Health District administrator Lyman Duncan reports that the federal government reimburses each state for 75 percent of the Medicaid billing. However, the state reimburses just 58 percent of the total billing to rural hospitals. Duncan says that the rural hospitals seek the unpaid portion of the federal reimbursement.
“For every $1,000 in billable expenses to Medicaid, the state is paid $750 by the federal government, but we are being paid just $580 by the state,” said Duncan.
He added that the state has paid the $580 for a number of years and then had an end-of-year adjustment for the remaining balance. Duncan said that this year, as governments face tightening budgets, the state suggested that there would be no end-of-year adjustment.
Duncan said rural hospitals generally have more Medicaid patients than hospitals in urban areas. As a result, the decrease reimbursement rate for Medicaid billing has a bigger impact in rural areas.
San Juan Hospital, which is operated by the San Juan Health Service District, has the highest percent of Medicaid patients of any hospital in the state.
The hospital came out of the slow summer season with a positive net income for the year. While business has increased in recent months, the standard delay in reimbursement has created a cash crisis. Duncan reports that the hospital is solvent and able to pay its bills under the current reimbursement rate, but an increase in the reimbursement rate would be a tremendous help.
Duncan also mentioned that the hospital has provided approximately $300,000 in charitable care so far in 2008. The amount of charitable care could increase during an economic downturn.
In other health care news, officials plan to announce a new chief operating officer for the district. Duncan has served as the acting CEO since the departure of Craig Preston in October.