Surge in Medicaid patients swamps state, puts UMC in a bind

By Conor Shine

Sunday, May 25, 2014 | 2 a.m.

Nevada’s largest public hospital has borrowed $45 million in emergency loans in recent months just to make payroll for its 3,500 employees.

University Medical Center, which serves Clark County’s poor and uninsured, always has been subsidized by taxpayers, at a cost of $40 million or more annually.

But this year’s financial challenges were far worse than normal. The cause: A surge in Medicaid patients newly covered through the Affordable Care Act.

The state drastically underestimated the number of people who would enroll in Medicaid and didn’t hire enough staff to process the flood of applications.

Statewide, the number of Medicaid patients has jumped 41 percent since October when enrollment started. The state has added 130,000 new patients, bringing the total Medicaid population to 466,956. And officials still are working through a backlog.

While the state catches up, UMC has treated patients waiting for approval. Instead of cash, the hospital received IOUs from the state.

The state recently started paying those IOUs, but UMC estimates it still is behind by $10 million.

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How Nevada’s Medicaid expansion played out and where it went wrong:

Oct. 1, 2013 – Enrollment starts

Nevada begins receiving new Medicaid enrollments through the state’s online health exchange. Nevada is one of 34 states that approved an expansion of Medicaid along with the Affordable Care Act. The state raised the income cap and welcomed single adults without children. People who previously qualified for Medicaid but had not signed up began to enroll, encouraged by the threat of a new fine for not having insurance under the Affordable Care Act.

Dec. 31, 2013 – Applications flow

The number of Medicaid enrollments in Nevada jumps by more than 10,000 since October. That’s twice as many as the state expected when it made a projection in 2011.

Jan. 1 – Coverage starts

New Southern Nevada Medicaid patients begin seeking care at local hospitals. Many of them find their way to UMC.

Jan. 21 – The $20 million loan

The Clark County Commission approves a $20 million emergency loan for UMC. The hospital isn’t in immediate financial danger, but it seeks the loan to provide flexibility as it manages the flood of new Medicaid patients. The interest-free loan comes from the county’s fund for special construction projects, a move that’s legal under state law.

February – State expands staffing

The state finishes hiring 250 people to keep up with applications. But it’s not enough. The state looks to add another 150 people.

March 31 – Backlog peaks

State employees process about 1,200 Medicaid applications a day, double the rate from a year before. They still fall behind.

April 15 – The $25 million loan

UMC, without a penny of the $18 million it’s owed by the state, has spent down its first Clark County loan and seeks a second, bigger loan. The $25 million loan brings the hospital’s total borrowing to $45 million, all of it from the construction fund. UMC has 12 months to pay off the loans.

May – Backlog shrinks

The state begins to catch up with the backlog of applications and starts paying back UMC. The hospital estimates it still is short about $10 million.

June – Catching up

The state expects its backlog of pending applications to shrink to fewer than 20,000 people by the end of June. This summer, Nevada will have more than 500,000 Medicaid patients, a figure it didn’t expect to reach until 2015.