Las Vegas Sun

November 22, 2019

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Hospital wants spotlight on low Medicaid reimbursements

Sunrise NICU

Wade Vandervort

Vanessa Macias cares for her 1-year-old son, Roman, in the pediatric intensive care unit at Sunrise Hospital, Thursday, Dec. 13, 2018. Roman has undergone several heart surgeries.

Sunrise Pediatric Intensive Care Unit

1-year-old Roman Macias receives medical care in the neonatal intensive care unit at Sunrise Hospital, Thursday, Dec. 13, 2018. Roman has undergone three heart surgeries. Launch slideshow »

Roman Macias celebrated his first birthday in the same hospital where he was born, a facility where low Medicaid reimbursements may lead to changes in services and technology.

Millions in losses triggered by low Medicaid reimbursements are setting the stage for possible cuts that would impact every patient at Sunrise Hospital, officials say, including the 1-year-old Medicare patient whose ongoing care can cost thousands of dollars per day.

Sunrise Hospital is just months away from considering possible changes to cope with losses caused by low Medicaid reimbursements, said CEO Todd Sklamberg. Without meaningful progress from the 2019 Legislature, he said, the hospital will have to look at its services and costs to determine a sustainable path forward.

“The state needs to determine where healthcare is in the priorities, and if that means re-allocating existing dollars from other programs to maintain the level of health care that’s needed here in this state, that’s a decision that the executive and the legislative branch needs to make,” Sklamberg said. “ … We are at this decision point, and here over the next few months, we’ll need to assess if we’re able to continue to provide the life-saving critical services that the state needs.”

Nevada is reimbursing hospitals for about 57 percent of Medicaid patients’ costs, Sklamberg said. The hospital’s Medicaid losses totaled $77 million in 2017, an unsustainable increase of 91 percent since 2012, Sklamber said. The hospital is working to raise awareness through its new Every Baby Counts NV initiative.

“We need to close that gap,” Sklamberg said. “I do not want to make a dime on Medicaid, but we have to close the gap and start minimizing the losses.”

Nationally, Medicaid reimburses hospitals at about 89 percent of cost, he said. Idaho reimburses at 100 percent and California is at 82 percent, and Arizona is at 70 percent, according to data from the Nevada Hospital Association.

“The challenges are just not numbers on a piece of paper,” he said. “We’re talking about lives.”

The hospital staff has become like family to single mother Vanessa Macias, who said she is with her son every day and recently celebrated his first birthday at the hospital. Staffers stopped by his room to wish him a happy birthday and some brought him presents.

Roman was born with a heart defect and has undergone several surgeries. At one point his heart stopped for 12 minutes, and Macias said some staffers stayed after their shifts to see if he would make it.

Macias said Roman may need open heart surgery in the near future. It’s unclear when she can take him home, but she’s hoping that it will be soon, she said. Medicare makes her son’s medical treatment possible, Macias said, and she’s been grateful for the charities, her family and the staff who have been looking out for her.

“When I genuinely say they love him, they do,” Macias said of the hospital staff. “It’s not even staff anymore, it’s family, and it will be like that for the rest of his life.”

All patients would be impacted if the hospital has to curb services or technology regardless of whether they are on Medicaid, hospital officials say. The hospital serves one in four kids and one in 12 adults in the state.

“Medicaid reimbursement is the driver of the economic challenge that we’re talking about today, any decision we make, so if it’s a decision to reduce or eliminate a service, it’s not just going to impact the Medicaid population,” Sklamberg said. “It’s going to impact the entire state.”

Sunrise is the only hospital in Nevada with a pediatric cardiac program, providing care for babies who need heart surgery like Roman. The 1-year-old also received Neonatal Extracorporeal Membrane Oxygenation, a $6,900-per-day treatment not offered at any other Nevada hospital. The treatment mimics the heart or lungs to allow the body to rest and heal.

“Any child who has heart disease who needs an intervention, who needs surgery, they come here,” he said. “No other place, no other hospital in the state can provide that level of care.”

A 3-month-old from Reno was flying into Las Vegas recently for open heart surgery at the hospital, said Michelle Cash, administrative director over pediatrics at the hospital.

“They’re flying in to us because we are where you need to be if you want open heart surgery and you want your 3-month-old child to be taken care of,” she said.

Low Medicaid reimbursements aren’t a new problem, Sklamberg acknowledged. Where before Obamacare, a small population of uninsured patients might sporadically seek emergency services due to a lack of preventive care, Medicaid expansion under the ACA has brought the hospital patients who use more services, he said.

The incoming governor and attorney general have said they plan to join an appeal challenging a recent court ruling against the ACA. Sklamberg said increasing reimbursements remain a priority for the hospital as the ruling won’t impact Obamacare “immediately or for the foreseeable future.” The hospital supports Obamacare and the Medicaid expansion, Sklamberg said, but the expansion brought the state from about 325,000 enrollees to over 650,000.

The hospital’s neonatal ICU treats about 1,000 babies annually, with 74 percent of admissions in that unit covered by Medicaid. About 65 percent of the patients in the children’s hospital is covered by Medicaid.

“These are among the highest-cost services that are provided,” he said. “When that reimbursement is slightly more than half of what it costs us to do such, that’s what I think calls into question for the state, where does health care fall in the state’s priorities.”

Patients with Medicaid make up about 42 percent of overall hospital admissions, and 56 percent of emergency patients, with an estimated 165,000 people to be served in that department this year.

“We’re going to have to look at some of our high-end services, the services that are costly,” Sklamberg said. “It’s not about just a certain part of the population, but specifically Medicaid reimbursement for that high-end service. We’re going to have to evaluate our ability to continue to provide the full spectrum of care in our neonatal intensive care unit throughout our children’s hospital, as well as our high-cost services.”

Sunrise, which recently celebrated its 60th anniversary, is the state’s largest Medicaid provider and largest single-campus acute care facility in the state with 690 beds, Sklamberg said. The for-profit hospital is planning to expand to 762 beds in October.

Sklamberg said he wants lawmakers to look at where they invest their dollars and consider where health care sits among those priorities. He said Medicaid reimbursements are the same level as in 2001.

The CEO said it’s likely unrealistic for the state to boost its rate to the levels seen elsewhere around the country, but there needs to be significant progress this session. Sklamberg said the hospital has been engaging the executive branch and lawmakers on this issue since before he joined the hospital 11 years ago.

The state will have about 7.2 percent more in its next budget than initially projected. Outgoing Gov. Brian Sandoval’s proposed budget would put more money toward Medicaid in part to help handle the increasing number of patients, though Sklamberg said the budget does not address reimbursements to hospitals.

Lawmakers will weigh the Medicaid issue alongside millions, if not billions, that may be needed to increase education funding to adequate levels, among many other priorities that advocates want funded.

“Everybody walks out of here saying this is important, then the legislative session starts,” he said. “Folks get back in Carson City, and given all the other challenges the state has, that support, the conceptual support, the emotional support, the philosophical support, does not materialize into any fundamental change.”