June 8, 2023

Keeping Media and Government Accountable.

Advocates admit Medicaid expansion won’t save rural hospitals

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Pressed to consider the facts with emotion removed, even some strong advocates admit Medicaid expansion won’t save rural hospitals.  And that includes expansion’s leading advocate – Governor Laura Kelly.

Gov. Laura Kelly recently told a group of Republican lawmakers that she never said expansion would save rural hospitals.

“Just before the session, several of us met with her, and we were talking about the issue,” recalled Sen. Gene Suellentrop, a Wichita Republican. “One of the discussion points was, it’s not going to save rural hospitals. She said, ‘well, you never heard me say that.’ She made that statement. She knows as well. This is not going to save rural hospitals.”

In an April 27 column in the Kansas City Star, Kelly recalled the meeting similarly. She wrote that Republican leaders pointed out that expansion wouldn’t prevent rural hospitals from closure.

“It is true that rural hospitals face numerous challenges and expansion won’t solve all of them,” she wrote.

Her tune has changed since the campaign trail. Kelly implied that Ft. Scott and Independence would still have hospitals if lawmakers had expanded Medicaid. After Ft. Scott Community Hospital announced it would shutter, she wrote, “Sadly, it didn’t have to be this way.”

“…Simply put: if Kansas had expanded Medicaid, Fort Scott would still have a hospital.”

It appears some lawmakers believe expansion will be the cure for what ails rural hospitals. Rep. Doug Blex, an Independence Republican, first won election to the Kansas House in 2016. During his initial campaign, he told public radio he leaned against expanding Medicaid but was rethinking his position.

“Quite frankly, before the shock of the hospital hit me, I was leaning against it,” he told KMUW in September 2016. “…Farmers get federal subsidies, and if it takes a federal subsidy (to stabilize rural hospitals), and it’s not costing Kansans a lot of money, I’m leaning to probably support Medicaid expansion.”

But it will cost Kansans a lot of money.  The Kansas Health Institute says expansion will cost $521 million over the first ten years; that’s perhaps the minimum cost to the Kansas budget after federal reimbursement, as expansion states have seen costs far exceed estimtates.

Expansion doesn’t provide subsidies to rural hospitals. Instead, it gives able-bodied adults taxpayer-funded health insurance. The federal government picks up approximately 90 percent of the tab for expansion additions to KanCare, but just 59 percent of the cost for individuals, like the disabled, pregnant women and children, already eligible for KanCare.  Kansas Health Institute estimates about 90,000 adults would be covered by expansion and another 40,000 children who are already eligible will be added due to the push for new enrollees, and those kids will only generate the 59 percent cost reimbursement.

The National Rural Hospital Association points to cuts in Medicare reimbursement rates–not refusing Medicaid expansion–as a primary reason for flailing rural hospital bottom lines.

Blex voted in against expanding Medicaid this session but did Rep. Don Hineman, a Dighton Republican voted in favor of it. Hineman chairs the House Rural Revitalization Committee.

He says expansion is a priority for rural Kansas, though he admits expansion will not solve all the problems with rural healthcare.

“I view it as a lifeline to medical care delivery in rural Kansas,” he said. “Rural healthcare needs to reinvent itself to provide adequate healthcare to the rural population, but that can’t happen overnight.”

It may not be enough to save the hospital in Lane County, where Dighton is located.

According to a study commissioned by the Kansas Department of Health and Environment, Lane County Hospital would have received a little more than $35,000 in Medicaid reimbursements in 2018 had the state expanded the program. The hospital boasts 25 beds in a county of a little more than 1,500 people.

According to a 2018 hospital assessment, 23 percent of Lane County residents are over the age of 65, and therefore eligible for Medicare. About 12 percent of the population is under the age of 65 and doesn’t have health insurance.

Hineman admits that Medicaid expansion will be a boon to urban hospitals. The University of Kansas Medical Center in Kansas City will be the big winner should Kansas expand Obamacare. The KDHE-commissioned study estimates the hospital would have received $52 million in government funds through the program in 2018. Via Christi Hospital in Wichita would have received more than $29 million.

Hineman says if Kansas expands Medicaid, rural hospitals will need to use the time to reinvent themselves. Like the Lane County Hospital built in 1959, most rural hospitals were built in the 1950s.

“Those hospitals aren’t appropriate anymore,” Hineman says. “They need to be reconfigured as some other model of healthcare delivery where they’re the first responders in the community.”

Urban hospitals will benefit more from Medicaid expansion than rural ones, but some policymakers are just beginning to admit it will not save rural hospitals.

Medicaid expansion isn’t the best way to accomplish the things expansion proponents’ goals of saving rural hospitals or helping people get or stay healthy, according to Rep. Brenda Landwehr. The Wichita Republican and chair of the House Health and Human Services Committee, hosted a lengthy roundtable discussion about expansion in early March.

“The answer to rural hospitals is to get the feds to provide a new definition of rural hospitals,” she said. “That’s how you change rural hospitals.”

Currently, hospitals deemed Critical Access Hospitals see slightly better reimbursement rates. Congress created the CAH designation in 1997 as a way to help rural hospitals. One of the requirements to earn the designation is maintaining an annual average length of stay of 96 hours or less for acute care patients. They can’t have more than 25 beds, and they must be at least 35 miles from another hospital.

Hineman says rural hospitals don’t have time to wait on the federal bureaucracy to make changes. Expansion buys them some time.

That’s always a lengthy battle to work out reimbursement rates and coding and so-forth,” he said. “That can’t happen overnight.”

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