Via Wiki­media Commons

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.