AZ hospitals warn state on slashing Medicaid rolls

Say move could spur major layoffs, force St. Mary's to close
2011-03-30T00:00:00Z AZ hospitals warn state on slashing Medicaid rollsRhonda Bodfield and Stephanie Innes Arizona Daily Star Arizona Daily Star

Arizona hospitals are making another attempt to warn policy makers against dropping a quarter million patients from the state's Medicaid program, saying thousands of people will lose their jobs and St. Mary's Hospital in Tucson may be forced to close.

Given federal matches of $2 for every dollar the state spends, the impact of lopping childless adults from the Medicaid rolls would mean 400 people within the Carondelet Health Network would be out of work, as would 100 workers from UA Healthcare.

The federal government has said it won't stand in the way if state leaders decide to cut back the state's Medicaid enrollment in order to help address Arizona's ongoing budget problems.

The Arizona Hospital and Healthcare Association, which contends eliminating a safety net for medical care would simply drive up visits to the emergency room for those unable to pay, compiled a spreadsheet detailing the potential impacts.

Lisa Contreras, a spokeswoman for the Carondelet Health Network, said the chart indicates a "worst case" scenario. There are no plans in the works at this time to close St. Mary's, she said, although the organization is evaluating how it would absorb a hit of nearly $39 million if the changes go through.

Gov. Jan Brewer recently proposed a compromise in which those currently in the system would not be cut off, but all new childless-adult enrollments would cease. With attrition, she estimates that will mean 100,000 fewer people on the rolls within a year. Her plan also includes new or higher co-pays, a reduction in reimbursement rates for physicians and an attempt to wring more money from the federal government.

Brewer's spokesman, Matt Benson, said the office is still looking into the methodology used in the association's matrix, but said "there's no question there will be an impact on hospitals. But the simple fact is there will be an impact if we continue to have an unsustainable Medicaid program as well."

Judy Rich, president and chief executive officer for Tucson Medical Center, says the governor's proposal for a partial enrollment freeze on AHCCCS combined with a 5 percent reimbursement cut would result in a loss of $20 million and more than 200 jobs at Tucson Medical Center. The Senate's proposal - yet to pass the House - for dropping some 250,000 childless adults from AHCCCS is similarly devastating, she stressed.

About 28 percent of TMC's patient volume is from people enrolled in AHCCCS, said Rich, who has been working in health care for 30 years and has lived through a number of budget crises. She said, "this is by far the worst I've seen in my career."

Tucson Democratic Rep. Matt Heinz, the only practicing physician in the Legislature, called the numbers "extremely scary," saying rural hospitals will not be able to remain viable.

With those patients flooding emergency rooms with unmanaged chronic illness like asthma, heart conditions or diabetes, the insured will end up paying more to cover that uncompensated care. And it will translate into longer waits in the emergency room for everyone, particularly if there are fewer facilities. If St. Mary's closes, it could spell overcrowding in other nearby hospitals, he said.

"There is a clear and present health-and-safety risk to the people that we serve," Heinz said.

Senate Majority Whip Steve Pierce said he saw the numbers from the hospitals only after the Senate passed the budget. Hailing from Prescott, which would be one of the rural areas affected by the cuts, Pierce said he hopes ongoing budget negotiations will be able to mitigate the cuts.

The whole thing could end up in court anyway, since voters set the eligibility limits, hoping a tobacco tax and settlement would pay for the expansion. Advocates say the Legislature can't act without voter approval.

Contact reporter Rhonda Bodfield at rbodfield@azstarnet.com or 573-4243. Contact reporter Stephanie Innes at sinnes@azstarnet.com or 573-4134.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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