KHI News Service

Lawmaker hopes closure of SEK hospital spurs action on Medicaid expansion

Rep. Jim Kelly says closure should serve as warning to other communities

By Jim McLean | September 14, 2015

Lawmaker hopes closure of SEK hospital spurs action on Medicaid expansion
Photo by Mercy Hospital Independence The planned closure of Mercy Hospital Independence could create new urgency around the Medicaid expansion debate in the Kansas Legislature.

The scheduled closure of the hospital in the southeast Kansas community of Independence could create new urgency around the Medicaid expansion debate.

Advocates of expanding the Kansas Medicaid program — known as KanCare — say the additional federal money it would generate would help stabilize a growing number of struggling hospitals in the state and might have helped save Mercy Hospital Independence.

They point to estimates produced by the Kansas Hospital Association that showed expansion would have generated an additional $1.6 million in annual revenue for Mercy.

Rep. Jim Kelly, a Republican from Independence and chairman of Mercy’s board, said he hopes that the scheduled Oct. 10 closure of the hospital will spur a more serious discussion about expansion in the 2016 legislative session.

“For me and for some others, particularly in this section of the state, this will be kind of a poster that we can carry forward and say, ‘This is happening, and it’s going to spread if we don’t come up with a way to deal with health care in rural Kansas,’” Kelly said.

According to the National Rural Health Association, at least 55 rural hospitals across the nation have closed and another 283 are at risk, including as many as 15 in Kansas.

The Mercy board had hoped to strike a partnership with the neighboring Coffeyville Regional Medical Center (CRMC) to maintain some hospital services in Independence, but those talks broke down earlier this month.

“This will be kind of a poster that we can carry forward and say, ‘This is happening, and it’s going to spread if we don’t come up with a way to deal with health care in rural Kansas.’”

- Rep. Jim Kelly, a Republican from Independence

Mark Woodring, CEO of CRMC, said the proposed partnership would have been too large a financial risk for his hospital.

“We explored every option possible, it just didn’t work out,” Woodring said.

However, he said, if the state had expanded Medicaid, a solution might have been possible.

“The dollars that would have come back into (both) communities would have far exceeded the cuts that have already taken place,” Woodring said.

Starting in 2016, Kansas hospitals will lose nearly $132 million because of reimbursement reductions in Medicare and other federal programs, according to an analysis done by the hospital association. However, the same analysis indicates that expanding KanCare would offset those reductions and generate a net gain of nearly $231 million annually.

“We as a state ought to be asking ourselves, ‘Are we doing everything we can to help maintain access to health care?’” said Tom Bell, president and CEO of KHA. “And I think you would guess that our answer is no, we haven’t been doing that.”

A coalition led by KHA has failed over the past three years to convince Gov. Sam Brownback and the Republican-controlled Legislature to pass a Medicaid expansion plan. Advocates succeeded in getting a hearing during the 2015 session on a bill that would have authorized Brownback to negotiate an expansion plan with federal officials, but lawmakers never voted on the proposal.

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Next year, hospitals and other expansion advocates will introduce a more specific blueprint for lawmakers to consider, Bell said. It likely will be modeled after plans considered in other conservative states. Generally, these so-called red state plans use federal Medicaid funds to help low-income adults purchase private coverage. Many also require recipients to share in their health care costs in ways that traditional Medicaid doesn’t. Thirty states and the District of Columbia have approved Medicaid expansion and Utah continues to discuss it

Senate Vice President Jeff King, an Independence Republican, could play a key role in the expansion debate going forward. Last session, he said he didn’t believe the state’s rejection of expansion was the main reason that some Kansas hospitals were struggling.

“Expanded Medicaid is not the silver bullet,” he said in April.

But when contacted last week to discuss the closure of the Independence hospital, King said he is open to considering a more conservative approach to expansion.

“I don’t want to expand Medicaid just copying the Affordable Care Act, but want to take the model that we’ve seen in Arkansas, seen in Indiana, that Pennsylvania attempted, to have a Kansas-based Medicaid program that expands to meet the needs of those it currently isn’t covering,” King said.

KanCare now covers about 425,000 children and low-income, disabled and elderly adults. But that number includes relatively few non-disabled adults. Adults with dependent children can participate in KanCare, but only if they have incomes below 33 percent of the federal poverty level, annually $7,870 for a family of four.

Adults without children aren’t eligible for coverage no matter how poor they are. Expansion would extend KanCare coverage to non-disabled, childless adults with incomes up to 138 percent of poverty – annually $16,105 for an individual and $32,913 for a family of four.

Estimates vary, but expansion would extend coverage to between 140,000 and 170,000 Kansans.

Opponents of expanding KanCare eligibility have said they’re concerned about the potential long-term cost to the state, even though the Affordable Care Act requires the federal government to cover no less than 90 percent of expansion costs.

In addition, conservative political groups have threatened to target Medicaid expansion supporters in next year’s election.

“We certainly plan to hold accountable any legislator who supports this misguided scheme,” said Akash Chougule, a senior policy analyst in the national office of Americans for Prosperity.

Chougule made the comment during his testimony at the hearing on expansion conducted last session by the House Health and Human Services Committee. 

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