HMC joins lawsuit over Medicaid reimbursements

Date: 12/8/2009

By G. Michael Dobbs

Managing Editor



HOLYOKE -- Holyoke Medical Center (HMC) President Hank Porten sees the step of suing the state to receive reimbursement for healthcare services to the poor as a last resort after years of trying to motivate state officials to address the issue.

HMC is joining Berkshire Medical Center in Pittsfield, Signature Healthcare Brockton Hospital in Brockton, Cape Cod Hospital in Hyannis, Merrimack Valley Hospital in Haverhill and Quincy Medical Center in Quincy in the lawsuit that was filed Dec. 1.

"We've been talking with the state administration for several years to get resolution for this problem," he said.

The hospitals involved in the lawsuit provide care for more than 1.5 million patients and handle more than 300,000 emergency care visits annually. The three-year shortfall between the hospitals' costs and Medicaid revenue is in excess of $70 million. HMC's share of that sun is $6.5 million.

At HMC, about 230,000 patients come there annually seeking care and the hospital handles 41,000 emergency room visits.

All of the hospitals are classified as "disproportionate share hospitals" at which at least 63 percent of their patients served are covered by public insurance. The rate at HMC is 71 percent and the lawsuit addresses the level of funding the hospitals receive through Medicaid reimbursements.

Porten explained to Reminder Publications the Medicaid reimbursements do not actually provide the hospitals with the costs of the services, creating deficit situations. At this time the Medicaid payments only cover 80 percent of the costs of care.

The lawsuit hopes to show the state has violated a law requiring financial reimbursement equal to the costs of providing care to Medicaid recipients and the state has set Medicare, Medicaid and other reimbursement rates so low that many of hospitals are facing severe financial distress as they fulfill their state mandate to care for more and more individuals covered by public insurance.

He said that in a community such as Holyoke with a high rate of poverty, HMC couldn't rely on the greater payments made through the private insurance plans of wealthier patients unlike some other local medical facilities. He said the patients whose care isn't being paid for by Medicaid are on insurance plans with managed care that also pay at Medicaid rates.

Porten said that while Massachusetts has been seen as a national leader in its attempt to address the health insurance crisis by mandating residents have coverage, he charged the state's Commonwealth Care was under-funded from the beginning. He called the state's plan "a grand goal."

"If they don't fund the goal, they start to have problems," he added.

Commonwealth Care reimburses hospitals at rates lower than Medicaid, he explained.

Porten praised State Sen. Michael Knapik and State Rep. Michael Kane, as well as House and Senate leadership, as having been "very supportive" of HMC's efforts to address the problem. He also said administrators at the state Department of Health and Human Services have also been "attentive" and has noted HMC for "being a good partner who has kept costs low."

At this time, though Porten said, "I don't think they [the department] know the answer."

Athough the state has a grant program that does award hospitals with funding to help close the Medicaid gap, Porten said that system is not what the hospitals need.

"We need a plan to be looked at, evaluated and discussed," he said. "We want to be good partners [with the state]."

"Personally, I hope we can get together with the Legislature and find a solution," he added.