Three Arizona hospital systems are pooling their money to take advantage of a federal program that will cover nearly 20,000 more children under the KidsCare program while also providing millions of dollars to offset the cost of covering uninsured patients.
Phoenix Children’s Hospital, Maricopa Integrated Health System and the University of Arizona Health Network will collectively pitch in $113 million for each of the next two years, and the federal government will provide a match of about $229 million. None of the money will come from the state’s general fund.
About $42 million will be used to provide coverage for nearly 20,000 of the 120,000 children on the waiting list for KidsCare, a children’s health care system that is part of the Arizona Health Care Cost Containment System. The rest of the money will offset the hospitals’ costs for providing care for uninsured patients.
Gov. Jan Brewer, who announced the program at Phoenix Children’s Hospital today, said the federal dollars would help relieve the burden on “safety net” hospitals while providing high quality care for more than 19,000 children.
The plan will help offset some of the cuts made by Brewer and the Legislature to AHCCCS and KidsCare, which have suffered hundreds of millions in cuts as the state grappled with a massive budget deficit.
“Real, thoughtful and significant reform requires some very difficult decisions, and I am well aware of the very real impacts of those decisions,” Brewer said. “This is a very creative solution, I believe, brought forth by the hospitals that are represented here today.”
The state submitted the proposal to the U.S. Centers for Medicare and Medicaid Services (CMS) two weeks ago. Don Hughes, Brewer’s health care advisor, said he hopes to get CMS approval by February.
CMS actually rejected a similar plan earlier in the year that Arizona submitted as part of a larger proposed cut to AHCCCS services in March. Hughes said CMS suggested the state include an expansion of KidsCare to secure approval for the plan.
KidsCare was one of the worst casualties of the ongoing budget crisis. In 2010, Brewer and the Legislature cut funding for thousands of children who were receiving coverage under the program, part of a larger AHCCCS enrollment freeze that is expected to eliminate funding for about 100,000 people in Arizona’s Medicaid program.
The plan will cover some of the children who were dropped from KidsCare, but leaves the majority of people who are on the waiting list on the outside looking in. About 15,000 children are currently covered under KidsCare, with another 120,000 on the waiting list. Hughes said the top 20,000 children on the waiting list will be covered under the two-year plan.
Hughes said the plan will also help insured patients who often have to pick up the tab for uninsured patients when hospitals pass on the costs.
“It certainly reduces the amount of uncompensated care that these three hospitals have to cost shift to private payers. So there will be obviously some impact on the overall costs of health care,” Hughes said.
The plan is permissible under a law passed by the Legislature earlier this year. Under SB1357, AHCCCS can authorize political subdivisions to put up Arizona’s share for health care programs that trigger federal matching funds.