and cancer care. Kent doesn’t know why DSH wasn’t restored.

“For us and most rural hospitals DSH means the difference between us operating at a break even and having a substantial loss,” Kent said. He and his team have been planning out what to do if DSH is cut. For the moment they are fortunate: they have enough money to move around for a few months more, hoping the grants will be renewed full-strength by summer.

If not, there will be cuts. The cancer care may have to go.

“We’re not going to stop delivering babies, not going to stop doing surgery,” he said. “This is a seven-figure number.”

The hospital currently gets about $2 million a year in DSH money, and a percentage of that would be cut.

Grady Memorial Hospital’s senior vice president for governmental relations, Matt Hicks, said $11 million of the hospital’s $85 million DSH budget was on the chopping block for the first year of cuts. That will worsen in the following years.

“It inevitably will mean the reduction of services or programs,” he said. “$11 million is a lot of money to Grady. As long as 30 percent of our patient mix is uninsured, we have to have supplemental payments like DSH to make ends meet.”

In Macon, Dr. Ninfa Saunders met with her team Thursday to go over what to do. She figured out what kinds of services may have to go, but hasn’t yet chosen specific ones.

She didn’t want to name the possibilities to a reporter, for fear of alarming those employees.

“And it’s Christmastime,” she said.

Rural hospitals are not only medical lifesavers in a community but economic and social anchors. Closures often mean slower care in emergencies for nearby communities, and a death knell for recruiting business to the area.

The hospital officials couldn’t be sure why the DSH funding was put off til next year. They said they have hope it will pass in January. “Maybe the tax issue consumed all of their energy,” said Kent.

Others suggested that leaving DSH and other healthcare funding for next year might be to give Republicans bargaining chips against Democrats in next year’s budget talks.

“There’s a lot I don’t understand,” Hicks said. “But there are votes the Republicans need to be bipartisan.”

He said both Georgia’s U.S. Senators, Repubicans, had voiced support for DSH.

Republican Sen. David Perdue, Georgia’s junior senator, could not be reached for comment Friday afternoon.

A spokeswoman for Sen. Johnny Isakson, a Republican, said that “Senator Isakson is disappointed that DSH (cuts) were not delayed just like we are disappointed that the full five-year CHIP extension wasn’t included. Senator Isakson will continue working to ensure both are addressed in January.”

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