Hospitals are opting out of new state health plan

  • Article by: WARREN WOLFE , Star Tribune
  • Updated: April 16, 2010 - 9:09 PM

Outstate hospitals say they can't afford to offer care to the state's poorest, sickest residents under the revamped program starting June 1.

A revamped state health care program for about 37,000 of the poorest and sickest Minnesotans will start June 1. But with funding cut to one-fourth of the projected costs, it appears that only five of 17 qualifying hospitals have agreed to provide the care -- none outside the Twin Cities area.

Hospitals in Duluth, Mankato, Rochester, St. Cloud and five other outstate cities have told legislators that they will not participate, as have Abbott Northwestern in Minneapolis, United in St. Paul and Mercy in Coon Rapids.

"We can't do it,'' said Jerome Crest, CEO of Immanuel St. Joseph's Hospital in Mankato. The hitch is that hospitals are being told to provide medical care and some social services to an unknown number of high-cost patients at about one-third the payment they received last year.

Rejection of the delicate compromise on General Assistance Medical Care (GAMC), which was hammered out last month after two vetoes by Gov. Tim Pawlenty, has cast doubt on how well the $164 million program will work, especially outside the metro area.

"What does this mean? We don't know yet, but I'm concerned that people in my area may not get the kind of preventive and nonemergency care they need," said Rep. Tom Huntley, DFL-Duluth, where St. Mary's Medical Center is among hospitals that will not participate.

"I'm very disappointed," said Rep. Matt Dean, R-Dellwood, who helped craft the compromise law. "This isn't a perfect program, but I expected more" participation from hospitals.

So far, participating hospitals are Hennepin County Medical Center and University of Minnesota Medical Center in Minneapolis, Regions Hospital in St. Paul, Fairview Ridges in Burnsville and North Memorial in Robbinsdale. They have traditionally served the largest number of GAMC patients.

GAMC patients cost an average of about $12,000 a year to treat, officials said, and typically have multiple chronic diseases and often are homeless or addicted to drugs or alcohol. About 35,000 people are on GAMC in an average month, but as many as 70,000 may participate over the course of a year.

Hospitals given new role

Currently, people on GAMC can go to clinics or hospitals for care, with the state covering much of the cost.

Starting June 1, responsibility for health care and some related social work will be handed off to hospitals. Instead of getting paid for each patient, a hospital will be paid a lump sum to care for all the GAMC patients who choose that facility. The care will be provided through "coordinated care delivery systems" set up by each hospital to reduce expensive emergency care by offering better preventive services.

The compromise was designed by Pawlenty and a bipartisan group of legislators to save money, with the state facing a nearly $1 billion deficit, and reform care delivery.

The new law provides $71 million for 17 hospitals that historically have cared for about 80 percent of GAMC recipients. The five hospitals likely to begin the program will get a larger share of the money under the state law, but also likely will get more patients.

All other hospitals may share $20 million set aside for uncompensated care given to GAMC patients for six months starting June 1, although the money is expected to be used up sooner. After that, the law envisions that more hospitals would join the list of those forming coordinated care delivery systems and receive some payments based on their historic coverage of GAMC patients.

"This was always intended as a short-term solution," said Sen. Linda Berglin, DFL-Minneapolis, who helped negotiate the compromise after her earlier and better financed plan was vetoed by Pawlenty in February.

Starting in 2014, a federal expansion of Medicaid will cover patients now part of GAMC. Berglin and Huntley are sponsoring legislation to get in sooner, under the new federal health care overhaul law. Pawlenty has generally opposed that because of added costs to the state.

Huntley and Dean said Friday they will try to change the new GAMC law, moving about $13 million that would have gone to nine outstate hospitals that don't participate into the fund for uncompensated care, available to all hospitals in Minnesota.

Berglin opposes that: "The law is the law,'' she said. "Some hospitals may change their minds and join after they've gone a couple months on their own."

Big stick, small carrot

Meanwhile, five Twin Cities hospitals are creating care systems to fit the new program.

"It's kind of exciting and kind of scary," said Geoff Bartsh, government relations director for Regions Hospital in St. Paul. "It's a big stick and a small carrot, but it's forcing us to speed up efforts we've already had under way to improve our quality while trying to control costs."

All five are considering opening special clinics within their hospitals to care for GAMC clients, and perhaps uninsured clients, Bartsh said. "We're all still figuring this out, including the state [Department of Human Services]."

Regions will be the only participating hospital in the east metro area.

"It makes us a little nervous because now we'll get all the GAMC patients in the east metro area," Bartsh said. "How's this going to work? I wish I knew."

In Duluth, St. Mary's hospital is working on ways to better care for its GAMC clients outside of the new program, said CEO Dr. Thomas Patnoe.

"It's going to hurt us, this new law. Essentially, the state is offering to pay us $2 million where they paid us $8 million, but we're asked to take on an unknown number of new patients, add some social services, and then redesign it all," he said. "We simply can't buy into it."

Warren Wolfe • 612-673-7253

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