Equitable formula proposed for state indigent care

Erin Neff

Wednesday, Aug. 21, 2002 | 9:49 a.m.

A consultant told a legislative committee Tuesday that Nevada can come up with a formula to equalize distribution of funds for indigent care to hospitals.

Peter Burns, senior consultant with EP&P Consulting, conducted a study of programs and funding for the treatment of Medicaid indigent and other low-income patients for the Legislative Committee on Health Care.

The committee, chaired by Sen. Ray Rawson, R-Las Vegas, took no action on the report Tuesday, deciding instead to analyze the data and come up with suggestions at a future work session.

"We have to establish what's a reasonable policy," Rawson said.

The study was spawned by Senate Bill 377 after years of legislative fighting over the allotment of Medicaid money to different Clark County hospitals.

EP&P's analysis estimates the total gross indigent care costs at $279 million statewide, with $191 million of that spent in Clark County. University Medical Center, the only public hospital in Clark County, accounted for $122 million of the county's total.

But Burns did not include UMC's Quick Care units in his analysis -- a factor that might have added millions to UMC's total.

"It didn't appear that those centers were designed to handle indigent care per se," Burns said.

UMC's $122 million in gross indigent care costs are nearly 39 percent of the hospital's operating revenue. Lake Mead Hospital Medical Center had $12.7 million in indigent care costs, accounting for nearly 26 percent of its operating revenue, and Sunrise Hospital and Medical Center had $26 million in costs, making up 7 percent of its revenue.

Burns suggested a complex formula for equalizing distributions of Medicaid based on matching funds and intergovernmental transfers and allowing certain hospitals to "catch up" to others over a series of years.

Five pools would be established statewide, including ones for Clark County private hospitals and Clark County public hospitals. The money in the pools would then be distributed based on the percentage of uncompensated costs each hospital had -- a method that would help "buy down" each hospital's uncompensated costs.

For example, Lake Mead Hospital received $677,000 in allocations for the state's 2002 fiscal year, bringing its percentage of indigent costs to revenue down to 10.8 percent. A subsequent allocation of $526,597 would reduce the percentage to 9.7 percent.

Money could be generated by asking other hospitals with lower percentages to reallocate some of their past money back into the pool.