Massachusetts Hospitals Will Have To Pay Up to $85M More for Uncompensated Care in Response to Medicaid Cuts

Massachusetts Division of Administration and Finance officials have told the state's hospitals they will have to spend an additional $60 million to $85 million to cover the cost of indigent care, after the state cuts Medicaid coverage for 50,000 low-income state residents, the Boston Herald reports (Heldt Powell, Boston Herald, 10/1). The state House and Senate on July 19 approved a budget that will reduce funding for MassHealth, the state's Medicaid program, by $54 million. The 50,000 people who will lose coverage are enrolled in MassHealth Basic, which provides health insurance to long-term unemployed individuals earning approximately $3,500 annually (Kaiser Daily Health Policy Report, 7/22). After the cuts take effect April 1, 2003, many of the people who lose Medicaid benefits are expected to visit emergency rooms for care, the Herald reports. Massachusetts hospitals are reimbursed for indigent care by an uncompensated care pool made up of funding from the state, insurers and hospitals. Hospitals are reimbursed based on the amount of free care they provide and pay into the pool based on the number of privately insured patients they treat. Unlike contributions from insurers and the state, uncompensated care pool funds paid by hospitals are not capped, the Herald reports. According to Ron Hollander, president of the Massachusetts Hospital Association, many hospitals are already "struggling" financially and the added burden of paying for extra free care could put them "further behind." The pool is expected to have a shortfall of $200 million next year, the Herald reports. "The pool is one of the best safety nets in the country and we're jeopardizing it. The patients will get squeezed eventually," Robert Restuccia, executive director of Health Care for All, said (Boston Herald, 10/1).