Virginia Hospitals Bend Over Backwards to Try to Bring Back Federal Health Care Dollars

by Lowell


With the 2016 Virginia General Assembly session slated to start in just a few weeks, one of the big issues yet again will be health care — a topic of much partisan discord the past few years in Virginia and nationally, as we are all well aware. On that note, earlier this week, the Virginia Hospital & Healthcare Association (VHHA) sent a letter to Gov. McAuliffe on “Reimbursing the Cost of Hospital and Health Care Services Provided to Virginians” (see here for the full VHHA Letter and also on the “flip”). The gist of the message in the truly extraordinary VHHA letter is as follows:

1) Virginia’s hospitals are doing a great job at patient care, but are hurting financially due to issues like “sequestration,” declining Medicaid reimbursement rates and to the fact that the hospitals “underwrite more than $1 billion in care for current and potential Medicaid patients;”
2) “Immediate action is needed to remediate these serious issues,” as Virginia’s “local hospitals and health systems simply cannot continue to absorb these reductions while simultaneously bearing a heavy portion of the state’s indigent care costs;”
3) The ideal solution would be for “Virginia to avail itself to the fullest extent possible of existing federal programs,” including “provision under the law through which the uninsured can obtain coverage” (aka, Medicaid expansion);
4) If that’s not possible, for whatever reason, then an “alternative method” the hospitals are proposing “involves having hospitals and other providers finance a portion of the required state match to access all available federal funds;” 
5) In other words, the VHHA is “fully prepared to engage in a process to develop an appropriate mechanism for Virgnia’s local hospitals and health systems to contribute the funds necessary to meet federal matching requirements and draw down additional federal funding to address the challenges outlined above;”
6) This is truly extraordinary, clearly something the hospitals would prefer not to do, but as they say, “the status quo is simply unsustainable” and it’s time to break the log-jam on this.

Of course, the sensible solution would simply be to expand Medicaid, period end. Clearly, though, Virginia Republicans have dug in their heels and don’t want to move ahead on this for ideological and political reasons (e.g., they don’t want to be primaried from their far right). Which might be why the VHHA is biting the bullet on something they’d clearly prefer not to do (and shouldn’t HAVE to do, if the state legislature would simply do its job…sigh).

All that said, it will be fascinating to see how Virginia Republicans respond to the VHHA, as the organization’s proposal seems to completely kick the legs out from under the Republicans’ main “argument” against expanding Medicaid (that supposedly the federal government might renege on its 90% share, or that even 10% is too much for the state to handle — even though this would unlock much MORE money that would flow back to Virginia). What the hospitals would be doing here is, essentially, taking on the financial responsibility that the state legislature has refused to assume. After this is taken care of, it’s hard to see any substantive argument for the General Assembly to say “no.” I mean, if the hospitals themselves want to assume the cost, risks, etc of shoring up their own finances and providing care to more Virginians, then who are the legislators to tell them not to do so?

Again, though, this is clearly not a done deal, even though it makes a huge amount of sense. However it works out – and for our state’s sake, let’s all hope it DOES work out – for now we owe a huge “thank you!” to the VHHA for taking such a strong leadership role, in many ways going beyond their comfort zone in doing so.

P.S. Also worth noting, by the way, is that other states with Republican legislatures – for instance, Indiana – have moved ahead in this fashion, and it’s worked out well.