Kansas Hospitals Renew Pitch to Expand Medicaid Amid Mounting Losses

The problem in Kansas is the same as other states without Medicaid expansion: the ACA envisioned universal coverage, and funds to treat the uninsured are dwindling because it was expected that patients who are now in a "gap" would have insurance.

The US Supreme Court ruling that let states decide whether to expand Medicaid under the Affordable Care Act (ACA) has not only created “haves” and “have nots” among consumers—it’s doing the same among hospitals. And in some states, the bleeding has reached a crisis point for the “have nots.”

Hospitals in states without Medicaid expansion must still treat anyone who walks in their doors, but they lose money each time they treat that band of uninsured in the “gap,” patients who are too poor for coverage on the exchanges, and with too much income for traditional Medicaid.

Kansas is among the states where hospitals are seeing losses mount, and hospitals there have renewed their call for Governor Sam Brownback and state legislators to rethink Medicaid expansion—or facilities will face shutdown.

A report this week said Via Christi Hospital in Wichita is losing $14 million a year because of Brownback’s position, and so far in the fiscal year that started July 1 it’s already $3.3 million behind on its budget. And, officials said, the hospital is losing money even though it has cut its employee count by 110 over the past 18 months.

A group of hospitals that includes Via Christi, the University of Kansas Hospital, St. Luke’s Health System, and Wesley Healthcare has scheduled an educational meeting for lawmakers for November 3, 2015. Statewide trade group including the Kansas Hospital Association will also participate.

An association spokeswoman said expanding Medicaid, known as KanCare, would increase patient access to care and protect jobs. Data reported in April project that as many as 15 Kansas hospitals face financial difficulty because of the decision not to expand Medicaid. One hospital has already announced plans to close.

The challenge in Kansas is similar to that in 18 other non-expansion states: as written, the ACA envisioned universal expansion, and it assumed that as more of the uninsured gained coverage the federal government could spend less subsidizing hospitals to take care of the uninsured. So as those dollars go away, hospitals in non-expansion states are feeling squeezed. Showdowns over the continuation of special financing arrangements in Florida and Texas have occurred as CMS has tried to compel Medicaid expansion, to no avail.

The Kansas Hospital Association released figures that said lower reimbursement rates have cost hospitals $137 million, but the amount would have been just $9 million if Kansas had expanded Medicaid. And, based on patterns in other states, it’s hard to say exactly how many families would enroll under Medicaid expansion, because in most states the number exceeded projections.

Jeff Korsmo, CEO of Via Christi Health, put the blame squarely on elected officials in a statement to the Kansas Health Institute: “Our financial pressures have been intensified because of the refusal of Governor Sam Brownback and the Kansas State Legislature to approve expanding the KanCare Medicaid insurance program for the poor and vulnerable.”