Arkansas and Mississippi Weigh In
When news spread about The MED possibly closing its Emergency Department by Feb. 1 if it cannot secure $32 million in additional funds, state governments in neighboring Arkansas and Mississippi—whose residents also frequent the Memphis hospital—took another look at their involvement.
The MED has filed an Intent Designation Application with the Arkansas Department of Health (ADH) as a Level I Trauma Center in the Arkansas Trauma System, said ADH spokesperson Ed Barham.
"There's been no notification to ADH that plans to participate in the Arkansas Trauma System have changed or that there will be any change to trauma services provided by The MED," said Barham. "Arkansas continues to view The MED as a significant participant in the trauma system in Eastern Arkansas."
Jim Craig, director of health protection for the Mississippi State Department of Health (MSDH), said The MED serves as a designated Level I Trauma Care Center in the Mississippi Trauma Care System, and the hospital also acts as a regional tertiary care facility at the hub of the Delta Trauma Care Region, with the responsibility of providing leadership in education, trauma prevention and research as well as system planning.
"Mississippi Trauma Care Trust Funds have been distributed in past years to designated trauma care centers—such as The MED—as well as to eligible physicians for uncompensated care of qualified trauma care patients," said Craig. "Available funds are allocated based on the hospital Diagnosis Related Groups (DRG) Relative Weights related to traumatic injuries for those qualified Mississippi trauma patients submitted."
The MSDH distribution reports for the last few years, published by Horne CPA Group, shows that The MED received $674,779 in fiscal year (FY) 2006, while surgeons and anesthesiologists received a total of $90,980. In FY 2007, the hospital received $695,957, while surgeons and anesthesiologists received a total of $236,502. In FY 2008, the hospital received $2.16 million, while surgeons and anesthesiologists received a total of $605,141.
"This fiscal year, a new distribution formula will be used," Craig explained. "Compared to previous years where 70 percent of the distribution amount went to designated trauma care centers and the remaining 30 to eligible physicians, this year's funding will be distributed based on participation level of the hospital (Level I, Level II, or Level III) as well as the number and severity of qualified trauma patients. Thirty-five percent of the total distribution amount will be distributed to hospitals based on participation level, 50 percent based on number and severity of patients, and 15 percent to emergency medical services. Also new this year, at minimum 30 percent of the total individual hospital payment will be earmarked for physician-specific resources."
Earlier this year, The MED entered into a cooperative agreement with MSDH for receipt of funds, not to exceed the Medicare allowable rate, from the Mississippi Burn Care Fund.
"This is in addition to trauma care funds," said Craig. "Available burn care funds are allocated based on the hospital Diagnosis Related Groups (DRG) Relative Weights, related to burn injury for those qualified Mississippi burn patients submitted."
For the fiscal year that ended June 30, The MED reported more than 55,000 visits to its Emergency Department and reported a net income loss of $20.9 million.
The $32 million in additional funds is very specific—the difference between the total operating subsidy of $95 million and the current average annual operating subsidy of $63 million—to allow The MED to meet cash flow needs.
Michael Garriga, administrator for DeSoto County in Mississippi, which borders Memphis, said that residents north of Highway 82 requiring emergency care are generally taken to The MED.
"Our county leaders would certainly advocate taking a leadership position to continue support of and funding for The MED," he said.
Earlier this year, The MED cut more than 200 jobs—roughly 11 percent of its workforce—in a move that was not linked to the sagging economy or to possible future cuts to government subsidies, according to Christine Pappas, COO of The MED. Instead, the decision resulted from following recommendations from hospital consultant FTI Cambio, hired in 2008 to help sustain the financially troubled hospital.
Direct funding from the American Recovery and Reinvestment Act (ARRA) would have helped, but The MED did not receive those monies.
"The most direct impact to The MED from the stimulus bill was avoidance of cuts in payments for essential access funds, Medicaid rates and other supplemental payments," explained Angie Herron of The MED.
The MED serves as a regional healthcare resource providing access to the only Level 1 Trauma Center and other safety net services in a tri-state region.
The board-approved reduction in services could include closing MEDPlex, ambulatory services and Emergency Department doors. Proposed service reductions do not affect the Trauma Center, Burn Center, Neonatal Intensive Care Unit, or Women's Services.
Because states received stimulus funds for their Medicaid programs, these additional funds are non-recurring, and therefore, the potential threat of the future of The MED remains omnipresent, Herron added.
"The decision to move in the direction of service reduction has not been made lightly," insisted Claude Watts, CEO of The MED.
Action on The MED's proposal rests with The Shelby County Commission, which is expected to approve or disapprove the plan before Jan. 31.