Higher fees approved for hospitals Move may help hospitals with Medicaid cuts.

November 07, 1991|By Sue Miller | Sue Miller,Evening Sun Staff

The state Health Services Cost Review Commission, which establishes rates hospitals charge to patients, has approved rate increases that will range as high as nearly 6 percent at one Baltimore hospital.

At a meeting yesterday in West Baltimore, the commission moved swiftly to help bail out 51 Maryland hospitals from a new wave of bad debts triggered by Gov. William Donald Schaefer's cuts in the state Medicaid program.

And the commission's work in raising hospital fees is not complete, said John Colmers, the executive director. A proposal that will spread the burden of these bad debts more equitably among hospitals across the state is being readied for action by the commission early next month.

Yesterday, the commission approved rate hikes that will range from as high as 5.64 percent at Church Hospital in Baltimore to 0.31 percent at St. Joseph Hospital in Towson.

The new rates will be retroactive to Nov. 1, the day that state Medicaid coverage for disabled and poor inpatients was halted.

Other high rate increases also were authorized for Bon Secours Hospital -- 5.01 percent; Liberty Medical Center -- 4.69 percent; University of Maryland Medical Center -- 4.57 percent; Francis Scott Key -- 3.78 percent; Maryland General Hospital -- 2.94 percent; Mercy Medical Center -- 2.67 percent and Johns Hopkins -- 2.15 percent.

The new rates are expected to generate a total of $44.8 million VTC over the next eight months in funds that now will come from patients who can afford to pay for care rather than from the state's Medicaid program which is funded through sales taxes and income taxes.

"I think the reason the commission acted as promptly as it did was to insure that hospitals had the incentive to provide inpatient care to these indivduals," Colmers said.

"But, I do think our rate action does put hospitals with higher rates at a competitive disadvantage solely because they are treating a larger proportion of these patients," Colmers said. "And, for that reason, we ought to consider developing something more equitable, like a pooling mechanism."

A pooling strategy would assure that certain geographical areas, primarily Baltimore, but also Prince George's, Dorchester and Charles counties, would not be disproportionately affected by the Medicaid cuts and that hospitals in those areas could remain competitive.

Such a mechanism, said to be in effect in New Jersey and Massachusetts, would have to be developed "very carefully because it is a fairly complicated process and would have to be crafted in such a way that it retains cost-effective standards," Colmers said.

And, it would require General Assembly action. Colmers said he hopes to have the proposal ready for the upcoming session, which opens in January.

The rate action fills immediate needs -- continued access to inpatient care for at least 28,000 individuals who were victims of the budget ax and an uninterrupted flow of hospital reimbursement in a depressed economy.

Specifically, the budget cuts eliminated reimbursement for individuals who do not work fulltime, have a temporary medical disability and get general public assistance checks and others who do not have the income or the assets to pay their medical bills.

The higher the rate, the more a hospital will be permitted to charge for services. But, by doing so, a hospital can lose what Colmers describes as "its competitive edge."

After the meeting, Robert A. Chrensik, senior vice president for finance and systems at the UM Medical Center, warned that when Baltimore hospitals are no longer competitive, they could be bypassed by patients and insurers, Health Maintenance Organizations (HMOs) in particular.

St. Joseph and the Greater Baltimore Medical Center, both in Towson, for example, would be beneficiaries of those shunning high-cost Baltimore hospitals, Chrensik said. Like St. Joseph, GBMC has gotten a lower than average rate increase. The average is 1.74 percent. GBMC rates went up 0.92 percent.

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