Michigan hospitals are worried that the state's new proposal for coping with tight Medicaid funding will leave them in the lurch.
The state is seeking a wavier to reduce benefits for some Medicaid beneficiaries in return for extending health coverage to 220,000 working poor people not in the Medicaid program. Those new benefits, however, would not include inpatient care. The state hospital association is concerned that the proposed changes would lead to more bad debt for providers.
"If we have copays for the poorest of the population, we might as well just admit on the front end that we're going to have an uncollectible bad debt," said David Seaman, executive vice president of the Michigan Health and Hospital Association.
Michigan's 144 hospitals had a total of $1 billion of uncompensated care, which includes bad debt and charity care, in 2000.
The Michigan Department of Community Health is proposing that its new health coverage program begin Oct. 1. The state submitted its application to HHS last week and expects to get approval as soon as May, MDCH spokeswoman Geralyn Lasher said.
Both Seaman and national consumer agencies said the proposal is complicated and difficult to assess at this point. "There are a lot of unanswered questions," said Joan Alker, associate director of government affairs at Families USA consumer group.
Like the Utah Medicaid waiver application approved by HHS last month, however, Michigan is proposing a benefit package that would not cover inpatient services for some poor people who are not covered by Medicaid.
Lasher estimates that about 50,000 low-income childless adults, included in the 222,000 total, will have no inpatient coverage.
The trend concerns Fish Brown, the Catholic Health Association's senior director of government relations, who argues that payment for inpatient care should be a part of any minimum benefit package.
States are "banking that hospitals are not going to not accept Medicaid patients," Brown said.
Parents making less than 50% of the federal poverty level, who are required to be covered by Medicaid programs, would be switched to a less generous benefit package that includes $5 copays for various services.
Of Michigan's 8.6 million residents under age 65, 12.4% lacked health insurance in 1999, Lasher said.