Memorial Hospital, SRHS to sue Department of Medicaid over funding formula

Memorial Hospital, SRHS to sue Department of Medicaid over funding formula
Galloway pled guilty to one count of Possession with Intent to Distribute Methamphetamine on Feb. 6, 2018. (Photo source: WLOX)

SOUTH MISSISSIPPI (WLOX) - Memorial Hospital and Singing River Health System are suing the Mississippi Division of Medicaid over what they call a flaw in the state's funding formula.

The health systems claim the payment formula, which is meant to reimburse community hospitals for treatment of the uninsured and Medicaid beneficiaries, left them underpaid by more than $20 million in 2016.

The health systems said in a news release Wednesday reimbursement funds at the state level are available through payment programs managed by the state division of Medicaid, but the way the funds are distributes is flawed.

"In their current form, Medicaid payments as well as prior formulas for indigent care have created a scenario of winners and losers with funds unevenly distributed among providers," said Kevin Holland, CEO of SRHS.  "While our coast hospitals are losing tens of millions in funding for low income patients, other providers in the state have actually enjoyed a windfall that exceeds their costs of care, which is unfair."

The Mississippi Division of Medicaid released this statement Wednesday afternoon:

Medicaid is a key component to health-care access across the state. The agency follows state law and federal regulations set forth in the State Plan, which is approved by the Centers for Medicare and Medicaid Services.

The lawsuit seeks to change the funding formula and recover the $20 million in reported underpaid Medicaid funds.

"Over the past several years, we've been in communication with federal and state officials as well as the Division of Medicaid regarding these underpayments and the flawed funding formula. Federal agencies have agreed with our findings but at the state level where the funds are issued we have been unable to reach a resolution," says Memorial Hospital President/CEO Gary Marchand.  "We have no choice now but to file suit to protect access to healthcare services."

According to the news release, Harrison County has the second highest number of uninsured patients in Mississippi with 35,000. Jackson County has the fourth highest at nearly 25,000.

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