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Hospitals on board with early opt-in for Medicaid

WILLMAR -- Regardless of the politics surrounding Minnesota's expansion of the Medicaid program, hospitals in Minnesota mostly welcome the move.

The measure, which outgoing Republican Gov. Tim Pawlenty opposed, was one of the first signed by Gov. Mark Dayton, a Democrat, as he took office last week. It will allow early enrollment in Medicaid for about 95,000 of the poorest of Minnesotans and bring new matching federal dollars to the state.

"From a provider standpoint for hospitals, what it really does is help us leverage some federal dollars," said Mike Schramm, chief executive of Rice Memorial Hospital.

He said it will be "a tremendous benefit to the state and to providers."

Schramm gave an overview of the provision Wednesday for members of the Rice Hospital board of directors.

The fiscal impact to Rice Hospital of allowing early Medicaid enrollment for this population isn't known yet, said Schramm and Bill Fenske, the hospital's chief financial officer.

"The dollars continually move around," Fenske said.

Overall, however, it will bring $1.4 billion in matching federal funds to Minnesota to spend on health care for low-income patients.

That's on top of $1.2 billion the state will be spending out of its own coffers, plus an additional $189 million to meet the state match for the early Medicaid enrollment over three years.

In 2014 the federal government will take over Medicaid costs for people who earn less than 133 percent of the poverty threshold.

Early Medicaid enrollment in Minnesota primarily affects adults who are poor and childless. Many of them have chronic diseases, struggle with mental illness or addiction, or are homeless.

Some are currently covered by MinnesotaCare, the state's subsidized insurance program for low-income working adults. Others are uninsured. The majority, however, have been enrolled in General Assistance Medical Care, which is slated to be phased out.

Although hospitals receive low reimbursement from Medicaid, covering patients under this program is preferable than having poor, uninsured patients show up at the emergency room, Fenske said.

"We believe that's going to have a positive impact to us," he said. "Even getting paid 10 cents on the dollar is better than getting paid zero cents or two or three cents on the dollar."

It'll also mean fewer patients facing the annual $10,000 ceiling on inpatient hospital costs imposed by MinnesotaCare, he said.

Once these people enroll in Medicaid, they'll also be able to receive care at doctor's offices around the state, making services more accessible to them. Currently only four hospitals, all in the Twin Cities, have agreed to see GAMC patients for comprehensive care.

Early Medicaid enrollment isn't likely to change the overall number of Minnesotans enrolled in publicly funded health care programs. But it'll enable the state to tap into federal dollars for half the cost of covering low-income adults.

"There's a significant amount of dollars the state will be able to recoup," Schramm said.

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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