The leader of a trade group for California public hospitals cautioned the Kern County Board of Supervisors Monday to keep an eye on how the expansion of Medicaid will impact public hospitals.
Those hospitals, like Kern Medical Center, and counties may have to help foot the bill and still have to cover many indigent residents.
One way the Affordable Care Act expands health care coverage is by giving more people access to Medicaid, a public insurance program for the poor. California has already expanded coverage to a little more than half a million people through the Low Income Health Program, which is a bridge to reform, Melissa Stafford Jones, president and CEO of the California Association of Public Hospitals and Health Systems, told supervisors at Monday's meeting.
Expanding Medicaid is optional for states but for those that chose to participate, the federal government will pay 100 percent of costs for these newly eligible enrollees for three years. After 2016, the amount the federal government pays will taper off, eventually decreasing to a 90 percent match with states picking up 10 percent of the costs, Stafford Jones said.
That's much more than the 50 percent match the federal government pays for other Medi-Cal enrollees, she said.
Stafford Jones said the state legislature seems to be moving quickly on the issue, with bills that allow for the expansion of Medi-Cal to people with incomes at 138 percent of the federal poverty level progressing in the Assembly and the Senate. However, the bills address expansion but not financing, issues that Gov. Jerry Brown's budget indicated he would like to see go hand-in-hand, she said.
The governor's budget also seemed to suggest that counties and public hospital systems should help pay to implement health care reform by returning a portion of the funding they get for indigent care to the state, Stafford Jones said. An amount hasn't been specified.
But Stafford Jones also cited a report that estimated 3 to 4 million Californians will remain uninsured after health care reform rolls out and noted that public hospitals will still have to provide care to those folks.
"We are very concerned about the state potentially prematurely taking realignment funds from counties before it can be demonstrated that there's a financial benefit to counties and public hospital systems," she said.
Other issues public hospitals will have to face include how quickly newly eligible people sign up for Medi-Cal -- affecting the payer mix -- and increasing competition for their business, Stafford Jones said.
Another big question is whether California will kick-off Medi-Cal expansion at the first of the year. Stafford Jones said there is some concern that it might be delayed, meaning the state could not take advantage of the 100 percent federal match for the full three years.
"The whole question of do we go January 1st (with Medi-Cal expansion) I think has a lot of ramifications for the county," KMC CEO Paul Hensler told the board.
The meeting also focused on how Medicaid payments filtered to KMC through the state are doled out and how that relates to the county's outstanding, multi-million dollar loan to the hospital.
Nancy Kaatz, vice president of Public Hospital Services for Toyon Associates Inc., addressed the board on how payments are made from various programs. KMC Hospital Controller Bob Bainbridge said all together, the hospital is owed about $68 million dating back to 2011 through the different programs.
Supervisor David Couch asked if there was any paperwork or deadlines the hospital had missed. KMC administers said there weren't.
"Most of these (payments) are either current or held up not because of a hospital that hasn't put in the paperwork, but because there is a calculation period that needs to be met," Bainbridge said.
Couch asked Hensler to explain how the Affordable Care Act will help KMC pay off the balance of its more than $90 million loan from the county.
"Take a longer stab at that with some sort of a memo so I have a better grasp of how you're going to get from 90 something (million dollars) to zero. How the Affordable Care Act's going to play into that, how it's going to help pay off all the elements?" Couch said.
Supervisor Zack Scrivner requested that Hensler make the report at one of the board's televised Tuesday meetings "so our public at large can have a better understanding of how we're going to get to zero if we're going to be able to do so."