Patient volumes at record lows
The New Mexico Medical Assistance Division announced Medicaid rate increases this month for inpatient volumes at New Mexico hospitals, but with revenues declining sharply in response to a record-low number of patients, that may do little to stop the bleeding.
The New Mexico Human Services Department estimates that increases by 12.4 and 50 percent for inpatient and intensive care unit Medicaid patients, respectively, will bring $66 million in additional revenue to hospitals in the state.
The increases apply retroactively from April 1 and will last “for the duration of the national emergency,” reads an HSD press release. The Centers for Medicaid and Medicare approved the rate increases and also promised to release $35 million in hospital payments ahead of schedule.
A total of $46.2 million in Medicaid payments has also been sent to nursing facilities in New Mexico, where elderly residents have experienced a high rate of infection and death from COVID-19, the disease caused by the novel coronavirus.
Hospitals big and small throughout the United States have converted to respond to the pandemic, and many have suspended virtually all other services to do so. But while large hospitals have been overwhelmed with infected patients in pandemic hot spots, such as in New York City and San Francisco, many other hospitals haven’t seen surges in patients infected with the virus.
At hospitals throughout the United States, patient volumes have plummeted by an average of 56 percent, according to a study performed by Crowe Revenue Cycle Analytics, a public accounting, consulting and technology firm. The study estimates that hospitals throughout the country have lost a collective $1.4 billion in revenue every day in May.
Holy Cross Medical Center, Taos’ critical access hospital, has also been bleeding revenues as a result of record-low patient volumes in virtually every service area it provides. Since Holy Cross began transitioning in March to respond to the pandemic, Chief Financial Officer Steve Rozenboom estimates that patient volumes have dropped 40 percent for inpatient admissions, 32 percent in outpatient registrations, 78 percent in surgeries, 27 percent in emergency room visits and 41 percent in clinic visits. Clinic revenues have dropped 51 percent and hospital revenues overall have dropped 49 percent.
Bill Patten, chief executive officer at Holy Cross, said that because the recently announced Medicaid rate increases are tied to patient volumes, the financial support Taos’ hospital will receive as a result will likely be minimal compared to the dollars that are going out the door every day.
“For my part this sounds better than it probably will turn out to be,” Patten said, adding that leaders at other small hospitals throughout New Mexico have expressed similar concerns.
“So not to look a gift horse in the mouth, I would have suggested a support program that was tied to our expense structure – that is something tangible we can really nail down, regardless of how much volume we see or don’t see,” he went on.
Rozenboom noted that of the 89 inpatients Holy Cross saw last month, 46 percent were Medicaid carriers, which typically comprise only 30 percent of inpatients. He estimates that the increases negotiated by the state will generate between $25-30,000 in additional revenues for the month of April at a hospital that spends around $1 million on payroll alone each pay period.
As of Tuesday (May 19), Rozenboom said Holy Cross had also not yet seen any of the early Medicaid payments previously promised by the state.