Children's Hospitals and Clinics

The Governor, Senate and House are all proposing cuts to Medical Assistance in an effort to fix the state's budget problems. Medical Assistance is Minnesota’s Medicaid program that serves roughly 480,000 low-income families with children, senior citizens and the disabled. Termed "a one-year delay in Medicaid rebasing," it basically means that the $77 million that was scheduled to be paid to hospitals this year will not be paid out afterall.

At first glance, the proposal seems fiscally sound: hospitals that serve individuals on Medical Assistance will simply need to wait a year before they are paid for services rendered. But most capitol insiders agree the state's financial position will not look much better next year, an outlook that doesn't bode well for hospitals hoping to be reimbursed.

A more personal look at the proposal reveals the negative impact that minimal and delayed reimbursements have on those who depend on Medical Assistance to obtain quality healthcare. A fear of those on assistance is that hospitals might begin rejecting Medical Assistance; while the idea seems almost immoral, it is already prevalent in the field of dentistry.

Families on assistance are hard-pressed to find dentists that will accept Medical Assistance; a problem exacerbated for rural families who have even fewer choices near their home. If one is lucky, they might be seen by a reputable dentist who has an opening (by law, dentists cannot reject patients on assistance until they meet a 10% threshold); but often, families are subjected to professionals with little experience, or who graduated in the bottom of their class, or who otherwise are "forced" to accept Medical Assistance to pay their bills.

Those on assistance experience a significant amount of embarrassment, sometimes at the hand of dentists and receptionists who know they aren't going to make much on this particular patient, as well as frustration that they have little choice but to return to these offices. And while some cynics out there shrug and say, "Who Cares?" keep in mind that many of these clients are children, and these children are rejected by the best dentists because medical assistance doesn't pay nearly enough in the eyes of practitioners to warrant service.

The Omnibus Supplemental Budget Bill (SF 3813, see article 20, sections 10-11) impacts hospitals that serve large numbers of clients on assistance. Of the estimated 140 hospitals in the state, only a handful of hospitals shoulder a vast majority of the proposed $77 million cut. For example, Children's Hospitals and Clinics treat patients from across the state without question, and as a result 35-40% of their patients are on assistance. This delay in payments will cost Children's Hospitals $13.6 million, or approximately 20% of the total proposed cut. Other hospitals that serve high numbers on assistance are Gillette, Regions and HCMC.

Providers will need to take steps to recoup their losses, perhaps in the area of salaries (translation: they can't afford the best doctors), or when negotiating health plan contracts (translation: higher costs passed on to those with private insurance. Although there hasn't been any of talk of it at the capitol, those on Medical Asssitance are concerned that doctors, like dentists, might begin rejecting them as well.

But to date, hospitals are commited to helping all who come through their doors, regardless of the 20% benchmark statute. The Omnibus Supplemental Budget Bill Conference Committee has to make cuts somewhere, but it doesn't seem right to start by punishing hospitals financially for helping the highest numbers of patients on assistance.

Omnibus Supplemental Budget Bill Conference Committee

House: Chair Carlson, M. Murphy, Wagenius, Rukavina, Ozment
Senate: Chair Cohen, Tomassoni, Frederickson, Betzold, Higgins