Barry Keel: Medicaid cuts could hurt hospitals

Published 9:59 pm Monday, October 20, 2008

Adding to the economic crisis regionally and nationally comes the news that Medicaid cuts could limit quality of health care to the poorest in the state.

Recently, the Alabama Medicaid Agency told hospitals in the state they face drastic cuts in payments.

Barry Keel, administrator at Vaughan Regional Medical Center, has said these kinds of payment cuts would be devastating to the health of the medical community and the long-term viability of many Alabama hospitals.

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“The governor and Medicaid commissioner have agreed to reconsider the initial proposed cuts,” Keel explained, “and we are optimistic that we can identify a mutually agreeable solution during the coming weeks that will not impede our ability to continue to provide critical medical services to our many community residents in need.”

Rates for hospitals already are low for Medicaid program — the lowest payments to hospitals among all insurance carriers.

Right now, the federal government has backed up, allowing Alabama to continue through the end of the year with existing Medicaid rates, according to Medicaid Commissioner Carol Steckel.

The basic issue here is federal money pays for nearly 7 percent of the $4.5 billion in Medicaid costs. The government has recalculated how it figures hospital costs, meaning a 45 to 55 percent cut in Medicaid rates for most hospitals, according to the Alabama Hospital Association.

Keel has said the cuts under the new way of figuring reimbursements would mean a loss of $3 to $4 million for Vaughan. The hospital would have to write off the loss.

While the cuts wouldn’t mean immediate layoffs of medical personnel in Dallas County and Selma, the hospital “would be forced to evaluate the feasibility of all of our service lines as a prudent step to remain viable long-term,” Keel explained.