Governor Tate Reeves has announced a series of sweeping Medicaid reimbursement reforms in Mississippi that are anticipated to generate an estimated $700 million for hospitals throughout the state.
Reeves made the announcement on Thursday afternoon, stating that the move includes two hospital payment initiatives that will provide millions in additional Medicaid funds for hospitals each year.
The first initiative — known as the Mississippi Hospital Access Program (MHAP) — will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system.
With the directed payments, hospitals would be reimbursed near the average commercial rate, which has been considered the federal ceiling for Medicaid reimbursements in managed care.
“The overall shift is significant,” Reeves stated. “This will occur not only in this fiscal year but on an ongoing basis and will provide long-term funding for Mississippi hospitals.”
The second initiative will supplement Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit (UPL).
The payment mechanism is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the Mississippi Division of Medicaid earlier this calendar year.
“This funding will have a profound impact on the bottom line of state hospitals, both large and small,” Reeves explained.
To minimize the recurring impact of state general fund expenditures, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.
Hospitals are projected to net an increase of $689 million through the initiatives, after accounting for the funds the hospital made to help finance the initiatives.
The federal Centers for Medicare and Medicaid Services (CMS) must approve both proposals, which are currently being submitted. If approved, both would be effective immediately.
The following hospitals are anticipated to be impacted by the new initiatives:
The University of Mississippi Medical Center – Over $66 million or 50 percent increase Forrest General Hospital – Over $53 million or 337 percent increase Singing River Hospital – Almost
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