Editors note: A previous version of the piece incorrectly stated that Allegiance Health in Jackson is part of the University of Michigan Health System. The piece has been changed to reflect Allegiance Health’s acquisition by the Henry Ford Health System.
Washington pundits expect House Republicans to introduce legislation to repeal and replace the Affordable Care Act following their recess this week. In leaked documents obtained by POLITICO, it appears that this legislation will roll back Medicaid spending, which in Michigan covers over one million low-income families or families with members that are physically-disabled who otherwise couldn’t afford healthcare.
The Medicaid portion of the health-care debate is sure to be contentious and partisan, but while Congress debates the issue it shouldn’t forget about small communities like Hillsdale County, where almost 26 percent of the community receives some sort of Medicaid benefits. Any changes to Medicaid spending will affect not only the entitlement recipients, but also their health-care providers by forcing them to learn a new entitlement reimbursement system. Larger health-care systems can accommodate these changes, while smaller providers struggle to keep up with the changes, often forcing them to consolidate with larger health systems.
The Medicaid reimbursement system is a mess and Congress can reduce the strain of the second major-overhaul of Medicaid in the past 10 years by simplifying the Medicaid reimbursement process for health-care providers.
Health-care consolidation decreases the quality of care for smaller communities like Hillsdale, tying formerly independent health-care providers to larger, centralized health-care systems that are far removed from the communities they’re serving. While Hillsdale Hospital remains independent, Ruthanne Sudderth at the Michigan Health and Hospital Association said there is evidence to suggest that the ACA going into effect in March 2010 stimulated this consolidation trend.
According to Hillsdale Hospital’s Organizational and Business Development Director, Jeremiah Hodshire, the changes to Medicaid and health-care policy over the past 10 years have made it increasingly difficult for small hospitals to stay independent. Within the past five years, both the Community Health Center of Branch County and Monroe’s Mercy Memorial Hospital System were purchased by ProMedica Health Systems of Toledo and Jackson Allegiance Health was acquired by the Henry Ford Health System.
“Our sustainability in the future is about local people using us — not thinking since they go to the University of Michigan or that they go to a larger health system that they’re going to be better,” Hodshire said. “In fact, that’s not true. Our quality scores are greater, our outcomes are better.”
In Hillsdale County, 2,800 additional people received coverage under the Medicaid expansion that went into effect after the state enacted the federally-funded Healthy Michigan Plan in 2014, according to the Michigan Health and Hospital Association. Any changes to Medicaid at the federal level will not only affect these 2,800 individuals, but will also affect health-care facilities such as Hillsdale Hospital, which receives 60 to 70 percent of its income comes from Medicare and Medicaid recipients.
“What Washington and Lansing do to reform health-care or to change it has a significant impact on our operations and if we’ll be around,” Hodshire said. “When we say we’re not for profit, we go beyond that — there’s no profit at all and we operate on almost no margins.”
If Congress slashes Medicaid without measures to simplify the rules and regulations surrounding the government’s reimbursement payments to health-care facilities, it will be difficult for small hospitals like Hillsdale Hospital to take on the expense of complying with yet another Medicaid payment structure re-write.
Receiving reimbursements from the government is so complicated that it takes a knowledge of thousands of reimbursement codes and requires staff whose only job is to get the health-care facility reimbursed for the care they provide to patients. File a claim wrong and the facility doesn’t get paid.
At Hillsdale Hospital, a portion of a $45,000 grant it received from the state will pay for a “Medicare boot camp” which provides training to staff on how to handle Medicare and Medicaid claims. This is before any further changes to federal health-care law.
“In their ignorance, they passed [the ACA], which unfortunately has left on the shoulders of small hospitals to try and figure out, ‘what do we do now,’” Hodshire said. “It’s convoluted at best.”
Simplifying the claims process would be a start in reforming the entitlement and would save health-care providers a significant amount of money without requiring any cuts to staff or services. These savings could then be passed onto patients through less expensive hospital visits.
Health-care isn’t a right, but with many small communities like Hillsdale County where a quarter of the population is on some form of Medicaid, any changes to Medicaid spending could result in loss of coverage for citizens and increased compliance costs for health-care providers.
“It’s tough business right now; health-care is very difficult to navigate,” Hodshire said. “The ever-changing landscape of the bureaucracy of the federal government is a job in itself.”
Mr. Carter is a senior studying politics and journalism.