Hospital bills could go unpaid if states opt out of Medicaid

Posted on July 10, 2012

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If states opt out of Medicaid expansion, hospitals could be stuck with the poorest patients and with no one to foot the bill, The Washington Post blog reported.

Since the Supreme Court ruling, states, including South Carolina, Louisiana, Florida, Iowa, Mississippi and Texas, have spoken out, vowing to pass on Medicaid expansion. One of the key provisions under health reform gives states the option to take advantage or forgo expanding the federal state program to people earning less than 133 percent of the poverty line.

“We are not going to jam more South Carolinians into a broken program, a program that stifles innovation, discourages personal responsibility, and encourages fraud, abuse and overuse of services — and that, by the way, costs us billions of dollars,” Tony Keck, South Carolina’s head of the Health & Human Services Department told Bloomberg Businessweek.

Keck continued, “If we’re going to talk at all about targeting the uninsured, it has to be with a completely different system than Medicaid.”

However, without more residents on Medicaid, hospitals will suffer, Allan Stalvey, senior vice president of advocacy and communications for the South Carolina Hospital Association, said in the article.

Nationally, hospitals provided $39.3 billion in uncompensated care during 2010–15 percent higher than three years earlier, according to the American Hospital Association. Compounded with reduced reimbursements, hospitals could be on the hook for more uncompensated care. Disproportionate Share Payments–Medicaid dollars for hospitals that provide a higher level of uncompensated care–which totaled $11.3 billion in 2011, will be largely phased out by 2020 under the Affordable Care Act, The Washington Post reported in another blog post.

Nevertheless, when hospitals and states without Medicaid expansion find themselves with unpaid bills, red states may eventually agree to opt in.

“At the end of the day — and maybe the end of the day is after the November election — I think all or virtually all of the states will agree to participate,” Ron Pollack, executive director of Families USA, a Washington nonprofit, said in the Bloomberg article. “It is truly fiscal malpractice for them to turn it down.”

For more information:
– see the Bloomberg article
– here’s the Washington Post blog post on uncompensated care and the post on DSH payments

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