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Medicaid Expansion in Tennessee Vital for Blount Memorial
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MARYVILLE – Leaders at Blount Memorial Hospital are part of a large number of hospital systems throughout the state who are anxiously watching legislative activity in Nashville and advocating for Governor Bill Haslam to accept Medicaid expansion for Tennesseeans as part of his budget.

All across the nation, hospitals and health care providers who provide services to Medicare patients are experiencing reimbursement cuts, which is making it even more challenging to provide health care services to the people they serve, specifically the age 65 and older group drawing social security.

“The Affordable Care Act (ACA), which is law, is designed to take away funds from Medicare through cuts to health care providers and redistribute them by expanding Medicaid to the uninsured and underinsured,” says Blount Memorial Hospital CEO Don Heinemann. The current cuts for care provided to Medicare patients totals $5.6 billion over the next 10 years, but pending legislation could take that number as high as $7.4 billion. “These cuts have already begun,” Heinemann adds.

Breaking this down to local levels, Heinemann says Blount County will be impacted. “To Blount Memorial, alone, we will experience more than $70 million in federal cuts over the next 10 years. Those cuts will translate directly into a $70 million loss in jobs and economic impact to Blount County, and the impact of that same loss can be extrapolated to the entire state. Tennessee hospitals -- including ours -- are really going to struggle to function with the full scope of services and quality of care that communities have been used to, and when services have to be eliminated, it can have an impact on the number of jobs available and the ability for hospitals and health care organizations to remain operational.”

What hospital officials are waiting to learn, now, is whether or not Governor Bill Haslam will accept federal funds to expand Medicaid for the state of Tennessee. For the first three years, the federal government would pay the full cost of Medicaid expansion, and it’s at this point that the state can opt out of the expansion.

For the fourth through sixth years, the federal contribution drops to 95 percent, 94 percent and 93 percent, respectively. During the fourth, fifth and sixth years, the expansion is slated to cost Tennessee $199 million. After the sixth year, the federal government would begin providing 90 percent of the matching dollars, which is a much higher rate than the 65 percent currently provided for TennCare enrollees.

“The nation’s hospitals agreed to accept the Medicare cuts for expanded health insurance coverage to help reduce the number of uninsured patients in the United States, as well as the cost of their unreimbursed health care.” Heinemann says that in recent years, Blount Memorial’s cost of unreimbursed health care services has continued to climb -- most recently to $32.6 million 2011 alone. “Expansion of the Medicaid program is a step in the right direction -- and one that we need -- in helping our state’s hospitals remain operational and functioning for our communities,” he added.

Past chief of the medical staff and hospitalist Dr. Deaver Shattuck agrees. “Right now we’re taking care of sicker and sicker patients, and hospitals will experience a significant struggle to keep the same level of care and scope of services with cuts like this. Medicaid expansion is something that can help hospitals offset the Medicare cuts, prevent cutting services and from having to compromise the quality they are striving to provide.

“Right now, we have adequate resources, and without Medicaid expansion, we will have a lot fewer resources,” Shattuck says. “And this also comes at a time that if hospitals aren’t meeting certain quality standards and levels of care, they’re going to see additional financial cuts.” Shattuck says that Blount Memorial is more blessed, though, than some facilities in the state. “We have a medical staff and hospital staff that are incredibly dedicated to our community, and we’re going to do everything we can to avoid sacrificing quality for our patients. It’ll be the hospitals that don’t have that type of dedication and determination for patients’ health that we see struggle the most, and possibly even have to close their doors.”

Federal funds, if not accepted by Tennessee, will be reallocated to larger states such as New York and California. “We hope this doesn’t happen,” says Heinemann. “Expansion of the Medicaid program can significantly help to offset the large cuts the ACA has already imposed on us.”

If Tennessee makes the decision not to expand Medicaid and not accept federal funds, then Blount Memorial – and our community – will have to brace for changes, whether they are related to service availability, timeliness of health care or employment, which comes in at nearly 2,300 at Blount Memorial today.

“Our hospital provides economic benefit to the community, both directly and indirectly,” Heinemann says. “If the hospital has to accept an immediate $70 million loss with no additional revenues coming in, it means lost jobs and when jobs are lost, spending slows or stops in communities, and relocations become more frequent as affected workers try to find new jobs.”

Statewide, the Tennessee Hospital Association says with the Medicare cuts already in place and those that are pending, Tennessee stands to lose 90,000 jobs in a 10-year period, which is equal to the number of jobs lost in the height of the recession in the summer of 2009.

“Right now, we’re just waiting to see what happens in Nashville,” Heinemann says. “Most of the loss of federal dollars to Tennessee can be avoided by agreeing to expand Medicaid, as it offsets the reduction in federal Medicare funds flowing into the state through expanded Medicaid funds.”

Heinemann says that it’s a wait-and-see approach right now, but when the decision happens, “we’ll evaluate how the final decision affects us and we’ll enact plans that keep us here and with our doors open for this community.”

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