Monday, April 27, 1998 | 9:49 a.m.
CARSON CITY -- Fearing there will be irreversible financial repercussions for University Medical Center, the Clark County Commission is asking the state to delay its mandatory managed care program for needy welfare families.
The Las Vegas hospital now receives about $12 million a year in Medicaid funds for treating welfare mothers and their children. But those patients could end up in other hospitals because of the managed care program scheduled to start Oct. 1.
There has been a continuing battle between the hospital and the state Department of Human Resources which is under orders from the Legislature to begin the program.
The commission, which acts as trustee for the hospital, voted last Tuesday to ask the Legislative Committee on Health Care to wait until the 1999 Legislature convenes to make a decision on the long-delayed managed care program.
The commission directed UMC Chief Executive Officer William Hale to write the letter to the legislative committee.
"... The magnitude of these proposed changes could have an irreversible impact on UMC and the quality of patient care that is provided to Clark County constituents," Hale said in the letter.
Mandatory managed care was originally scheduled to begin in July 1995 but there have been a number of delays for different reasons. At present Medicaid patients can enter a voluntary managed care program or can continue to choose the doctor or hospital they want.
UMC treats more indigent patients than any hospital in the state. In addition to the Medicaid payments, the hospital last year received an extra $14.5 million because it cares for a disproportionate share of the poor who are unable to pay.
Under the new plan, the state will contract with private managed care organizations which will sign up welfare families. The elderly, disabled and blind on Medicaid will not be part of the mandatory managed care system.
These managed care organizations will be able to sign agreements with other hospitals to treat the patients meaning the possibility of UMC losing customers.
But state officials say that should take the burden off UMC which complains that the Medicaid rate received for each patient doesn't cover its cost. Charlotte Crawford, director of the state Department of Human Resources, said the new system will mean less loss for UMC in taking care Medicaid patients.
She said UMC is going to sue the state because its Medicaid reimbursement rate is too low.
She said she hopes that UMC can become a provider of hospital services under the new mandatory program.
"We're not out to damage UMC," she said, adding the hospital was a vital part of Nevada's medical care system.
Crawford said even though the hospital may lose clients, it should continue to get the extra disproportionate payments for treating poor people. And these payments probably won't be reduced, even if there is a smaller patient load, Crawford said.
She said Gov. Bob Miller fought hard to keep the federal government from cutting Nevada's share of the money.
Hale said UMC is reimbursed part of its costs in caring for Medicaid. For instance, he said the hospital cost may be $1,400 per day and Medicaid reimburses $1,000. If the hospital lost that patient, that $1,000 revenue would be lost. And it is used to pay some of the fixed costs, such as the building.
Hale cited a report by the Association of American Medical Colleges that said public hospitals that treat Medicaid managed care patients "are twice as likely to to have negative operating margins as those without Medicaid managed care."
Hale said the hospital is trying to hook up with a managed care organization to send its patients to UMC.
However state figures show the operating cost per day per patient at UMC is higher than the three other private hospitals in Las Vegas. That could cause questions by a managed care organization that wants to place its patients at the lowest possible cost.
The chart from the state Division of Health Care Financing and Policy, shows the average operating expense per day per patient at UMC in 1991 was $992 and last year it was $1,466, an increase of 47.8 percent. The average of the other three hospitals last year was $1,315 per patient per day. In 1991, the average cost was $997 at Desert Spring, Valley and Sunrise hospitals.
Hale said the costs are "a lot higher because we take care of sicker patients."
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