HARRISBURG, PA – With three public hearings completed, hospitals and their two associations are awaiting the decision by the Department of Public Welfare’s Office of Medical Assistance Programs (OMAP) regarding how it will revamp Pennsylvania’s Medicaid reimbursement schedule.
At the heart of the issue is how to adjust the 20-year-old Medical Assistance base rates, which vary between the eastern and western regions and from hospital to hospital.
The Hospital Council of Western Pennsylvania and its member hospitals want payment equity and parity across the state and a transparent process for the redesign, said Vice President Patricia Raffaele.
The disparities are compounded by the fact that Pennsylvania has one of the lowest Medicaid reimbursement rates in the country – 48 cents on the dollar, she said.
“We need to create some kind of improvement so that we can begin to deal with vagaries of a system that pays below cost,” said Paula Bussard, senior vice president of policy and regulatory affairs for the Hospital and Healthcare System of Pennsylvania.
OMAP is still discussing the structure of the payment redesign with the Hospital and Health System Association of Pennsylvania, said Stacey Witalec, spokeswoman for the Department of Public Welfare. “The desired outcome is a hospital rate agreement signed by both the department and the hospital community in order to affect the new payment system,” she said.
As the redesign is being hammered out, Witalec noted that the Department of Public Welfare must operate within the available state budget, which poses another problem.
“It’s widely recognized among all parties that the allotted $36 million is not enough to enact the process,” Raffaele said. “But at least it’s starting the process.”
Trying to change the reimbursement schedule has been an issue for the last 10 years, she said. In a case of bad timing, Pennsylvania’s current economic environment, which includes a state revenue deficit, has handcuffed the state’s ability to address some of its other healthcare issues and initiatives.
Whether the redesign will be a victim of economic constraints remains to be seen, Raffaele said. “We are in uncertain times,” she said.