Governor Tate Reeves announced a series of sweeping Medicaid reimbursement reforms Thursday, September 21, 2023 in Mississippi which are estimated to generate approximately $700 million for hospitals across the state.
This action includes two hospital payment initiatives that are estimated to generate almost $700 million annually in additional Medicaid funds for Mississippi hospitals.
The first initiative, known as the Mississippi Hospital Access Program (MHAP), will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system. With these directed payments, hospitals would be reimbursed near the average commercial rate, which has been considered the federal ceiling for Medicaid reimbursements in managed care.
The second initiative will supplement Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit.
This payment mechanism, known as a UPL, is calculated similarly to the one-time emergency payment of $137 million that hospitals received through the Mississippi Division of Medicaid earlier this calendar year.
To minimize the recurring impact of state general fund expenditures, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.
Hospitals are projected to net an increase of $689 million through these initiatives, after accounting for the funds the hospital made to help finance the initiatives.
The federal Centers for Medicare and Medicaid Services (CMS) must approve both proposals, which are being submitted. If approved, both would be effective as of July 1, 2023.
“We’ve met with hospitals and doctors, insurance experts and community leaders,” said Governor Tate Reeves.