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Arkansas Hospital Association’s Paul Cunningham: ‘Having a Payer is Always Better Than Not’

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The Arkansas Hospital Association is in the process of surveying members about the immediate impact of the swarm of newly insured Arkansans, but Executive Vice President Paul Cunningham said the results would probably not be available for another month.

“In essence, having — what? — 240,000 people with insurance has been a good thing in terms of reducing the number of patients who can’t pay,” he said. “Having a payer is always better than not.”

But even those new dollars are not making up for other financial stresses on the hospital industry. That’s a point made by both Cunningham and Ray Montgomery, CEO of White County Medical Center.

As originally envisioned, the ACA would reduce reimbursement rates to hospitals for Medicare patients — those 65 and older — but make up for that by funneling in millions of patients who would be newly insured either through private plans or through the expansion of Medicaid. The U.S. Supreme Court upheld the constitutionality of the “individual mandate” requiring those who can afford insurance to buy it, but it ruled that requiring states to expand Medicaid was unconstitutional. Twenty-four states have opted not to expand Medicaid, leaving their hospitals with reduced Medicare reimbursements and without new Medicaid dollars to replace them.

Meanwhile, the automatic federal spending cuts known as sequestration sliced hospital reimbursements by 2 percent nationally, and the private option hasn’t exempted Arkansas facilities from that pain.

“The federal government is having major cuts to providers that are going to have a serious effect on our ability to provide access and quality of care,” Montgomery said.

In WCMC’s specific case, payments from patients covered by the private option — assuming it remains intact — are expected to bring in about $15 million over the next six years, but Medicare cuts and sequestration are projected to cost $66 million over the same period.

“We’re still at $41 million in shortfalls,” Montgomery said. “So to the question, ‘Will this offset the reimbursement costs?’ Absolutely not. This is the wisdom of the federal government.”

Arkansas avoided even more pain by adopting the private option, but, as conservative blog The Arkansas Project noted last week, Crittenden Regional Hospital will close on Sept. 7 anyway.

“I think the fire they experienced had as much to do with that final decision as anything,” Cunningham said, referring to a fire in June that forced the hospital to close for more than two weeks. “It’s easy for people to point their finger and say the Affordable Care Act has done all this, and it just isn’t so.”

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