By Peter Hancock

January 14, 2015, 5:36 p.m. Updated January 14, 2015, 10:12 p.m.

http://www2.ljworld.com/news/2015/jan/14/rural-hospitals-plead-medicaid-expansion/

TOPEKA — Kansas hospital officials told a legislative committee Wednesday that they face tremendous economic challenges if the state does not expand Medicaid as allowed under the Affordable Care Act.

"We’re in the roughest time we’ve ever been in," said Dennis Franks, CEO of Neosho Memorial Regional Medical Center in Chanute.

Franks was among several people who testified Wednesday before the House Vision 2020 Committee, which is chaired by Rep. Tom Sloan, R-Lawrence. That committee is generally charged with conducting long-term studies of issues that normally don't get the attention they need in a regular 90-day session, Sloan said.

Sloan said he hopes to develop a "Kansas solution" for expanding Medicaid that will pass the conservative-dominated Legislature.

But the hearings began barely two months after a general election, when many Republicans campaigned on their opposition to the Affordable Care Act, also known as ObamaCare. And as soon as the hearings began GOP House leaders quickly started pushing back.

"That's not a health committee," said House Speaker Ray Merrick, R-Stilwell, when asked whether he would allow a Medicaid expansion bill to be debated on the floor of the House. "We have committees where that stuff goes through."

But Sloan appeared to be trying to win over support from conservative lawmakers by focusing the first hearing on the impact that not expanding Medicaid has on rural hospitals.

Franks said his hospital serves about 42,000 people in a four-county area in southeast Kansas where 12.5 percent of the population is uninsured and 32 percent of all children live in poverty. He said the cost of providing charity and uncompensated care at Neosho runs about $1.4 million a year.

“It is a battle out there," Franks said. "We are under siege from the federal government, and from state government.”

The problem for Neosho hospital, and for many rural hospitals, officials said, is that the Affordable Care Act is financed in part with a reduction in hospital payments from Medicare, the federal health insurance program for the elderly.

That was supposed to be offset by increasing the number of people with insurance, through expanded Medicaid and subsidized private insurance sold through exchange markets, thus lowering the amount of money hospitals lose through uncompensated or charity care.

Under the law, the federal government pays almost all of the cost of covering those who become eligible for Medicaid due to the expansion.

The Kansas Hospital Association has estimated that Kansas will forgo $380 million in federal funding this year by not expanding Medicaid.

The law originally required states to expand Medicaid — the joint state and federal insurance program for the poor — to cover everyone in households with incomes up to 138 percent of the poverty level. But the U.S. Supreme Court overturned that provision and said that Congress could only make Medicaid expansion optional for states.

Kansas is one of 22 states that so far have declined to expand their Medicaid programs.

Mike Larkin, executive director of the Kansas Pharmacists Association, said the ruling has divided the country into what he called the "have states" and "have-not states." In the have-not states like Kansas, he said, hospitals are seeing the reduced Medicare reimbursements, but they are not seeing an increase in patients who have health insurance.

Chad Austin, a lobbyist for the Kansas Hospital Association, said rural hospitals are hit especially hard by that because a larger share of their patients are covered by Medicare.

"We have an older population, more elderly population, that has some different challenges associated with that," Austin said.

Rep. Barbara Bollier, a moderate Republican from Mission Hills and a physician, said she thinks a Medicaid expansion bill could pass this year if it's presented in a way that conservatives might accept.

"We have a budget crisis. Expanding Medicaid would actually help that. So in the end, I think this will have to be part of the discussion.

Freshman Rep. Shannon Francis, R-Liberal, said expanding Medicaid might be good for the hospitals in his district, but he's not sure whether voters in that conservative part of southwest Kansas are ready to accept it.

"I'm not sure there's a consensus yet in my community," Francis said.