West Virginia hospitals see uncompensated care drop after Medicaid expansion, group says

Ruby Memorial Hospital photo by Antonio Pizzi via Google.

West Virginia hospitals are savings millions annually thanks to declines in uncompensated care due to Medicaid expansion, according to figures released by advocacy group West Virginians for Affordable Health Care.

Roughly two dozen hospitals saved a total of more than $265 million from 2013 to 2014 -- a 47 percent reduction -- and some of the figures for individual hospitals are significant, according to data compiled by Perry Bryant, founder and former director of the group, based on West Virginia Health Care Authority reports. West Virginia University Hospitals saw a drop in uncompensated care of more than 54 percent, saving about $51 million over that span, while Charleston Area Medical Center saved more than $64 million for a 47 percent drop. Percentage-wise, Logan Regional Medical Center saved the most, at 65.3 percent, for a total of about $11.5 million.

[Also: Nonprofit, for-profit hospitals in California show same uncompensated care costs]

"We've been very successful in the Medicaid expansion in West Virginia," Bryant said. "I think that's the primary reason for that drop. We've enrolled about 170,000 West Virginians into the Medicaid expansion; originally we projected we'd have 133,000 in total eligible, and we blew that away. … By any estimation, we've done a fabulous job of enrolling people."

Bryant said the insurance marketplace has also had some influence on insured rates and uncompensated care, as well as the ability of younger adults to stay on their parents' insurance.

West Virginians for Affordable Health Care had some specific recommendations to the state's Office of the Insurance Commissioner on how best to use those savings. Primarily, the group wanted to moderate rate increases for commercial payers, but Bryant said that suggestion was met with "zero interest."

So instead, the advocacy group recommended investing those funds in community health programs.

"West Virginia has high incidents of smoking and other tobacco use," said Bryant. "We're number one or two in the country in terms of obesity, and our rates of substance abuse are the highest in the country."

However, Joe Letnaunchyn, president and CEO of the West Virginia Hospital Association, said in an email that the decline in uncompensated care doesn't translate into savings.

He said that in 2010, upon passage of the Affordable Care Act, hospitals began the advance funding of Medicaid expansion through significant payment cuts for treating Medicare patients -- cuts that were built into the ACA as a way to cover the cost of Medicaid expansion.

[Also: Uncompensated care costs shrink under Obamacare]

In West Virginia, he said, more than 70 percent of patients that hospitals treat are covered by either Medicaid, Medicare or another government-funded program. But the payment rates to hospitals for caring for those patients is below the actual cost of care.

"The initial 10-year impact of the ACA cuts in West Virginia hospital Medicare payments was an estimated $1.3 billion," said Letnaunchyn. "Since then, that estimate has increased annually as additional hospital payment cuts were approved by Congress. Currently, Medicare reimburses below cost, so any additional benefit of Medicaid expansion has been offset by losses experienced on the Medicare side. In fact, Medicare on average reimburses only 88 cents of every dollar in costs of treating Medicare patients."

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That, in combination with economic, demographic, and regulatory considerations, means the landscape "is still undefined," he said.

Letnaunchyn added that West Virginia hospitals are already engaged in a number of programs to battle tobacco use, obesity and substance abuse.

Bryant disputed Letnaunchyn's figures, maintaining the Medicare cuts don't equal the savings generated through uncompensated care declines. He said his group expects further declines as years progress, unless the ACA is repealed or significantly altered.

Twitter: @JELagasse