The Forrest Health hospital system, Hattiesburg, Miss., is expecting its first red ink since 2007.
The projected $2.5 million loss for fiscal 2014 is from federal cuts, including payments for uninsured patients, CEO Evan Dillard told The Hattiesburg American. Forrest General alone is expected to lose $3.7 in such "disproportionate share" payments, he said in an email.
Across the city, Wesley Medical Center CEO Mike Neuendorf said the hospital projects a $1 million reduction in DSH payments.
The Forrest Health system also is planning for cuts of more than $10 million in cuts from the federal budget stalemate and supplemental payments.
The five-hospital system has a $1.4 billion budget. Its flagship is Forrest General Hospital in Hattiesburg.
"We do not receive supporting payments from the county so we have to operate with Revenues over Expenses in order to reinvest in new technology and maintain jobs," Dillard wrote.
The Forrest County Board of Supervisors approved the fiscal 2014 budget in August.
That budget predicts about $22.4 million in DSH and Medicaid supplemental payments.
The hospital system will still provide charity care to its 19-county area, and officials already have budgeted an automatic discount for patients dubbed "self-pay," Chief Financial Officer Andy Woodard told the board of supervisors.
He said about 60% of hospital income in such cases comes from federal and state governments.
"These patients are still going to come in for treatment. We just have no source of funding," Woodard said. "... We're just hoping for a funding source, i.e. Medicaid expansion."
State lawmakers reauthorized Medicaid earlier this year but did not vote on whether to expand the program as the Patient Protection and Affordable Care Act allows. It would have added 300,000 people to the rolls, but federal money for the expanded care would begin to dwindle after 2014.
"We currently and will continue to support the expansion of Medicaid," Dillard said.
More than 600,000 of Mississippi's 3 million residents are on Medicaid.
Patient Protection and Affordable Care Act requirements going into effect next year will cost Medicaid an additional $272 million to $436 million from 2014 to 2020 without Medicaid expansion, according to a Division of Medicaid report.
Dillard said Forrest Health's primary strategy to make up the difference will be reducing expenses while attempting to grow volume to generate the level of cash necessary to operate the hospitals.
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