Gov. Tate Reeves on Thursday announced federal approval for part two of his 2023 proposal for increased reimbursements to Mississippi hospitals from Medicaid.
“This is another good day for Mississippi’s healthcare system,” Reeves said in a statement. “This $160 million will go a long way towards further strengthening hospitals across our state.”
Although Reeves remains adamantly opposed to traditional Medicaid expansion, which is currently being considered by the Legislature, his newly-approved initiative would make an expansion program more lucrative for Mississippi hospitals. Thursday’s announcement means Medicaid will reimburse hospitals for inpatient and outpatient fee-for-service care at Medicare rates — closer to rates commercial insurance plans pay — instead of Medicaid’s lower base rate.
Previously, the federal Centers for Medicaid Services approved Reeves’ request to pay hospitals near average commercial insurance rates for Medicaid managed care services. All told, Reeves said, hospitals will receive an estimated increase of $700 million. In exchange, the hospitals will be taxed to cover the state’s share of the increased Medicaid spending.
Reeves unveiled his proposal late in his reelection campaign as he was under fire for not having a plan to help Mississippi’s struggling hospitals. His unsuccessful opponent, Democrat Brandon Presley, made Medicaid expansion a major plank in his campaign platform.
READ MORE: Mississippi hospital officials say marketplace insurance helps, but not as much as Medicaid
Reeves has opposed, and threatened to veto, ongoing efforts by the state’s Republican legislative leaders to expand Medicaid coverage for working poor Mississippians, calling it “welfare,” even though he instigated the expanded payments to hospitals from the same federal Medicaid money.
One argument some lawmakers have made against full Medicaid expansion as 40 other states have done is that more people receiving care covered by Medicaid would mean low payments to hospitals. They said they fear full expansion of Medicaid would pull people off the federally subsidized insurance marketplace exchange, and that hospitals would end up being short-changed in payments for services.
While the plan Reeves got approved would still provide lower Medicaid payments to health providers outside of hospitals, his expanded payments would close the gap between Medicaid and private insurance reimbursements for hospitals.
Hospital officials have recently said that, under the higher reimbursements already enacted in part one of Reeves plan, Medicaid is reimbursing them at better rates than marketplace policies.
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