ENSURING CHILDREN HAVE ACCESS TO CARE THROUGH STABLE FUNDING AND DELIVERY SYSTEMS

 

While many public policies impact children’s health care — including federal and state reforms —

Medicaid is the single public policy with the most dramatic impact on access to quality health care for Ohio’s children. Ohio’s children’s hospitals are the health care safety net for Ohio’s most vulnerable children, and our number-one priority is to ensure Medicaid funding remains stable.

 

Ohio Children’s Hospitals Have a Disproportionately High Share of Medicaid Patients

 

When compared to general hospitals, Ohio’s children’s hospitals have a disproportionately high share of Medicaid patients, and the caseload continues to grow. Consider that in 2007, 43 percent of children’s hospital patients were reliant on Medicaid, growing to 50 percent in 2008. This shift contributed to a 26 percent increase in annual children’s hospital Medicaid losses, which totaled $202 million in 2008. This loss occurred even after accounting for beneficial funding programs such as the Hospital Care Assurance Program and Children’s Hospital Supplemental Medicaid payments.

 

Every one percent shift in patient caseload from commercial insurance to Medicaid represents an additional $2 million to $7 million annual loss for a children’s hospital in Ohio, depending on hospital caseload. Without stable public sector funding, Medicaid payment shortfalls will make it impossible to continue to provide high quality health care to all children.

 

Current Medicaid Funding Structure for Ohio’s Children’s Hospitals

There are three critical Medicaid funding mechanisms for children’s hospitals in Ohio: Medicaid reimbursement rates, supplemental Medicaid payments and the Hospital Care Assurance Program. Providing care to Ohio’s Medicaid-reliant children costs children’s hospitals $834 million per year (2008), but the current funding mechanisms reimburse just $632 million to children’s hospitals (2008) as follows:

 

·         Medicaid reimbursement rates: These are the rates at which the state reimburses providers for the services they provide. Generally, these rates remain well below the actual cost of providing care in Ohio, and are on average 40 percent less than Medicare reimbursement rates. ($575 million per year—2008)

 

·         Children’s Hospital Supplemental Medicaid payments: Recognizing the unique role Ohio’s children’s hospitals play in providing critical care for Ohio’s children, the state’s legislative and executive bodies have provided supplemental funding on a bipartisan basis since 2005. This funding helps to defray some of the higher costs associated with devastating illnesses (such as childhood cancer, premature birth, autism and cystic fibrosis) and is paid to hospitals based on caseload data. ($6 million GRF, drawing $11 million in matching federal dollars, for a total of $17 million per year—2008)

 

·         Hospital Care Assurance Program (HCAP): HCAP funding, which is Ohio’s Disproportionate Share funding mechanism, provides partial relief for the significant Medicaid losses and uncompensated care incurred for service to this vulnerable population of children. ($40 million—2008)

 

 

funding chart

 

 

 

 

 

 

The Hospital Assessment 

Ohio’s FY 2010-2011 budget includes a new Hospital Assessment, which will cost Ohio’s children’s hospitals $55.188 million each year. The five percent Medicaid rate increase and Upper Payment Limit Expansion is estimated to return approximately $53.054 million to Ohio’s children’s hospitals, leaving an estimated shortfall of $2.134 million. For every dollar of assessment, 96 cents is returned to the children’s hospitals.

  

OCHA Facts

  • More than 1/3 of all Ohio children rely on Medicaid for their health care needs.
  • Children account for 53 percent of the Ohio Medicaid caseload, but only 14 percent of total Medicaid spending.
  • According to the Kaiser Family Foundation, roughly 71% of Ohio's uninsured children are eligible for Medicaid but are not signed up for the program.