Lawmakers approved $104 million for Mississippi hospitals. Some say it’s not nearly enough.

by Devna Bose, Mississippi Today
March 28, 2023

Mississippi hospital leaders have been begging for help for months, and the Legislature has answered the call — though some advocates and lawmakers say it’s not nearly enough.

Both chambers on Tuesday approved a $103.7 million grant program that will be split by Mississippi’s struggling hospitals.

The pandemic weakened the state’s already-stressed health care infrastructure — costs for supplies and workers went up, and reimbursements from insurance providers did not. Many of the state’s hospitals have been bleeding out for the past few years, shutting floors and service lines one by one.

Now, a third of Mississippi’s rural hospitals are at risk of closure, and half of those within a couple of years. It’s a situation poised to worsen health outcomes in a state with already some of the worst in the country.

Both legislative chambers this week passed Senate Bill 2372, which establishes a grant program for hospitals, and House Bill 271, which funds it.

Previously, the Senate’s version of the bill aimed to give $80 million to hospitals, focusing its efforts on rural health care providers. Instead, the House wanted to give the funds to larger hospitals.

After closed-door deliberations among six legislative Republicans, the two sides reached a compromise on Tuesday: They’re distributing $103 million to hospitals through a hybrid funding model, using funds from the American Rescue Plan Act, according to the bill. The Mississippi Department of Health is receiving $700,000 to administer the program, according to Senate Medicaid Chairman Kevin Blackwell, R-Southaven.

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The compromise falls short of what hospital leaders and some rank-and-file lawmakers said was needed. The Mississippi Hospital Association projected early this year that hospitals would need $230 million in extra funds to stay afloat. Despite the increase in grants, they’re still about $40 million short.

Negotiations of the grant program came as the state sits on a record revenue surplus of nearly $4 billion. And Republican lawmakers continue to leave more than $1 billion per year on the table by rejecting Medicaid expansion.

Tim Moore, president of the MHA, said on behalf of state hospitals that health care leaders are very appreciative of the actions taken by the Legislature to pass the measure, especially the creation of an allocation model that supports all hospitals, no matter the location or size.

But he added the lower-than-needed total will not solve the ongoing hospital crisis — that new, recurring revenue will along with a remodeling of Mississippi’s health care and payment infrastructure.

“The solution has not changed,” Moore said. “Payer issues and the burden of uncompensated care must be addressed. The Mississippi hospital system that provides care to all Mississippians costs $23 million dollars a day to operate. Any sustainable business model must generate adequate revenues to cover expenses. Hospitals are no exception.

“If a long term solution is not developed, access to care will decline and fewer services will be offered at local community hospitals,” Moore said.

Legislative Democrats in January proposed a grant program that would appropriate $200 million to the struggling hospitals and used the opportunity to blast Republicans’ inaction on the issue. This week, most House and Senate Democrats voted to approve the Republicans’ $104 million grant program but used floor debate to argue that the state should be doing more.

“It is particularly galling that in the same weekend when we saw Mississippians struggle to find emergency health care after a natural disaster, Republican leaders still felt it appropriate to allocate less than half of what hospitals have been begging for just to keep their doors open,” Rep. Robert Johnson, the House Democratic leader from Natchez, said on Tuesday. “They stood up and told all of us how awful the devastation of the tornado was, then they immediately turned around and refused to do the bare minimum.

“In one breath Republicans are telling us that we’ll rebuild from the storm, that they are pro-life, that they want a better future for the state,” Johnson continued. “And in the next breath they’re saying, ‘Take this and shut up.’ All while they’re telling us we’re in the best financial shape we’ve ever been in. It would be shocking if it weren’t so completely expected.”

Ahead of the final vote in the House and Senate on Tuesday, Republican lawmakers laid out the basic formula for the grant program. If a hospital has more than 100 beds, it will receive a base amount of $1 million.Hospitals with an emergency room and fewer than 100 beds will receive $625,000.

Specialty hospitals, such as Brentwood Behavioral Healthcare in Flowood which is an inpatient psychiatric treatment center, and critical access hospitals will get a base of $500,000. Critical access hospitals have very few inpatient beds but get more money for services they provide. Critical access hospitals, such as Sharkey Issaquena Community Hospital in Rolling Fork, are a designation a step below acute hospitals and are typically reimbursed by Medicare at a rate of 101%, theoretically allowing a 1% profit. Acute hospitals with no emergency rooms get $300,000 as a base amount.

Then, hospitals get an extra $250,000 if they operate small rural emergency rooms and a little less than $2,000 for each bed they have.

The most any one hospital is receiving is $2.3 million, which is going to University Hospitals & Health System. Some providers, such as Diamond Grove mental health clinic in Louisville, are receiving nothing. Others, like Jasper General Hospital, are receiving as little as $331,502.

Major hospital systems including Merit Health, North Mississippi Medical Center and Baptist Memorial are getting millions.

“In the original Senate bill, some hospitals received nothing,” Rep. Sam Mims, a Republican from Natchez and chair of the House Public Health and Human Services committee, said on the floor Tuesday. “This makes sure they all receive something.”

Mims, who was one of the three House negotiators of the grant program, works for Merit Health.

Neshoba County General Hospital in Philadelphia, the county’s only hospital, is getting just under $1 million in grant money. In recent months, the hospital has closed one of its acute floor wings and nurse stations — in the past decade, admissions have gone down by half.

Neshoba General CEO Lee McCall said that the hospital’s loss in the past five months is relatively equal to the extra grant money, and it’s about $200,000 more than what he expected to receive from the state. The hospital projects a $2.5 million loss this year.

“This amount and the Medicaid enhanced amounts will help significantly by cutting that deficit by more than half,” he said, referring to the extra money hospitals are receiving in supplemental MHAP payments, or payments hospitals receive to offset unequal reimbursement rates. “We are also implementing other cost cutting measures and initiatives to shrink the loss gap. It is much appreciated.”

He stressed that the grant money will get the hospital to temporarily break even, but there are still seven months to go in the year — and the years beyond that.

“The one time grant funding is much appreciated, but doesn’t fix the ongoing problems we’re dealing with in hospitals,” McCall said.

The Delta’s Greenwood Leflore Hospital is arguably in one of the most dire financial situations of all hospitals in the state. The hospital is also getting a little less than $1 million under the new program.

The hospital has already shuttered their neurology, urology and labor and delivery units, among others, in an effort to cut costs. They’re months away from closing, according to their interim CEO Gary Marchand.

“We appreciate the grant funds, and it will help in our efforts to continue operations in the short term,” Marchand said when reached by text Tuesday. “It will replace a portion of the cash reserves used during the pandemic.”

The legislation now goes to Gov. Tate Reeves for final approval. It’s not clear when funds will be distributed. Spokespeople from the Mississippi State Department of Health did not answer questions by press time.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.