Medicaid Already Pays Hospitals Late, Now Hospitals Face Decreases

Adding to the problem of late payments from Medicaid, a cut in reimbursements in December could cause further problems for U.S. Virgin Islands health care facilities, members of the V.I. Government Hospital and Health Facilities Corporation Territorial Board learned at the monthly meeting Wednesday.

Until the hurricanes of 2017 and pandemic in 2020 upset the economy, the federal program paid 55 percent of the bills incurred by Medicaid patients and the territory was responsible for 45 percent. According to board chair Christopher Finch, the hospitals traditionally have used the allotment from the V.I. government to cover their share.

After the 2017 hurricanes, Medicaid suspended the territory’s share and paid 100 percent of the medical bills for a period of time, then changed the percentage to 89.2 percent and now it is 83 percent. Due to the coronavirus pandemic, Medicaid began to rebate six percent back to the states and territories. However, on Dec. 3, the formula reverts to the original 55/45 and the six percent rebate will expire in March.

Health facility chief financial officers are participating in a series of training sessions provided by the V.I. Department of Human Services, which distributes Medicaid locally.

During the board meeting, Finch asked for comments from the two hospitals’ chief financial officers, Shenel Moorehead, acting CFO for the Juan F. Luis Hospital, and Pamela Gallagher, Schneider Regional Medical Center’s CFO. Both said reimbursements from Medicaid are chronically late and don’t even meet a 55 percent match.

Gallagher cited an example of Medicaid billing for the St. Thomas hospital and said SRMC submitted more than $11.5 million for reimbursement to Medicaid for the month of October.

“We do not get payments timely. The biggest issue here is the cash flow problem – erratic paychecks, if I only paid you this week and maybe not next week – it creates a lot of undue stress on the overall performance of the organization.”