TAHLEQUAH — While the Patient Protection and Affordable Care Act stands to create job growth in the health care industry, many hospitals may take a hit to the bottom line when it comes to payments from Medicare and Medicaid.

Tahlequah City Hospital President and CEO Brian Woodliff said the hospital has always supported better access to health care, and that the law may ease the pressure on the local hospital’s overburdened emergency room.

“TCH has always been a proponent of better access to health care for all,” said Woodliff. “That means affordable local access to primary and specialty care. We are very aware of the lack of insured and the underinsured in Northeast Oklahoma.”

According to Woodliff, TCH is treating twice the patient volume in its emergency room compared to a decade ago.

“The 25,000 emergency room visits [per year] are a reflection of the core problem PPACA is attempting to address,” said Woodliff. “This population is nearly 40 percent Medicaid or uninsured. It also consists of nearly 80 percent of non-emergency conditions. THC’s emergency room is serving as a safety net for this population.”

Woodliff said TCH administrators are cautiously optimistic about the federal and state government’s ability to pay for everyone who cannot afford insurance to be covered.

“TCH will be doing its part to help,” said Woodliff. “U.S. hospitals are subject to more than $500 billion in cuts from Medicare and Medicaid, with the promise of more covered lives. TCH has also loaned over $1 million through a ‘provider fee’ to the Oklahoma Health Care Authority, [the state’s Medicaid program] to allow for the health care needs of those living below the federal poverty level.”

A recent report by Bob Spoerl, of Beckers Hospital Review, reiterated Woodliff’s assertion that many hospitals are facing cuts in Medicaid payments.

“Anticipating a rise in the number of lower income Americans insured, the PPACA included cuts to disproportionate share hospital funding,” wrote Spoerl. “Those cuts could be from 25 percent to 50 percent reductions in federal money beginning in 2014. Safety net hospitals need to prepare for Medicaid cuts. In states that may choose to opt out of Medicaid expansion, the issue may be more severe.”

Oklahoma is one of several states that have filed federal lawsuits, resisting Medicaid expansion and the creation of health insurance exchanges.

In Spoerl’s report, attorney Susan Feigin Harris, partner in the Baker Hostetler Healtcare Practice Group, addressed some state’s decision to opt out of Medicaid expansion.

“For providers, this calls into question the potential success of the PPACA’s intent to eliminate a large chunk of the uninsured – some 16 million Americans,” said Harris in the report. “If a provider’s state chooses to forgo the expansion, a provider could still be faced with significant numbers of uninsured patients and experience Medicaid payment shortfalls.”

Under PPACA, hospitals will also be required to examine and cut waste and inefficiency. Woodliff said TCH is well-known for its high level of performance, but the new regulations add to the overall cost of care.

“TCH has been a standout quality provider for years,” said Woodliff. “We are known by those in the industry for our Joint Commission on Accreditation of Health Care Organizations scores of 98 and 99, which have been unmatched in the state. But, the PPACA adds a tremendous amount of regulatory burden on hospitals. For those that are not performing in the 50 percent [range], penalties will be applied by deductions from Medicare and other payors. These regulatory measures have added to the costs of providing care. TCH has added sophisticated IT equipment and software, clinic staff in regulatory roles, and consultants and vendors to insure the best results in these unfunded mandates.”

While addressing concerns about new regulations and potential cuts in federal and/or state funding, Woodliff also believes TCH’s growth over the past few years has set them on a path to success.

“The TCH Board of Trustees has been very visionary,” said Woodliff. “They have grown the institution tremendously over the past 10 years, adding more than 500 additional employees and 40 full-time physicians, while improving revenue by more than $150 million annually. They have proven effective in governing the challenges facing hospitals. They believe that growth will continue, and will manage TCH’s response to PPACA similarly.”

Woodliff said, if the PPACA is fully implemented, the hospital believes there should be a greater demand for local primary care.

“To address this, TCH and the Cherokee Nation have partnered to begin training for primary care physicians and extenders,” said Woodliff.

 

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