Massachusetts Hospitals Seek Financial Aid From State

More than 20 Massachusetts hospitals have filed emergency financial aid requests with the state's Medicaid department, stating that they will have to cut several "money-losing patient services" or, in some cases, even shut down if they do not receive assistance, the Boston Globe reports. The hospitals, which submitted their requests last week, are seeking a share of a $10 million "relief fund" established this year by the state Legislature for the purpose of assisting "distressed hospitals" at risk of "closing vital community services." The requests, according to the Globe, "provide a glimpse" into the financial condition of the most seriously struggling hospitals in the state," which have faced challenges in part because of low reimbursement from Medicare, Medicaid and HMOs. Beth Israel Deaconess Medical Center, for example, has asked for $990,000 to repair one of its health centers, which is overcrowded and has a leaking roof. Carney Hospital, which saw its losses increase by $1.8 million this year, said that without assistance, its "priority" would be to shut down psychiatric services and its "struggling" doctors group. And Good Samaritan Medical Center, which requested $5.5 million, said that "it will not be able to continue operating without a cash infusion during FY 2001."

Not Enough to Go Around
The total amount requested by the hospitals comes to at least $35 million, more than triple the amount allocated by the Legislature. This discrepancy is likely to set off a "tug-of-war over the relief money," the Globe reports, and legislators have begun advocating to the Medicaid department that their "hometown hospital" receive assistance. Medicaid Commissioner Wendy Warring said the prerequisites for assistance will be that a hospital "must show that they have a negative operating margin and insufficient cash flow" and "also must show evidence of actual or potential loss or reduction in critical community services, including those that serve Medicaid patients." She added the department will most likely not distribute funds "evenly across all of the hospitals that qualify," but instead will try "to get the most bang for our buck." But Andrew Dreyfus, executive vice president of the Massachusetts Hospital Association, said, "The need is so much greater than the funds available that it's going to be very hard to develop a criteria and distribution that feels fair. That is why we've argued that this is not the best solution for helping hospitals." The MHA favors "across-the-board" reimbursement rate increases for hospitals that care for poor patients because it estimates that "Medicaid pays for less than 80% of the actual cost of care," the Globe reports. State Sen. Mark Montigny (D) and Stuart Altman, a Brandeis University professor and member of Gov. Paul Celluci's (R) health care task force, said the criteria for giving money to hospitals should be that they are "unique because of their location or the population they serve." Altman added, "I don't think the plan here was to drop out bits and pieces to everyone, but to really decide which institutions and services are necessary for the community. But who knows? With the politics of this, it could work out differently" (Kowalczyk, Boston Globe, 12/13).