Federal government approves part of Mississippi’s plan to help struggling hospitals

December 18, 2023

WXXV Staff,

Updated 1:05 PM CST, December 13, 2023

JACKSON, Miss. (AP) — The federal government has approved the first part of Mississippi’s plan to help some of the state’s financially strapped hospitals receive more Medicaid money, Gov. Tate Reeves said Wednesday.

The Centers for Medicare and Medicaid Services approved part of the proposal Reeves released in September, in which hospitals would pay higher taxes so the state could draw more federal Medicaid money. The governor’s statement didn’t say how much more the hospitals will pay collectively in taxes, but he said the changes would generate about $689 million, which would be split among hospitals in the state.

“This is the product of meetings with a range of medical professionals and healthcare leaders, and I’m truly thankful to all of them for helping to get us to today,” Reeves said in a news release.

Mississippi has 73 rural hospitals. Six have closed since 2005, and 31 are at immediate risk of closing because of severe financial problems, according to a national policy group, the Center for Healthcare Quality and Payment Reform. Only Texas, Kansas and Oklahoma have more hospitals in that risk category.

Under the component of the plan approved by CMS, hospitals will be reimbursed near the average commercial rate for services provided through managed care, the primary delivery system for Medicaid enrollees. That average rate has been considered the federal ceiling for Medicaid reimbursements in managed care, Reeves said.

A second plank of the plan, still awaiting approval from CMS, would also increase Medicaid hospital reimbursement in fee-for-service health care. That refers to a way of delivering health care where providers are paid for each particular service they provide.

Reeves, who was reelected in November, released the proposal after his Democratic opponent had spent months criticizing him for refusing to expand Medicaid to people working jobs that pay modest wages but don’t offer health insurance coverage. Mississippi is one of 10 states that have not taken the option, all of them led by Republican governors, Republican-controlled Legislatures or both.

The state economists have said Mississippi could receive about $1 billion a year from the federal government for Medicaid expansion. Reeves and other expansion opponents have said it would not be the best approach to alleviating financial pressures on rural hospitals.

The Mississippi Division of Medicaid will deliver the first round of payments to hospitals in the coming weeks, Reeves said.