State budget cuts hurt Baptist Hospital

The special session has come up with a budget that will reduce Medicaid reimbursement to area hospitals. We’ve asked both Baptist and Sacred Heart how they will be impacted.

Kerry Vermillion, chief financial officer for Baptist Health Care, told us that Baptist Health Care (BHC) has done an impact estimate for their system related to the reduction in acute inpatient, outpatient and nursing home rates. “The impact to our system is significant, with the dollar amount depending on how long the reductions remain in effect” says Vermillion. “The estimated annualized impact of Medicaid cuts to BHC as of today would be more than $1.3 million. This number is anticipated to increase as we expect additional cuts during the special session.”

Vermillion also said that for Baptist Health Care and all other Florida hospitals, this cut impacts a segment of their business that is already losing money, hence, increasing those losses at a time that we are seeing significant growth in uninsured utilization.

Additionally, TRICARE outpatient payments in 2009 are scheduled to be reduced as part of the National Defense Authorization Act. Estimates of the impact of this change for BHC approaches $2.3 million.

“BHC considers it an honor and privilege to offer medical care to men and women in uniform as they serve our community, Vermillion told the IN. “However, a reduction of this magnitude would result in losses for services provided.”

“We did not plan for these cuts in our 2009 budget. This means BHC will have to expand our efforts at reducing expenses in an attempt to offset or mitigate the reductions.”