COLUMBUS, Ohio--Ohio's two biggest hospital providers of charity care may have saved themselves millions of dollars by helping to temporarily scuttle a new Medicaid disproportionate-share funding formula passed late last month by the Ohio Hospital Association.
The OHA's board of trustees voted 8-6 to change the distribution formula used to dole out money from the 11-year-old plan, known as the Hospital Care Assurance Program (HCAP).
The OHA's revised formula had hospitals in the areas hardest hit--Cleveland and Cincinnati--crying foul and claiming the proposed formula was an inequitable distribution of charity-care funds.
Pleas from the urban providers socked hardest--University Hospital in Cincinnati, a 411-bed hospital owned by six-hospital Health Alliance of Greater Cincinnati, and MetroHealth Medical Center, an 811-bed Cleveland public hospital--as well as from the 35-member Center for Health Affairs, a Cleveland hospital lobbying group, apparently found receptive ears within the Ohio Department of Job and Family Services, which makes the final decision on the formula used to distribute the money--$526 million this year.
In the past, the state routinely accepted the OHA's recommendation, Ohio sources said. But late last week the state agency sent the revised formula plan back to the OHA drawing board. HCFA, which oversees disproportionate-share fund distribution, must approve the plan.
The HCAP program assesses Ohio hospitals money that is collectively pooled to leverage matching federal funds. Every hospital in the state is assessed a rate based on its total facility expenses. How much each hospital receives in return is based on the distribution formula, which traditionally has rewarded charity care. This year's formula for the first time recognized losses attributed to Medicaid managed-care plans and uncompensated care delivered to patients living above the federal poverty line.
The department of job and family services, formerly the Ohio Department of Human Services, collects the assessments and distributes the checks.
OHA spokeswoman Mary Yost said the board tried to minimize the number of hospitals that did not recoup their assessments; last year there were 23 losers, and this year there will be 17 or 18, she said.
MetroHealth spokesman Paul Patton complained that under the revised formula, his hospital is "a safety net provider operating without a safety net."
MetroHealth would have received $6 million less in fiscal 2000 (ending Sept. 30), down from last year's $38.5 million.
Last year, MetroHealth was the state's largest provider of charity care, spending $84 million. The hospital's charity-care bill is expected to hit $100 million this year.
Cincinnati's University Hospital said the proposed formula change would have cost it $13 million off last year's $41.6 million.
"We don't see this as a done deal," said University spokeswoman Gail Myers. "We're still figuring out the impact and hoping to change it."
Jane Holler, a spokeswoman for the job and family services department, said the state asked the OHA to submit other formulas.
Nancy Ensign, vice president of the Center for Health Affairs, said her members lobbied against the proposal because it violated the original principles of the HCAP program.
"The dollars are supposed to follow the patients," Ensign said. "With this formula we didn't think that happened."
Ensign said the proposal would have cost northeast Ohio hospitals $16 million to $20 million in fiscal 2000.