Mississippi hospitals, stretched thin by revenue loss from weeks of delayed treatment to protect the health care system from the coronavirus, are receiving an infusion of cash from the state.
The state’s Medicaid department will dole out a total of $160 million to Mississippi hospitals over the first two weeks of May. This money is separate from the CARES Act’s $100 billion that was slated for hospitals across the country in the form of emergency funds.
“The impact on hospitals is immediate,” said Drew Snyder, director of Mississippi Division of Medicaid. “Coupled with the federal funds hospitals have gotten directly from Washington, these advances should help sustain them in slow months until utilization recovers.”
COVID-19 has hit Mississippi hospitals hard, and not just because of their expensive, intensive treatments against the disease and the preparations needed to mitigate the spread. Mississippi hospitals were struggling before the pandemic, with five closing since 2013, and nearly half of the state’s rural hospitals at high financial risk.
Canceling elective and non-urgent procedures placed most hospitals’ revenue collections at a standstill, evaporating profit margins and depleting cash reserves. The state’s largest hospital, the University of Mississippi Medical Center, projected in late April that the hospital system will be $100 million in the red by the fall due to delayed elective care, revenue loss and the additional expenses needed to bulk up care during the pandemic.
More than half of Mississippi hospitals reported negative net income in 2017, meaning 55 out of the 100 hospitals reporting data spent more than they earned — mostly due to the cost of uncompensated care, according to Mississippi Today’s analysis of the most recent data available from the Centers for Medicare and Medicaid.
The cash infusion from the state is coming sooner than expected. In the form of advance payments, the funds should help stabilize hospitals to carry them through the pandemic’s effects, Snyder said, and were the most efficient way for the agency to respond to hospitals’ needs without statutory changes or taxpayer obligation.
For larger systems like UMMC that are starting to open back up for non-urgent care, the COVID burden is not yet letting up. Over the last week, about 630 patients a day are still hospitalized with confirmed or suspected COVID across the state — down only slightly from the week prior. Hospital officials said that weighing the resumption of procedures with the public health risks as the virus continues to spread is a tough decision.
“We at UMMC and statewide, we’re still kind of in the incline of that, we’re on an up-slope,” Dr. Alan Jones, head of emergency department for UMMC said on April 30. “We’re certainly super nervous about the state opening up more because we think it will lead to increased activity at the hospitals. I think if you talk to any public health official, and say, ‘Are you nervous about relaxing all this stuff, and do you think it’s going to cause an increase in cases and hospital use and potentially an increase in overall hospital resources?’ — they’re going to say yes to all that.”
Nationally, the American Hospital Association estimates that the four-month losses associated to COVID-19 care and preparations will cost $51 billion per month, totaling $203 billion in losses from March to June. American Federation of Teachers, which also represents health care workers, told NPR that it has identified at least 200 hospitals across the U.S. that have cut worker hours during the pandemic, on top of the 1.4 million health care workers who were laid off during April according to federal data.
Mississippi Medicaid’s advance payments have come in two waves over the first half of May — $92 million in Mississippi Hospital Access Payments on May 1, and $66 million in Disproportionate Share Hospital (hospitals that treat more under-insured or uninsured people) by May 14.
In total, 98 hospitals will get about $158 million by mid-May, with almost $100 million of those funds slotted for 10 of the biggest hospitals across the state. Sixty-one million dollars will go to the state’s only Level 1 and 2 trauma hospitals (UMMC as a Level 1, and Forrest General, Gulfport Memorial and North Mississippi Medical Center in Tupelo as Level 2s). These four hospitals, along with Jackson’s St. Dominic’s, have the highest operating budgets in the state — the only systems operating above $400 million yearly, according to 2017 cost reports.
In Mississippi, 22 hospitals — half of which are rural — reported negative cash reserves in 2017, summing nearly $26 million in the red. More than half of Mississippi hospitals, 56, reported not having enough cash on hand to cover a month’s worth of health care workers’ salaries. Both research and anecdotes point to the effect that Medicaid expansion under the Affordable Care Act could have on stabilizing hospitals’ cash rolls, but the state has declined to do so.
The first round of the separate federal funds, which Mississippi hospitals should have received by late April, were based on hospitals’ previous reimbursements from Medicare’s seniors insurance programs, not according to their coronavirus patient rolls. Based on that payment model, Mississippi should get about $166,000 per COVID-19 case from the first round of funds, a little less than the $175,000 national average.
The remaining rounds of federal funding are more targeted toward COVID burden, both by volume and for providers treating uninsured patients, some of which hospitals have to apply for. Gulfport Memorial was the only Mississippi hospital to receive federal funds for treating 100 or more COVID patients before April 10. They received $15 million. Nearly 300 rural Mississippi providers are seeing direct payments to offset resource strain, totaling $317 million.
The Mississippi Hospital Association asked the state in early April for help leveling cash flow during unprecedented cuts to non-urgent care, and with that, revenue.
“Recently, Medicaid announced that it would combine the supplemental payments that hospitals traditionally receive in May and June into payments in May,” Richard Roberson, MHA vice president for policy and state advocacy told Mississippi Today. “These payments are funded by hospital taxes paid to the Division of Medicaid at no additional cost to the state or its taxpayers.”