Medicaid prisoners ‘devastating’ Carson-Tahoe Health’s bottom line
August 28, 2014
When the state decided to shift prison inmates to Medicaid to save the state on their health-care costs, no one asked what the impact would be on Carson-Tahoe Regional Medical Center.
According to Carson Tahoe Health CEO Ed Epperson, the impact has been "devastating."
Lawmakers and the governor in 2013 decided to drop the Hometown Health plan they had used for years to cover inmate hospitalizations. With the implementation of the Affordable Care Act, state officials were told inmates could qualify for Medicaid coverage at a much lower rate.
But Medicaid pays the hospital far less than the Hometown Health plan.
"We've gone from cost plus a small margin to 10 percent on the dollar," Epperson said.
Epperson made the comments at Wednesday's breakfast meeting of the Northern Nevada Development Authority.
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Epperson said CTH gets about 85 percent of inmate hospitalizations in the northern half of the state, and more than any of the big hospitals in Southern Nevada.
"We're very disproportionately affected," he said. "The burden is just not affordable."
Epperson said he has talked with prisons Medical Director Chuck Schardin about the problem and plans to bring the issue to the governor's office in the near future.
Schardin said unless something is done, "you may be hearing about us not taking care of the prisoners because it's devastating to our bottom line."
Because of the care act, he said the overall percentage of patients on Medicaid has grown from about 6- to more than- 17 percent.
Just an hour later, corrections deputy director Scott Sisco told the Interim Finance Committee the prison system will realize the savings projected for moving inmates to Medicaid — budgeted at about $5.2 million a year.
He said a lot of future costs including for catastrophic events "will be picked up by Medicaid if the hospitals don't refuse to serve us."
He said hospitals are beginning to "push back."
"They are not happy we are putting inmates on Medicaid," he said.
Schardin confirmed the impact on the Carson City hospital is greater than other hospitals in Nevada, since it handles 36 percent of inmate hospitalizations. But he said that only amounts to about 250 a year, far fewer than the total Medicaid admissions.
Sisco said the reason the hospital wasn't involved in the changeover is corrections budgeted for the Hometown Health plan and, in the final days of the 2013 session, the administration moved to the Medicaid plan instead.
Sen. Ben Kieckhefer, who represents Carson City, said he sees a disproportionate impact on specific hospitals. He asked the department to get him information on how many inmate patients go to the different hospitals in the state.
Epperson said other things impacting the hospital's bottom line include sequestration and the huge increases in pharmaceuticals.
"The cost of new drugs is ridiculous," he said.
The federal sequestration cost the hospital about 2 percent of revenue, forcing about 40 layoffs. He said none of those were involved in direct patient care.
He said with nearly 2,000 employees, he believes the hospital has surpassed the school district in total employees, making CTH the capital's second largest employer after state government.