Deal reached on Medicaid payments

Art Nadler

Thursday, April 29, 1999 | 11:53 a.m.

University Medical Center and the state have reached a tentative agreement on payments for Medicaid patients that will bring the hospital $16 million over the next six years, the hospital administrator said Wednesday.

The agreement, signed Tuesday with the state Department of Human Resources, ends a $22 million lawsuit the hospital filed over treatments provided to Medicaid patients from 1993 to 1998, Bill Hale, chief executive officer of UMC, said.

UMC will receive $6 million retroactively and $2 million a year until 2004 under the settlement, which must be approved by the state Legislature. The case had gone to the state Supreme Court, where justices had ordered the state and UMC to try to reach a settlement.

Medicaid payments will not change for other hospitals. The settlement recognizes that UMC provides services that are more expensive than other hospitals because of its graduate medical education program and the trauma unit, Charlotte Crawford, director of the Department of Human Resources.

However, Crawford said, other hospitals may ask to have their rates reviewed in light of the settlement.

The settlement's formula relies on federal matching funds, Hale said. It will require the Legislature to approve $2 million by May 31. Hale said he will then ask the Clark County Commission, which acts as the hospital's board of trustees, to approve a transfer of $2 million in county funds to the deal.

Then the federal government, through the Health Care Financing Administration, will be asked to match the state and county funds with $4 million by March 31, 2000, Hale said.

Once the $8 million is secured, Hale said, the county will be paid back its $2 million, which will leave the hospital with its initial payment of $6 million. The state then will follow with yearly $2 million payments through 2004.

"I'm pleased that the state and UMC have reached an agreement, and we look forward to working together in the future," Hale said. "We've always claimed that we are adversely affected by the Medicaid rates because our costs are higher than other hospitals. I'm pleased that we have reached a tentative agreement."