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Beyond the Bottom Line – Episode 2

Beyond the Bottom Line – Episode 2

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 Potential Impacts of Medicaid Funding Cuts on Providers With Host Kevin Chmura, CEO of Panacea Healthcare Solutions and Guest Brian Herdman, Director Financial Reimbursement Services In this episode of Beyond the Bottom Line, Let’s Talk Healthcare Finance, Revenue Cycle and Compliance, host Kevin Chmura, CEO of Panacea, is joined by Brian Herdman, Panacea’s Director of Financial Reimbursement Services, as they discuss the House Republican budget plan’s mandate to reduce spending from a variety of programs, including Medicaid With cuts of approximately $880 billion in funding over the next ten years, find out what programs are likely to see a reduction. Episode transcript available below. Kevin: Hi and welcome to this episode of Panacea’s new podcast Beyond the Bottom Line. I’m your host, Kevin Chmura, CEO of Panacea Healthcare Solutions. In today’s episode, we’ll be discussing a very important and timely topic for every healthcare provider, particularly hospitals, and that’s Medicaid funding and potential changes proposed by the new Congress and endorsed by the administration. We’ll also cover some practical steps you can take today that will help regardless of which of these proposals are adopted, or even if none of them are. I’m joined today by Brian Herdman, Panacea’s Director of Financial Reimbursement Services. In addition to Brian’s day job at Panacea, helping hospitals maximize financial performance, he also leads our efforts to monitor the regulatory environment and position Panacea to best help our customers navigate those waters. Brian, welcome to the show. Brian: Thank you, Kevin. Glad to be here. Kevin: Cool. So a lot going on in the world right now, a lot going on in healthcare. There always is, but whenever there’s a changeover in administration and a new Congress coming in, there’s always a lot going on. So particularly wanted to dive in today, the House Republican budget plan, which was endorsed by President Trump in February, includes cutting approximately $880 billion of funding over the next 10 years from a variety of programs. To put that into perspective, for anybody listening in 2023, which is the most recent full year data we have across the entire country, we spent 170, I’m sorry, $872 billion in Medicaid funding. So in other words, we’re eliminating an entire year’s worth of funding over the next 10 years, or roughly 10%. But given the rise in health Medicaid spending since the onset of the ACA, the number’s actually much bigger than 10%, because we only reached 872 billion in 2023. It was much lower than that over the years prior to that. So what I’m getting at, it’s a really big number. It’s a really big number that’s potentially coming out. There are some estimates for some extended proposals that take that number into the trillions, though perhaps, maybe unlikely. So Brian? I know you. You immerse yourself in this as part of your part-time job with us. And so I know you’ve looked at this and you’re advising our customers through it. What are some of the key things that you’re paying attention to in the proposals that are out there right now? Brian: Hey, Kevin. So as I’m looking at this proposal, if you look at the actual legislative text you mentioned, there’s not really a whole lot to go off of, just a mandate to reduce spending. So there’s no real specific policy behind it. So from there you have to look at what has been proposed in the past and what people are complaining about on the campaign trail and other things. So when you look at these proposals, you know, one thing that bumps out right away is tweaking the dial on the federal match that the federal government pays out the states. This could be program specific. You know the Medicaid expansion population gets a much richer match from the feds, so that might be something that gets reduced down. Or there could be across the board decreases in that federal match. One thing that comes up a lot is block grants. Possibly converting those Medicaid payments into per capita amount so that those are more inflation adjusted from the get-go. And they’re not really going to be determined by how the state spends that money. And even there’s some other piles of money that the feds do matching on that could be eliminated there. Nearly every state has some kind of provider tax that brings money into their state Medicaid program that is matched by federal dollars. Some of this is small and some of this is significant. In some states, it’s very significant, with hundreds of millions of dollars moved around and appropriated back to hospitals, nursing home, etc. With matching dollars from these programs, so any of them are ripe for reduction. And it could be a little bit of this could be a little bit of that, but there’s a lot for the Congress to choose from. Kevin: Yeah, totally. And when you get into entitlement spending, it becomes highly politicized and ...
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