Alaska News

Alaska hospitals report little change in unpaid medical bills

The Obama administration suggests hospitals in Alaska will save less this year than hospitals in states that opted to expand Medicaid under the Affordable Care Act.

A report released last week by the U.S. Department of Health and Human Services estimates that hospitals in expansion states will save up to $4.2 billion. By contrast, hospitals in Alaska and the other 22 states that have refused new Medicaid eligibility standards will split about $1.5 billion in savings.

The savings are tied to reductions in uncompensated care costs, which the report defines as care provided to low-income patients, or "charity care," plus uncollected medical bills or "bad debt."

Put simply, the report concludes that with an increasing number of Americans covered by private health insurance or Medicaid under the Affordable Care Act, the total amount of these unpaid medical bills is shrinking -- one goal of the health care law.

The report is one in a series of releases from the Obama administration intended to show that the highly politicized health care law is working. It comes less than two months before midterm elections on Nov. 4 and the start of the second open enrollment period on Nov. 15.

Little change in Alaska

In Alaska, hospitals have reported little to no change in unpaid medical bills since Gov. Sean Parnell struck down Medicaid expansion in November. Health officials have said the volume of newly insured Alaskans in private health insurance is tiny and the size of the state's Medicaid population is steady.

The federal report includes data from Hospital Corporation of America, the parent company of Alaska Regional Hospital. The report said it drew its findings from surveys completed by several hospital organizations in Medicaid expansion states and the financial reports of five large, for-profit hospital groups, including HCA. HCA owns 165 hospitals across the country and in the United Kingdom.

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According to the report, Medicaid admissions climbed by 32 percent between the second quarter of 2013 and 2014 at HCA hospitals in expansion states, while in non-expansion states they increased by 8 percent.

At Alaska Regional Hospital in Anchorage, chief financial officer Lynn Kennington said Medicaid admissions have slightly decreased in 2014. The hospital admitted 407 patients covered by the health program in the first eight months of 2014, compared to 421 in 2013.

"Our Medicaid volumes are pretty flat year over year," he said.

When it comes to unpaid medical bills, the write-offs have shrunk from $17.9 million during the first eight months of 2013 to $16.1 million this year. Kennington attributed the decrease to a fluctuating and small patient pool where one uninsured patient can significantly impact the hospital's bottom line.

Overall, the hospital has only seen nine patients in 2014 who were enrolled in private insurance under the Affordable Care Act, he said.

Mikal Canfield, a spokesman for Providence Health and Services in Alaska, wrote in an email that some Lower 48 hospitals in the health system have seen effects of the Affordable Care Act on unpaid medical bills, but Alaska has not.

"While other areas of the Providence system along the West Coast have experienced some impact, the relatively small number of Alaskans who have enrolled in the health insurance exchanges, combined with stable Medicaid enrollment, have resulted in no statistical change for Providence in Alaska," he wrote.

Alaska's patient population

Roughly 16,000 Alaskans signed up for individual insurance plans under the new health care law during the first open enrollment period.

According to state records, nearly 3,000 more Alaskans enrolled in Medicaid between Oct. 1, 2013 -- the date the health insurance marketplace launched -- and June 2014, compared to the same time period a year prior.

But Ree Sailors, a deputy commissioner with the Alaska Department of Health and Social Services, said that the increase isn't surprising. Year-to-year enrollment numbers shift, she said, and a new eligibility system is counting some renewals as new applications.

"There's 120,000 people on this program, so when you're talking of a difference, at best, of 2,000 -- in the grand scheme of things, that's pretty small," Sailors said.

If Parnell chose to expand Medicaid in Alaska, the health care program would have covered every Alaskan with an income up to 138 percent of poverty level, about $19,800 for a single adult.

By some estimates, expansion would have benefited about 40,000 low-income Alaskans, many uninsured adults without children. Some of this group now sit in a no man's land when it comes to insurance, too poor to receive a federal subsidy on the health insurance marketplace and unqualified for Medicaid.

Parnell has remained unwavering on his stance to not expand Medicaid under the Affordable Care Act, which he called a "failed experiment" during a November news conference.

Parnell spokeswoman Sharon Leighow wrote in a statement that the governor "understands the financial burden of uncompensated care on Alaskan providers and its impact on the rates those providers charge to offset the costs."

"While the Governor remains opposed to a traditional Medicaid expansion, he is open to reformation of Alaska's Medicaid program," she wrote.

Leighow discounted the Obama administration's report, writing that it used data from a handful of larger hospital systems in the Lower 48, "which are very different than Alaska's unique health care market" where there is less competition, smaller markets and generally higher rates of Medicaid payments.

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"While the study may include the HCA system, that system is comprised of more than 165 hospitals around the country of which Alaska Regional is only one," she wrote.

Becky Hultberg, president of the Alaska State Hospital and Nursing Home Association, backed the validity of the report and said it makes clear that in the states leveraging federal dollars to expand Medicaid, uncompensated care has declined.

Under the Affordable Care Act, the federal government will pay 100 percent of costs for new Medicaid enrollees through the end of 2016, tapering to 90 percent by 2020.

A study commissioned by the state determined that expansion would cost Alaska just over $200 million over a seven-year period. The estimate is significantly higher than a $23 million estimate provided earlier in 2013 by the Alaska Native Tribal Health Consortium.

ANTHC and ASHNA were just two of the health, advocacy and business organizations that pressured Parnell to accept expansion and extend Medicaid coverage last year.

"These are real people and many people are working hard to make ends meet; without Medicaid, they would simply not be able to afford health insurance," Hultberg said. "They fall into that gap, and if we want to provide health coverage to that gap population, Medicaid expansion is the most fiscally responsible way to do that."

Tegan Hanlon

Tegan Hanlon was a reporter for the Anchorage Daily News between 2013 and 2019. She now reports for Alaska Public Media.

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