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Governor Reeves proposes nearly $700 million in additional hospital funding through Medicaid

This week Governor Tate Reeves announced two hospital payment initiatives that could generate almost $700 million annually in additional Medicaid funds for Mississippi hospitals.

The first initiative, an amendment to the existing 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 Mississippi 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 that 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 were submitted earlier this month. If approved, both would be effective July 1, 2023.

For more information, read the Hospital Impact Summary.

Published Sept. 22, 2023