Counties fight to keep federal indigent fund share

CMI Staff

The Dr. Dan C. Trigg Memorial Hospital in Tucumcari is one of many New Mexico rural hospitals that could face severe funding shortages if their counties lose money for providing care to the poor.

The cash is applied to obtain three times as much in federal matching money.

The Legislature is wrestling with the problem in the final week of its 30-day budget session. It is considering a bill designed to restore some control of the money to counties.

Trigg Hospital is threatened with funding cuts beyond $2 million lost between 2012 and 2013, administrator Lance Labine said. The hospital’s indigent care funding dropped from $4.1 million in 2012 to $2.1 million in 2013, due to cuts in Medicaid reimbursements from federal sources.

“Further reductions would be crippling,” Labine said.

Late last year, the state’s Human Services Department replaced the state’s Sole Community Provider program, which allowed the counties to control gross receipts tax funds for indigent care with a state-run Safety Net Care Pool fund.

In 2011, the Sole Community Provider program provided $278 million to New Mexico hospitals, according to Presbyterian Health Services, which owns Trigg Hospital. The safety net program resulted in payments of only $159 million to hospitals last year, Presbyterian said, about 40 percent less than the 2011 allocation.

With the safety net fund coming up short, the legislature is looking for a way to make up the shortage and redirect some of the flow of federal matching cash back to counties.

Senate Bill 268 would allow counties to fund the state Safety Net Care Pool with the equivalent of a 1/12 of 1 percent county gross receipts tax increment. The counties could draw from any authorized funding source available to them, according to a New Mexico Association of Counties “talking points” document.

The counties, then, would receive directly the matching money — what the association of counties advocates — while providing needed funding to the safety net program.

Labine said Trigg may lose more of its matching cash, but is fortunate to have a source of the local portion already in place. A special gross receipts tax renewed last year by county voters could reduce the effect of having to return the 1/12 of 1 percent share to the state, Labine said, but there still may be a serious loss of money.

“Counties have always participated in sole community provider funding,” said Quay County Manager Richard Primrose. “We have always paid our share, so we get our 3-to-1 match.”

The senate bill would allow the counties to pay into the new safety net pool, as HSD is demanding, but directly receive the matching cash. The 1/12 percent is a compromise between the 1/8 percent tax counties originally sought in order to maximize their federal funding, Primrose said, and HSD’s proposal of only 1/16 percent.

In Clovis, Presbyterian Regional Medical Center Administrator Hoyt Skabelund said hospitals have already been hit hard with reductions in Medicare and Medicaid reimbursement rates.

“New Mexico payments from Medicare are already the lowest in the nation,” Skabelund said. “Some hospitals lose money with every Medicaid patient they treat. The fund sort of compensated for that.”

Skabelund said PRMC can receive a generous amount of help for the indigent population the hospital serves with the federal funds — about $5 million — because the new formula for the Safety Net Care Fund would largely base payouts by the Medicaid patients hospitals see.

In Portales, Roosevelt County General Hospital President Larry Leaming said there’s no question the funding gap needs to be solved.

Leaming said while RGH will certainly struggle if it doesn’t receive the indigent funds, he’s more concerned for the small rural hospitals on the eastern side of the state who are at risk of closing because of this issue.

“The state has to figure out how to fund the match,” Leaming said.

But while county officials see the importance of funding the pool, they say the state will do it at the county’s expense, taking the money from local indigent funds.

Roosevelt County Manager Charlene Webb said she thinks the state’s Human Services Department is threatening to cut funding to other programs, such as the DWI Program, if the counties don’t fork over the 1/8 percent tax.

“They’ve kind of put us in a corner,” said Webb. “What’s really frustrating about this is we did not screw this up. We’re going to suffer for the lack of decision making.”

Curry County Manager Lance Pyle said if the state intercepts the 1/8 percent tax collected, it would leave no money for the county to operate its indigent program. It pays for other primary health care clinics to include dental services as well as indigent burials.

“My feeling is this tax was passed locally and it’s collected locally. I think local government should have control on how those funds are spent in their communities as the funds are generated locally,” Pyle said. “It’s a very important issue, right now going through the session, it is the biggest issue for Curry County.”


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