STT Medical Facilities Continue to Struggle with Medicaid Compensation

Schneider Regional Medical Center Interim Chief Executive Officer Dr. Luis Amaro testifies before the Senate Finance Committee on Wednesday. (Photo by Barry Leerdam for the V.I. Legislature)

St. Thomas medical establishments are still battling for Medicaid reimbursements, despite government officials saying in December that the “Medicaid cliff” had been averted.

The adjustment of the matching Federal Medical Assistance Percentage from 100 percent in 2019 to its current 89.2 percent has dramatically impacted the cash intake of both the Schneider Regional Medical Center and St. Thomas East End Medical Center.

Schneider had a total operating revenue of $49.6 million in FY 2019 and benefited from an additional $5.5 million received in Medicaid and Medicare retroactive payments.

However, the looming 6.2 percent drop to the federal share coming in FY 2021 has hospital officials concerned that future shortfalls in uncompensated care could be in the millions.

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At Wednesday’s Senate Finance Committee hearing, Schneider Chief Executive Officer Dr. Luis Amaro said that once the federal portion of the match retreats to 83 percent the hospital is expecting an average $2 million loss each year.

St. Thomas East End Medical Center Corporation Executive Director Moleto Smith Jr. said just like most health care entities, the principal means of supporting the center’s operations is through reimbursements for services, of which only 75 percent of all services rendered by the center are being reimbursed.

St. Thomas East End Medical Center Corporation Executive Director Moleto Smith Jr. provides budget testimony at Wednesday’s Finance Committee hearing. (Photo by Barry Leerdam for the V.I. Legislature)

The center was supposed to receive a total of $2.9 million in Medicaid retro-claim reimbursements in June 2019 for un-reimbursed or underpaid Medicaid claims during the fiscal years ranging from 2011 to 2013. But Smith said of the $2.9 million only $1.8 million was received, leaving a balance of $1.1 million unpaid to the center. (Editor’s note: The territory received thse funds but the Legislature and Gov. Albert Bryan put these funds to different purposes

Smith pleaded with senators to help resolve the matter because, “The outstanding amount of $1.1 million is necessary to support the center’s efforts, especially as the health center and its staff continues, without interruption, to provide health care during the worst global pandemic in our lifetime.”

Amaro too beseeched the committee to assist, saying, “SRMC (Schneider) in years past suffered great financial challenges by not having government funds to cover its full costs of uncompensated care.”

In FY 2018 and FY 2019, SRMC accumulated $39 million in losses due to uncompensated care. “We are therefore asking this legislative body and the government to consider the cost to provide uncompensated care when finalizing our budget. The average uncompensated care cost over the past five fiscal years equates to $25.6 million per year,” Amaro said.

Even since the inception of Presumptive Eligibility in FY 2016, a program that aids in placing qualifying residents into the Medicaid program, Amaro said the hospital is still dealing with a poor conversion rate from presumptive eligibility to full Medicaid, and “the lack of an independent insurance program to cover individuals without a company plan or those who do not qualify for Medicaid.”

Because of issues like these, and additional funding shortages, Schneider is facing an operating loss of $6.1 million in the FY 2021 budget, Amaro said.

To offset the loss, Amaro said, the hospital “is going to continue to ratchet down on expenses,” and has initiated a physician-led Value Enhancement Committee that will attempt to bring costs down within each department, obtain better pricing for medical items and work to generate additional vendors.

Smith said the St. Thomas East End Medical Center has also been trying to reduce costs, but the patient load for the last three months has seen a 40 percent drop instead of the anticipated 10 percent increase in comparison to the same months the prior year.

The health center is in need of funds so badly, he said, that although the Office of Management and Budget had recommended $1.9 million in funding, the center is requesting over a million more dollars. Smith justified the requested increase, saying the amount “is reflective of the services to be provided to the territory’s projected expanding low-income and uninsured populations attributable to the economic impact of the on-going global pandemic health crisis.”

“You are asking for an additional million dollars,” Sen. Donna Frett-Gregory said. “I don’t see where it is outlined that your expenses will be an additional million dollars.”

Smith did not provide an answer during the meeting but told senators he would provide projections that would validate the center’s ask.

Every penny obtained through Medicaid reimbursement or government funding is vital, Smith said, because the center is actively pursuing the construction of a new site outside of Tutu Park Mall. The center has acquired two commercial acres of land through a long-term land lease, he said and is already in the process of having the architectural engineering work completed for the new facility.

Committee members present for the budget hearing were Sens. Frett-Gregory, Kurt Vialet, Marvin Blyden, Oakland Benta and Dwayne DeGraff. Sens. Janelle Sarauw and Allison DeGazon were absent.

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