Dan Rahn: Expanding Medicaid Critical for UAMS

by Mark Friedman  on Monday, Jan. 28, 2013 12:00 am  

Rahn said he isn’t sure what will happen to the NIH budget or the federal Medicare health insurance program for people 65 and older. But he doesn’t think the dollars will be going up.

“We expect once a budget compromise is reached, it will involve reductions in spending,” Rahn said.

State money, accounting for 9 percent of UAMS’ budget, also isn’t going as far. State funds increased slightly to $114.8 million in fiscal 2012, but UAMS had to pay more out of that money for Medicaid match payments. The amount paid for Med-icaid match increased from $57.4 million in fiscal 2010 to $72.1 million in fiscal 2012.

“A portion of our [state] funds gets used for matching of federal dollars for uninsured in what is called disproportionate share payments,” Rahn said.

Under the disproportionate share funding formula, Arkansas’ median household income is compared with the national median. Since the state has made progress toward reaching the national average, UAMS’ match climbed from 25 percent to 30 percent, Rahn said.

“So as long as we maintain positive income growth in the state relative to the nation, we’re going to continue to see decrease in the federal match,” Rahn said.

While economic development in the state is desirable, Rahn said, it takes a bite out of the campus’ revenue.

“It’s just one more thing that we’re having to deal with,” he said.

To offset the funding cuts, UAMS is looking for more sources of revenue.

One is in cancer treatment. In June, it completed its $9.5 million purchase of nearly all assets that the Central Arkansas Radiation Therapy Institute used on UAMS’ campus. UAMS also terminated CARTI’s lease agreement on

the campus. In July, UAMS opened the UAMS Radiation Oncology Center, and that’s expected to generate $10 million in net patient service revenue in the cur-rent fiscal year.

Setting up its treatment center re-quired UAMS to buy two main pieces of equipment for $7 million, but the center should be profitable in the current fiscal year, he said.



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