Toldeo Health Insurance

Ohio's children's hospitals fear losing federal money

Ohio's children's hospitals, along with others across the nation, fear they will lose up to $876.6 million in federal funding over the next decade if Congress doesn't alter proposed health-care legislation.

Under the legislation, "disproportionate share" payments to hospitals that care for a lot of patients who are uninsured or on Medicaid, the government program for low-income families and the disabled, would be reduced.

Children's hospitals say those cuts will hurt them more than other hospitals.

"It could be a disaster," said Shawn Lyden, executive vice president for Akron Children's Hospital. "I think there's either a fundamental lack of understanding or a misconception in Washington around what this means for children's hospitals."

Children's hospitals -- including Akron and Cleveland's Rainbow Babies & Children's Hospital -- serve a larger ratio of patients on Medicaid than general hospitals. More than 50 percent of the children treated at each hospital are on Medicaid, as compared with the 12 percent a general hospital sees.

Industry leaders say Medicaid pays only 67 percent of the cost of care, and hospitals depend on the federal reimbursements as well as private insurance to make up those losses.

Congress reasons that the reimbursement funding will not be needed, as hospitals will begin to see more insured patients under the proposed reforms.

But Nick Lashutka, president of the Ohio Children's Hospital Association, said that logic doesn't work for children's hospitals because they already see so few uninsured patients -- they won't get an influx of paying insured patients to offset the loss in federal reimbursement.

National and statewide efforts to insure children have been so successful that 94.2 percent of Ohio's population under 18 years old has some form of health insurance, according to the latest U.S. Census figures.

"We've been struggling to get this on the map of policy-makers," Lashutka said. "It's hard to get the attention of folks to understand some of the unintended consequences."

Akron and Cleveland's Rainbow, which each care for more than 500,000 children annually, estimate they will lose millions in annual funding if the cuts take place.

"It's a significant amount with respect to the increasing amount of Medicaid we're caring for," said Mike Farrell, president of UH Rainbow Babies & Children's Hospital.

Farrell estimates that his institution would see a $20 million cut in federal funding over five years if the proposals go through Congress. The National Association of Children's Hospitals is lobbying Congress to change the Medicaid cuts. In a November letter, U.S. Sen. Sherrod Brown sent a letter to the Senate finance committee warning that federal payment cuts could "significantly damage vulnerable patients' access to care."