KHI News Service

Via Christi leader: Kansas hospitals hurting due to ‘failure’ to expand Medicaid

CEO of state’s largest health system publicly calls on Brownback, GOP legislative leaders to drop opposition to expansion

By Jim McLean | September 23, 2015

Via Christi leader: Kansas hospitals hurting due to ‘failure’ to expand Medicaid
Photo by Via Christi Health Wichita-based Via Christi Health has lost nearly $28 million in revenue over the last two years due to the lack of Medicaid expansion in Kansas, according to a statement from its CEO.

Kansas’ “failure” to expand Medicaid is putting health care providers in jeopardy, the head of the state’s largest health system said Wednesday.

Jeff Korsmo, CEO of Wichita-based Via Christi Health, issued a statement calling on Gov. Sam Brownback and Republican legislative leaders to drop their opposition to expanding KanCare, the state’s privatized Medicaid program.

“Kansas’ failure to expand its KanCare program has resulted in almost $14 million in annual lost revenue to Via Christi — nearly $28 million over the past two years,” Korsmo said in a statement. “This failure already has contributed to the pending closure of a hospital in Independence, Kansas, and has put many other health organizations in a precarious financial position.”

Photo by Jim McLean Jeff Korsmo, CEO of Wichita-based Via Christi Health, spoke in support of Medicaid expansion in January before a legislative committee.

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The Via Christi system includes four hospitals and a behavioral health center in Wichita as well as hospitals in Manhattan, Pittsburg and Wamego.

Korsmo said the expansion of Medicaid under the Affordable Care Act was intended to help offset planned reductions in Medicare reimbursements. The state’s rejection of expansion has denied hospitals access to those offsetting revenues, he said.

“Our financial pressures have been intensified because of the refusal of Gov. Sam Brownback and the Kansas State Legislature to approve expanding the KanCare Medicaid insurance program for the poor and vulnerable,” Korsmo said, adding that two months into the fiscal year Via Christi’s income is $3.3 million below budget projections.

Korsmo said Via Christi would take several steps to manage costs, including focusing on hiring critical clinical staff, moving employees in low-volume areas to other positions that serve more patients, reducing the number of management positions and halting discretionary spending for travel, education and meetings.

Via Christi has reduced its full-time employee count by more than 110 in the last year and a half, Korsmo said.

“While difficult, these cost-reductions are necessary,” he said. “Financial challenges in health care are intensifying, so we must constantly be focused on controlling costs while also seeking opportunities for growth.”

Without expansion, Kansas hospitals stand to lose approximately $132 million in 2016 because of reimbursement reductions in Medicare and other federal programs, according to the Kansas Hospital Association.

Expanding KanCare would not only offset those reductions, it would generate a net gain of nearly $100 million.

“Our financial pressures have been intensified because of the refusal of Gov. Sam Brownback and the Kansas State Legislature to approve expanding the KanCare Medicaid insurance program for the poor and vulnerable.”

- Jeff Korsmo, CEO of Wichita-based Via Christi Health

A coalition of hospitals and other expansion advocates has failed to gain traction on the issue in the Legislature. The House Health and Human Services Committee conducted a hearing on an expansion bill backed by KHA during the 2015 session but didn’t vote on the proposal.

Brownback reiterated his opposition to expansion in a recent speech to students at Hutchinson Community College.

“I don’t think we have the resources to get it done,” he said, according to the Wichita Eagle.

At a Wednesday news conference, Brownback said the lack of expansion revenue was one of several factors that led to the closure of Mercy Hospital in Independence. 

"I think there's a real question whether or not even if you had an expansion of Medicaid what that would have done in the financial picture," Brownback said, adding that repealing "Obamacare" would allow hospitals to "get their Medicare payments back."

Previously, the governor has indicated a willingness to consider expansion but only if the plan is budget neutral and requires recipients to work or actively seek employment. Most of the 140,000 to 170,000 Kansans who would become eligible for coverage under expansion already work.

In addition, Brownback has said, KanCare services must be extended to Kansans with disabilities now on waiting lists before providing health coverage to more low-income but able-bodied adults.

Despite the governor's continuing opposition, there are indications that the closure of the Independence hospital and the financial struggles of others have prompted some Republican leaders to reconsider the issue.

Senate Vice President Jeff King, a Republican from Independence, now says he’s willing to consider the kind of conservative, private-sector approach to expansion that some other red states are taking.

“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.

Arkansas used federal Medicaid money to purchase private coverage for more than 200,000 low-income residents. Indiana’s expansion plan required some participants to contribute to health savings accounts.

A coalition of expansion advocates is planning to focus on these “red state plans” at an “educational meeting” for Kansas policymakers scheduled Nov. 3 at the Kansas Leadership Center in Wichita.

In addition to KHA and Via Christi, the coalition includes Wichita’s Wesley Medical Center, the University of Kansas Hospital, the Kansas City-based St Luke’s Health System and the Kansas Health Foundation.

The health foundation is the primary funder of the Kansas Health Institute, the parent organization of the editorially independent KHI News Service.

The hospital association has done several studies that show KanCare could be expanded at no additional cost to the state.

The ACA requires the federal government to pay 100 percent of Medicaid expansion costs through 2016. After that, its share of cost goes down incrementally until it reaches a floor of 90 percent, with states paying the remainder.

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

Non-disabled adults without children aren’t eligible for KanCare regardless of income. Expansion would expand 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. 

Editor’s note: This story was updated at 4:10 p.m. Sept. 23.

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