Gov. Reeves announces payment initiatives for Mississippi hospitals

Governor Tate Reeves has announced a series of sweeping Medicaid reimbursement reforms in Mississippi that are anticipated to generate an estimated $700 million for hospitals throughout the state.

Reeves made the announcement on Thursday afternoon, stating that the move includes two hospital payment initiatives that will provide millions in additional Medicaid funds for hospitals each year.

The first initiative — known as the Mississippi Hospital Access Program (MHAP) — will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system.

With the directed payments, hospitals would be reimbursed near the average commercial rate, which has been considered the federal ceiling for Medicaid reimbursements in managed care.

“The overall shift is significant,” Reeves stated. “This will occur not only in this fiscal year but on an ongoing basis and will provide long-term funding for Mississippi hospitals.”

The second initiative will supplement Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit (UPL).

The payment mechanism is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the Mississippi Division of Medicaid earlier this calendar year.

“This funding will have a profound impact on the bottom line of state hospitals, both large and small,” Reeves explained.

To minimize the recurring impact of state general fund expenditures, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.

Hospitals are projected to net an increase of $689 million through the initiatives, after accounting for the funds the hospital made to help finance the initiatives.

The federal Centers for Medicare and Medicaid Services (CMS) must approve both proposals, which are currently being submitted. If approved, both would be effective immediately.

The following hospitals are anticipated to be impacted by the new initiatives:

The University of Mississippi Medical Center – Over $66 million or 50 percent increase
Forrest General Hospital – Over $53 million or 337 percent increase
Singing River Hospital – Almost $34 million or 233 percent increase
Delta Regional Medical Center – Over $15 million or 259 percent increase
Greenwood Leflore Hospital – Over $10 million or 138 percent increase
Southwest Mississippi Regional Medical Center – Almost $17 million or 213 percent increase
Bolivar Medical Center – Over $9 million or 208 percent increase
South Central Regional Medical Center – Over $21 million or 262 percent increase
North Mississippi Medical Center – Over $33 million or 115 percent increase

“This funding will provide a major boost for county hospitals as well as for private institutions,” Reeves added. “These changes will come at almost no cost to Mississippi taxpayers. Through an assessed change to the fee that providers pay, we will be able to draw down increased federal funding with the formula changes.”

Reeves also called for prior authorization reform and announced that a working group on health issues will continue to meet to discuss further reforms in the state.

The working group is comprised of the Mississippi Healthcare Collaborative, the Mississippi State Department of Health, the Mississippi Division of Medicaid, and a representative from Reeves’ office.

“The plan that I’m announcing today is a result of the hard work of the folks standing behind me,” Reeves said. “Over the last four to five months, we’ve worked to put together a proposal that we believe can have a real impact on Mississippi hospitals.”

The list of medical professionals includes: