Hospitals about to Lose $89M in Medicaid Funding

When James Huffman, who runs Baptist Memorial Hospital-DeSoto in Southaven, looks at his hospital’s budget, he knows he’ll have to make cuts this year. He’s just not sure where to make them.


“I have to clean rooms. I have to prepare meals. I have to have nurses to take care of patients. I’ve got to have pharmacies. I’ve got to have respiratory therapists,” Huffman said. “… I’ve got to find a way to make payroll every two weeks, and if Medicaid payments suddenly stop, I can’t.”

Medicaid is one of Baptist-DeSoto’s biggest insurers, covering more than 10 percent of its patients. And right now the state agency is at a crisis point, facing a near record-breaking $89 million budget deficit.

So far this session, lawmakers have committed only to fulfilling about half that deficit. This means Huffman and other hospital CEOs statewide will face their own budget crises and risk eliminating some patient services.

If Medicaid, a state agency, can’t close the deficit with internal cuts, state code mandates Mississippi’s providers step in and cover up to $40 million of the losses through a series of provider cuts. This includes a maximum $10 million tax assessment on all 110 hospitals in the state.

“It puts me in a position to be a tax collector for the state, and the only other people paying the tax are sick people,” Huffman said. “So if the tax goes up, the only way I can come up with another dollar to pay the state is to not provide certain services. Medicaid patients only pay the cost of the services we provide. There’s no profit margin built in.”

In the past decade, Medicaid’s budget has ballooned to over a billion dollars, even as the number of recipients has fallen. That, combined with an appropriations shortfall and three rounds of state-wide budget cuts, has left the agency $89 million in the hole for 2017.

Medicaid is a notoriously difficult agency to trim internally. Like an insurance company, the bulk of the budget — 97 percent — goes toward health care services such as doctor visits, tests and prescriptions. This means the agency could cut all 900 employees and close all 30 regional offices, and the $30 million savings still would not fill the deficit.

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