Reeves Medicaid Plan is a Major Help to Rural Hospitals

Mississippi’s rural hospitals have been financially suffering for years.  As you have heard us say before, there is not one single reason for the red ledgers of our hospitals and not one single solution that will resolve the issue.  Rather, the “death by a thousand cuts” mantra has been widely used to describe the problem, and many different solutions have been offered to assist.  

In our most recent Governor’s Healthcare Task Force that set out to solve some of these issues, there were more than twenty different solutions offered to assist in reinforcing our rural health network.  Several of these solutions have already been made, including telehealth expansion, broadband expansion, a single source credentialing system for Medicaid, and more.  

One major solution that was also highly touted was a boost in Medicaid payments to hospitals by taxing hospitals and leveraging these funds for a federal drawdown of the Mississippi Hospital Access Program (MHAP).  By doing this, hospitals will pay $178 million in taxes but will provide $960 million in total funds to be distributed back to hospitals.  It is predicted that this plan would boost most hospitals’ bottom line by several percentage points, getting most into the black with around a 1% margin.

Granted, a 1% margin is not much, but it is enough to allow facilities to provide quality access to healthcare in both urban and rural areas of the state.  For our rural hospitals, this may be a critical lifeline needed to provide stability to the fragile system that we have.  The proposal has been submitted to CMS for approval, and once approved it will become law retroactive to July, 2023.  This will provide immediate relief to rural hospitals.

Now, this program does not expand Medicaid insurance coverage to any patients beyond current Medicaid guidelines, so further debate is sure to take place on this subject.  But, for now this seems to be a sorely needed relief for our rural hospitals and our rural safety net in general.

We are thankful to Governor Tate Reeves and Medicaid Executive Director Drew Snyder (and staff) for their hard work in designing this program and submitting it for approval.

This will be discussed in detail during several presentations at the Mississippi Rural Health Conference on November 15-17, 2023 in Vicksburg.