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CELINA - Executives of local health care systems believe the federal tax and spending bill will inflict damage to their industry but said it's just too early to calculate the impending fallout in precise dollars and cents.
Still, neither Mercer Health nor Joint Township District Memorial Hospital indicated any immediate plans to close facilities or cut staff in statements made to The Daily Standard, stressing they will continue to provide the best care possible to their patients.
With the passage of the bill this week, Congress plans to slash Medicaid by about $1 trillion over 10 years.
States and rural health advocacy groups warn that cutting Medicaid - a program serving millions of low-income and disabled Americans - would hit already fragile rural hospitals hard and could force hundreds to close, stranding some people in remote areas without nearby emergency care.
More than 300 hospitals could be at risk for closure under the Republican bill, according to an analysis by the Cecil G. Sheps Center at the University of North Carolina at Chapel Hill, which tracks rural hospital closures.
After the Senate passed H.R. 1 on Tuesday, Rick Pollack, president and CEO of the American Hospital Association, said the legislation would cause 11.8 million Americans to be displaced from their health care coverage and moved to uninsured status.
"The real-life consequences of these nearly $1 trillion in Medicaid cuts - the largest ever proposed by Congress - will result in irreparable harm to our health care system, reducing access to care for all Americans and severely undermining the ability of hospitals and health systems to care for our most vulnerable patients," Pollack said in a statement.
Following the Senate's passage of the tax and spending bill, The Daily Standard on Tuesday evening emailed a list of questions, based on the legislative language at that time, to four health care systems - Mercer Health, Joint Township District Memorial Hospital, OhioHealth Van Wert Hospital and Wayne HealthCare.
Mercer Health, a local health care system which is anchored by Mercer County Community Hospital in Coldwater, responded with statements authored collectively by CEO Jon Dingledine, Vice President of Finance Cory Albers and Director of Reimbursement Kris Siefring.
"The sheer magnitude of the level of reductions to the Medicaid program alone will impact all patients, not just Medicaid beneficiaries, in every community across the nation," they said.
Medicaid makes up 9% of payment sources or roughly $17.6 million of gross revenue at Mercer Health, based on the audited financials of fiscal year 2024, which came to a close at the end of March.
"During our fiscal year end … we have billed approximately $17.6 million in gross charges and have been reimbursed approximately $4.6 million. Thus, we have adjusted off approximately $13 million," they said when asked about the Medicaid reimbursement rate in comparison to actual billing assessments.
The officials were unsure how much uncompensated care Mercer Health may experience as a result of the freshly-passed bill.
"H.R. 1 will certainly have an impact on Mercer Health, but it is hard to estimate the impact to our uncompensated care both in terms of lost revenue and patient numbers," they said. "The reason being, is that it is unknown how the individuals at risk of losing their Medicaid benefits will respond, and if and how they will find alternative health insurance coverage."
They said Mercer Health's goal is to continue providing the same level of service to patients but underscored the financial headwinds already at play. Even before H.R. 1 came on the radar, Mercer Health has contended with inflation levels that are outpacing reimbursement by a wide margin.
"This is not just limited to Medicaid, but instead across the board with all payers," they said. "Overall, our contractual adjustments have risen from around 49% in 2022 to 55% today, meaning, for providing the same care, we get paid 6% less now than we did in 2022. This coupled with the rising costs due to inflation has practically eroded any margin the hospital was able to use to subsidize some of our lesser performing services."
Mercer Health is also, they said, in a constant battle with insurance payers "that are deploying all sorts of tactics to reduce the amount of money being paid for healthcare claims."
"Charges are being denied as a result of unilateral policy changes being implemented," they said. "Prior authorizations are being challenged and scrutinized, thus making it harder and harder for a patient to receive the testing or care they need. In some cases prior authorization (is) being denied after the procedure takes place, resulting in a complete denial of payment."
Consequently, Mercer Health revenue-cycle teams are having to spend more time and resources on collecting payments - all while large insurance payers are recording record profits, they insisted.
As to the potential impact of H.R. 1 on Mercer Health's workforce, the officials said a leadership team has been actively monitoring the legislation and informing employees of new developments, when appropriate.
"(Mercer Health) has no intentions to alter staff," they said. "The staff at Mercer Health has done a tremendous job of figuring out how to keep up the level of care, while constantly searching for ways to improve efficiency and implement cost saving measures."
Joint Township District Memorial Hospital in St. Marys issued a blanket statement about the implications of H.R. 1, courtesy of CFO Tricia Pohl, who closely monitors legislation impacting the hospital financially.
Some of the health care provisions introduced into the Senate version of the tax and spending bill will have a negative impact on healthcare providers, Pohl said.
"The addition of Medicaid work requirements and more frequent Medicaid eligibility redeterminations will reduce the number of individuals who qualify for Medicaid insurance as well as increase the amount of uncompensated care that is provided," she said. "At this juncture, we are unable to estimate the exact impact to our organization."
At the moment, Medicaid patients make up about 12.5% of JTDMH's patient population.
"On average, Ohio's rural hospitals receive 65 cents of reimbursement for every $1 in cost," Pohl pointed out.
Public outcry over Medicaid cuts led Republicans to include a provision that will provide $10 billion annually to buttress rural hospitals over the next five years, or $50 billion in total. Many rural hospital advocates are wary that it won't be enough to cover the shortfall.
"The addition in the Senate of $50 billion in funding to rural hospitals over five years is designed to help offset the negative impact specifically to rural providers. How this will specifically be distributed, if it is passed, has not yet been disclosed," Pohl said.
The provisions of the tax and spending bill, she noted, will be tapered in through the course of several years.
"During that time JTDMH, will need to react to the specific impacts to ensure we are able to provide quality care to the residents of Mercer and Auglaize County for many years to come," Pohl said.
OhioHealth Van Wert Hospital and Wayne HealthCare in Greenville issued brief statements in response to the newspaper's questions.
Lindsey Gordon, a spokesperson for OhioHealth, directed the newspaper to the Ohio Hospital Association.
Terri Flood, vice president of marketing and business development, also offered a tersely worded statement, saying officials were unable to provide specific details given the timing around the holiday and story deadline.
"We have been transparent with our employees, Board of Trustees, community, and external partners regarding the implications of proposed Medicaid reductions," Flood said.
U.S. Sen. Bernie Moreno, R-Ohio, in a news release Wednesday said Ohio rural health systems thanked him and fellow U.S. Senator Jon Husted, also an Ohio Republican, for securing billions in new funding.
Chief executives of several rural Ohio health systems sent a letter to the two Senators expressing their "deepest gratitude" for the senators' "tireless work behind the scenes" to secure billions of dollars in new funding for Ohio hospitals, according to Moreno.
Mopreno cited the pair's success in securing $1.3 billion in funding for Ohio's rural hospitals as part of the reconciliation bill that the Senate passed on Tuesday.
The letter's signatories were Memorial Health System CEO Scott Cantley, Genesis Health System CEO Matt Perry, Adena Health System CEO Jeff Graham and Southern Ohio Medical Center CEO Ben Gill, according to Moreno.
"Your leadership and advocacy made a clear difference in steering vital funding toward the facilities that are the backbone of healthcare in our part of the state. Thanks to your efforts, our hospitals will be able to continue providing high-quality care close to home, keep essential services running, and sustain thousands of local jobs-for years to come," the letter reads.
"The One Big Beautiful Bill includes robust funding for rural hospitals, and we are proud to have secured $1.3 billion for these facilities across Ohio," Moreno and Husted said in joint statement. "We are committed to ensuring that rural hospitals in Ohio are able to provide high-quality health care in communities throughout our state, and this bill does just that."
- The Associated Press cointributed to this article.
