Greenwood Commonwealth. September 23, 2023.

Editorial: Reeves Recycles Medicaid Plan

It’s taken a while for Gov. Tate Reeves to fully recognize that Mississippi has a hospital crisis, particularly in its rural areas.

But the challenge from Brandon Presley, and the constant hammering from the Democrat on Reeves’ muleheaded opposition to Medicaid expansion, has apparently gotten the incumbent’s attention, so much so that Reeves rolled out Thursday his own plan to increase Medicaid payments to hospitals.

It may be generous to call it “Reeves’ plan,” as it borrows heavily from proposals advanced a year ago by Republican legislative leaders and the Mississippi Hospital Association that Reeves’ own Medicaid Division pooh-poohed.

What changed? Why is this idea — of increasing hospital “bed taxes” in order to draw down more federal Medicaid supplement dollars — suddenly so brilliant, less than seven weeks from Election Day?

Clearly politics is at play, both in the timing of the release of Reeves’ plan and the knee-jerk reaction of Presley and his supporters to harshly criticize it.

Politics aside, does the plan have merit? Will it produce the hundreds of millions of dollars annually for struggling hospitals that the governor and his team claim? Is it a superior route to reducing the burden of uncompensated and undercompensated care than Medicaid expansion would be?

You would have to get into the weeds of the complicated Medicaid formulas to answer some of that — a maze that we don’t claim to understand, nor do many even in the health-care field.

The governor released Thursday the summary of his team’s calculations. The numbers were eye-popping. Even after the additional bed taxes, Mississippi hospitals would net an extra $689 million a year from two Medicaid supplement plans. Greenwood Leflore Hospital alone would supposedly net almost $10.3 million — enough to cover about 60% of its current operating losses. That may be more relief than it would get from Medicaid expansion.

What wasn’t released, though, are all the calculations, including the assumptions that were used, to produce those eye-popping numbers.

A big part of the equation is asking the federal government to allow some reimbursements to be based on the rate at which private insurers pay rather than Medicaid’s well-below-cost model. A year ago, the Division of Medicaid said that approach would only produce about $40 million a year in additional Medicaid payments because the state’s rate on commercial insurance payments is so low. When Medicaid Director Drew Snyder was asked at Thursday’s press conference to explain how the net benefit to hospitals jumped by more than 15-fold in a year, he provided a non-explanation: “We got the right people in the room.”

That answer alone should make one suspicious. Our guess is that the Medicaid number-crunchers used a couple of computation models, one on the low end, one on the high end. Last year, they opted for the conservative estimate, this year the optimistic one. It will be months down the line, well past the election, before we know which estimate is more accurate — that’s if Mississippi can get the federal Centers for Medicare and Medicaid Services to sign off on the reimbursement changes.

Let’s assume, though, that the waivers are granted and the optimistic math is correct. The resulting increase in revenue might not be a lifesaver to the hospitals in the greatest financial distress, but it certainly would put them much closer to remaining solvent.

What Reeves’ plan doesn’t do, though, is help the 200,000 to 300,000 mostly working Mississippians who would be covered by Medicaid expansion. They’d still be uninsured, medically underserved and one major health crisis away from financial disaster.

END