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Hernando County Commission, hospitals debate high Medicaid costs

BROOKSVILLE — When County Commission Chairman Wayne Dukes learned recently how much Hernando taxpayers are spending to provide hospital visits for jail inmates, the sticker shock took his breath away.

For the roughly 100 inmates and detainees taken to Brooksville Regional and Spring Hill Regional during the past year, the tab was $500,000.

By law, the county must provide the service. But the cost is four to five times higher than what other nearby counties pay, Dukes told fellow commissioners last week.

In fact, it's costing the county so much, Dukes suggested Hernando save money by buying an ambulance, hiring three drivers and taking local inmates to a Pasco County hospital for treatment.

At the same time, the county is a couple of months overdue to sign a separate annual agreement between the county and the hospitals to cover Medicaid costs for all Hernando residents. The agreement, known as an intergovernmental transfer, allows the county to pay more than the standard Medicaid cost per patient to help the hospitals remain profitable.

In the current agreement, the hospitals bill $1,444 per in-patient. If the county didn't have the agreement, the cost would be $1,172. For the new fiscal year that began July 1, the cost to the county would be $1,388 per patient with the agreement or $883 without it.

Last year, the county spent $2.8 million; this year's request is $2.4 million.

The agreements are voluntary; Hernando officials do not have to pay more than the going rate.

And given the county's tight budget situation, Dukes said officials need to scrutinize every dollar spent.

At Tuesday's County Commission meeting, Spring Hill Regional Hospital chief operating officer Patrick Maloney urged commissioners to sign the intergovernmental transfer and continue the partnership.

While Dukes said he wasn't opposed to signing the intergovernmental transfer, he wanted to be sure that other commissioners knew they held an important bargaining chip for negotiating the cost of health care for inmates. He pointed out that his father always said when purchasing two horses, get the price for two horses rather than buying one at a time.

Ultimately, realizing they had time, commissioners put off a decision on the intergovernmental transfer. A workshop is scheduled for 9 a.m. Tuesday, when hospital, jail and county officials are all expected to discuss the issue with the commission.

The reason Hernando County pays so much for inmate care is that payments are based on actual cost, with a discount. In surrounding counties, other Health Management Associates-affiliated hospitals base their rate on standard Medicaid rates.

Hernando's rate also used to be based on the standard Medicaid rate, but that changed in 2006, said Veda Ramirez, county health and human services director.

Even if Hernando hospitals charged Medicaid rates, plus the extra amount provided for by last year's intergovernmental transfer agreement, the 100 inmates would have cost county taxpayers just $144,400, not $500,000.

Why, Dukes asked Maloney, is the hospitals' contract with the county is so much more expensive?

Hernando Health Management Associates hospitals offer obstetrics and a neonatal intensive care unit, which other local facilities do not have, he said. About 70 percent of patients in those units are on Medicaid.

He said his hospital wants to continue to offer those kinds of services because pulling them out due to the high cost "would have a very, very sad impact on this community.''

Maloney said the Health Management Associates hospitals are willing to work with the county and offer a deeper discount on the cost of inmate outpatient care, one that would save the county $500,000 over three years.

County Administrator Len Sossamon said the offer is something commissioners should consider.

He said the assistance the county has been giving the hospital is simply a subsidy, though he acknowledged it "does help the hospital to make money (and) help it stay alive and have services available.''

By providing specialized programs like the neonatal unit, the hospitals put themselves at risk, Sossamon said.

"It's a losing proposition for them,'' he said.

Commissioner John Druzbick said he was concerned that there were no other health care providers vying for the county's Medicaid patients. None were in the audience seeking to serve inmates. What would the county do, he asked, if the HMA facilities pulled out of their agreements?

Dukes said Thursday that hospital officials have asked for a meeting with county staff on Monday, prior to the Tuesday workshop.

He said he hopes the group can come to an agreeable solution.

"All I'm trying to do here is support the hospital and decrease the rate that we pay for inmates and detainees,'' he said. "We're trying to bring our costs more in line with our surrounding area, and it's not just nickels. ...

"A half-million dollars is a lot of money out of anybody's checkbook.''

Barbara Behrendt can be reached at behrendt@tampabay.com or (352) 848-1434.

Hernando County Commission, hospitals debate high Medicaid costs 09/15/12 [Last modified: Saturday, September 15, 2012 1:56pm]
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