(The Center Square) – Mississippi’s second part of a Medicaid reimbursement plan that the state says will provide more than $700 million in additional funds for the state’s hospitals has been approved by federal officials.

Gov. Tate Reeves, on social media, said the approval will result in an additional $160 million for hospitals across Mississippi, which is $23 million more than originally projected.

“This additional $160 million will go a long way toward further strengthening hospitals across our state,” Reeves said. “I’d like to thank all of the medical professionals and health care leaders who helped get us to today.”

The Centers for Medicare and Medicaid Services still has to approve the rest of the $708 million plan, which would be funded by annual assessments hospitals pay to the state’s Medicaid program. These assessments are calculated using a formula provided under state law.

The $708 million figure is reached after considering the funds the hospitals make to finance the initiative.

Under the plan, Medicaid base payment rates are supplemented by the reimbursement of inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit.

The first component of the plan was approved by the Centers for Medicare and Medicaid Services in December. Hospitals were reimbursed near the average commercial rate for services provided through the managed care delivery system. 

According to a news release, the Mississippi Division of Medicaid will be delivering the first round of payments to hospitals in the next few weeks. 

The approval comes as lawmakers could be expanding the state’s Medicaid program under the Affordable Care Act. Under the ACA, the federal government reimburses states with 90% of expansion costs, with state taxpayers picking up the rest of the tab. 

A conference committee will take up House Bill 1725, known as the Healthy Mississippi Works Act. The legislation, passed by the House by a veto-proof 99-20 vote on Feb. 28 and rewritten and passed by the Senate 36-16, would expand Medicaid eligibility with a work requirement if approved by the federal government.

The bill also would expand Medicaid even if the Biden administration refused to approve a work requirement.

KFF, formerly known as the Kaiser Family Foundation, says the administration will likely not approve such a requirement. It also says 123,000 Mississippians could become eligible for Medicaid if a plan is signed into law.

Any Medicaid expansion plan will likely face a veto from Reeves, who ran against expansion in his gubernatorial reelection campaign.