Minnesota hospitals hoped for a $1 billion windfall, but the OBBBA has killed their plan

WASHINGTON Minnesota s hospitals thought they had a great idea to increase the money they receive for treating Medicaid patients by leveraging federal dollars But the One Big Beautiful Bill Act threatens to shred that plan and is even likely to kill it outright The at-risk proposal was approved by the state Legislature in June and hospitals hoped it would bring them billion in increased revenues every year The Minnesota Hospital Association developed the plan to boost hospital revenues because they lose money on every Medicaid individual they treat A review by the American Hospital Association identified that hospitals were paid just cents for every dollar spent caring for Medicaid patients who qualify for the activity because they have low incomes It s a arduous situation for hospitals because Medicaid pays us below cost mentioned Joe Schindler vice president of finance protocol at MHA So the association came up with a proposal to increase those payments About states have similar programs called provider taxes or directed payments to leverage federal dollars to increase money received from treating Medicaid patients Related Seismic Medicaid changes will be rough on rural hospitals We were trying to fund our way out of a financial mess Schindler stated The cost of the Medicaid venture known as Health Assistance in Minnesota is shared between the state and federal governments That means the federal regime is required to contribute a percentage of the cost of Medicaid In Minnesota it averages at about Boosting the cost of Medicaid payments to hospitals and other anatomical providers forces the federal ruling body to pay more for Medicaid services Under one provider tax scenario states recoup their part of the cost share by taxing those hospitals and therapeutic providers for the state s share of the cost As of now Minnesota implements a hospital surcharge that applies to outpatient and inpatient services Another provider tax in the amount of applies to both hospitals and a long list of other healthcare services That tax funds the MinnesotaCare plan a state wellbeing care campaign for Minnesotans with low incomes but whose incomes are too high to qualify for Therapeutic Assistance The new hospital provider tax approved by the Legislature earlier this year would raise the total surcharge to hospitals to Yet the plan to raise hospital provider taxes ran into trouble when the One Big Beautiful Bill Act banned new provider taxes and capped existing provider taxes at for states like Minnesota that expanded Medicaid services under the Affordable Care Act The previous caps on provider taxes for states like Minnesota was A rip off of taxpayers Although permissible by law certain say provider taxes are a way to event the system The conservative Paragon Physical condition Institute argues that these provider taxes are a taxpayer rip off that create loopholes and a lack of transparency Minnesota was hoping to collect about million annually in taxes from hospitals and use the money and the federal match to increase the payments hospitals receive from treating Medicaid patients So the new million hospital tax would raise billion in federal reimbursements to hospitals But the plan had not been approved by the Centers for Medicare and Medicaid Services CMS by July of this year when the federal budget bill was signed by President Donald Trump into law banning new provider taxes and directed payment plans which are similar procedures to leverage federal dollars The Minnesota Department of Wellbeing commented it advised CMS of its intent to levy the new provider tax on July a day before the deadline The new cap on provider taxes does not go into effect until But states like Minnesota are required to start bringing them down in The Minnesota Hospital Association hoped the new tax could be implemented both fully or in part until But CMS has not given the state a go ahead If the state is permitted to implement new taxes that were authorized in the session those taxes may need to be reduced starting in according to the schedule described in federal statute the Minnesota Department of Robustness reported in a report The Department of Strength also announced the state has not yet determined how that process would work because additional guidance is expected from CMS Schindler disclosed rural hospitals and others with large percentages of Medicaid patients are going to feel the majority pain and that Minnesota hospitals may have to curtail services including eliminating labor and delivery and mental wellness services Hospitals are also stressed by inflation and escalating labor costs that are rising faster than Medicare and Medicaid reimbursement rates The OBBBA established a billion Rural Medical Transformation Undertaking to stabilize rural hospitals by providing funding for workforce shortages and infrastructure But Schindler mentioned the plan will provide a token amount of money to solve rural hospital woes The only chance Minnesota s hospitals have to leverage more money from the federal governing body is for Republicans in Congress to agree to repeal all of the Medicaid-related provisions in the OBBBA something Democrats want in return for backing of a GOP stopgap bill that would reopen the shuttered federal establishment But that s not likely to happen So for now Minnesota s hospitals and hospitals across the nation are waiting for CMS to finalize the new regulations on provider taxes mandated by the federal budget bill A lot of people and states don t know how this is going to work out reported Alice Burns associate director of the Kaiser Family Foundation s undertaking on Medicaid and the Uninsured Coupled with the OBBBA s Medicaid cuts which are expected to consequence in an increase of uninsured patients at hospital emergency departments and other federal cuts to healthcare care the crackdown on provider taxes are expected to shake the financial stability of several American hospitals The effect will be big Burns predicted But we don t know when and where we ll start to feel them Couldn t take the jeopardy One of the majority financially vulnerable hospitals in the state is Hennepin Healthcare in Minneapolis It is considered a safety net hospital that serves a large number of low-income and uninsured patients About of its patients are covered by Medicaid Yet Hennepin Healthcare decided it would be the only one of the state s hospitals to not participate in the Minnesota Hospital Association s new provider tax plan We wished to but couldn t take the liability declared Charles Ester the hospital s vice president of finance The reason Hennepin Healthcare already had its own plan which has been to leverage more Medicaid money from the federal ruling body which has been given the green light by CMS since its inception in Related Emmer spins Dems Medicaid position in casting blame for shutdown Ester reported the hospital was loath to give up its plan in favor of a new one that might not pass muster with the Trump administration especially since the implementation of the OBBBA All of Minnesota s Biological Assistance patients have managed care plans That means they get their strength care through privately run plans that contract with specific networks of doctors and hospitals to provide services at reduced rates But Hennepin Healthcare pays the state a tax every month on its Diagnostic Assistance revenues money that is boosted by the federal match and is paid in the form of higher premiums to managed care companies In turn hospitals receive higher payments from managed care companies for their medication of Medicaid patients Ester reported he hopes Hennepin Healthcare made the right choice in keeping its current plan to increase Medicaid reimbursements But since that plan must be approved every year by CMS he has chosen doubts The one thing that we don t have is certainty Ester reported The post Minnesota hospitals hoped for a billion windfall but the OBBBA has killed their plan appeared first on MinnPost