LEWISTON, Maine - Maine hospitals are seeing bad debt and charity care costs skyrocket. It comes at a time when individuals have more options to get health coverage under the Affordable Care Act.
But Maine is one of 22 states that opted not to expand Medicaid under the ACA. And that decision, some hospital leaders say, is one of the primary drivers behind the rise in uncompensated care. Patty Wight reports on how hospitals are coping with millions in lost revenue.
A lot of people weren't sure how the Affordable Care Act would play out when it became law. But Carolyn Kasabian, chief financial officer of St. Mary's Hospital in Lewiston, thought one thing was for sure - more of St. Mary's patients would have insurance. Turns out, she was wrong.
"We've never seen more uninsured in our hospital as we have in 2014," Kasabian says. "And, really, it's the exact opposite of what we anticipated with the ACA."
Kasabian says St. Mary's has had to absorb about $2 million extra in uncompensated care. To help make up for the extra costs, the hospital closed a behavioral intensive care unit and started charging free care patients a down payment to enroll in its outpatient substance abuse program.
Kasabian points to one major culprit: "I would say the Medicaid expansion is the major challenge for us."
Kasabian says the state's unwillingness to expand Medicaid, along with previous cuts to the MaineCare program - the state's version of Medicaid - is what created the current situation.
And Jeff Austin, of the Maine Hospital Association, says it's exacerbated by a reduction in Medicare reimbursement rates that were implemented federally in order to pay for the expansion.
"So the Medicare cut to hospitals, which totals hundreds of millions of dollars, is in place, and we've lost that revenue," Austin says. "And what we really need is the corresponding benefit that was bargained for in Washington, which is Medicaid expansion."
Austin says, currently, charity care at Maine hospitals amounts to about $130 million in costs.
"Our free care and bad debt has tripled over the last five years - it was $13.6 million in 2014," says Lois Skillins, the CEO at Mid Coast Hospital in Brunswick.
Skillins says many factors contribute to the rise in uncompensated care, and expanding Medicaid would go a long way toward helping both hospitals' and patients' finances.
Otherwise, she says, what ends up happening is the hospital has to raise prices, "and that drives up the cost of care for people who are paying health insurance."
Mid Coast raised its prices 3 percent last year, a move that is counter to the ACA's goal to lower costs. The hospital is also looking to increase efficiencies in its larger health system, which include primary care offices and what's known as a Patient Centered Medical Home model to deliver higher quality care.
"One example is, part of this program is what's called a Community Care Team, where patients who have the highest needs in our system have a social worker, and a nurse, and a physician who wrap their arms around the person to help get their social, physical, and emotional needs met," Skillins says.
Team members provide support to patients in their homes. For the 113 patients in the program last year, emergency room visits declined 20 percent and hospital re-admissions dropped 28 percent.
"It cost $110,000 to run the Community Care Team last year, and we saved mostly Medicare and Medicaid over $550,000 with that decline in patient and emergency care," Skillins says. "So I think that's a pretty good return on investment."
The irony is that the half a million dollars saved is actually a loss for the Mid Coast health system. Payment reforms are moving towards reimbursing health care providers for quality versus fee-for-service, but there is a lag time. So at this point some of those efficiencies aren't improving the hospital's bottom line. "I feel like I've got a foot on the dock and a foot on the boat," Skillins says.
Carolyn Kasabian of St. Mary's says the hospital has boosted its outreach efforts to encourage patients to sign up for insurance. Six staff are trained as marketplace application counselors.
As for the prospects for Medicaid expansion, Gov. Paul LePage has vetoed multiple legislative attempts to do so. But just this week the governor said that he's concerned that Mainers living below 100 percent of the poverty level can't access affordable health insurance - a signal to some lawmakers that he may be willing to move on the issue.
