By DR. RENE RIGAL
Nearly half of all births in Pennsylvania are covered by Medicaid (Medical Assistance). During the economic recession dependence on this program has grown particularly in rural and urban areas. Under Act 22 of 2011, the Department of Public Welfare (DPW) eliminated the Medical Assistance payment for normal newborn births-one of the largest categories for admissions under the Medical Assistance program. Removal of this payment has negative implications for obstetrical services statewide that could impact ALL pregnant women and newborns.
Hospitals serving Medical Assistance patients are already accepting payments for obstetrical care that are below the cost of provision. Eliminating payment for normal newborn care places additional financial pressure on these units, particularly in underserved urban and rural areas and areas with just one community hospital providing obstetrical care.
Hospital obstetrical units are already financially strained. In Pennsylvania, 44 hospital obstetric units and many neonatal intensive care units have closed since 1997 because of inadequate reimbursement rates and rising malpractice insurance premiums tied to obstetrical care. Without relief from this DPW policy, more obstetrical units may close limiting access for all pregnant women regardless of their ability to pay. For Susquehanna Health, who operates the only maternity unit in Lycoming County, elimination of this payment leaves the health system with a $400,000 loss per year.
Several flaws in the rationale behind the DPW policy and areas that it fails to address contribute to the potential unintended consequence of limiting access to obstetrical care. The state's assertion that it is commonplace to make a single payment for care for the mother during delivery and postpartum and her newborn is incorrect. Medical Assistance managed care organizations as well as commercial health plans use a variety of reimbursement means for delivery, postpartum and newborn care and often have separate payments.
When payments are combined, clear criteria for costs are incorporated into the payment as well as the criteria for "normal newborn." The DPW's policy does not address these issues and simply calls for reduced payments to hospitals providing care to pregnant women and newborns under the Medical Assistance program.
The DPW policy change also lacks a substantive analysis of the costs of newborn care which include specially trained staff, infant supplies, and mandated testing and screening. With or without payment, hospitals must provide these services. The DPW policy intensifies the financial impact.
How the estimated savings of $18 million (state and federal funds) annually were derived by DPW is not clearly outlined. Hospitals providing obstetrical services are concerned that the financial impact of the elimination of the newborn payment will be far greater than estimated.
Current payment levels for normal newborns under the fee-for-service system were developed under the all patient refined-diagnostic related groups (APR-DRG). DPW sought this classification to enable the Medical Assistance program to group care categories and develop payments based on resource use and patient intensity and so DPW could monitor care effectiveness. Removal of the normal newborn payment inappropriately distorts this classification system. Nothing in DPW's policy addresses this or defines normal newborns in a way consistent with the APR-DRG classification system.
Finally, the policy does not address the interrelationship of the fee-for-service program and the state's mandatory managed care program, HealthChoices. These plans typically must adhere to payment policies in the fee-for-service program so the DPW policy change could have further negative financial ramifications for hospitals providing care under HealthChoices.
In May, the Pennsylvania Senate voted in favor of Senate Bill 1466 to restore the funding necessary to undo the DPW decision. This is a positive step. However, in early June, members of the General Assembly must pass legislation to support this funding to keep the DPW policy change. On behalf of our community, we ask our state elected officials to restore Medical Assistance funding for mothers and babies.
Rigal, of Susquehanna Health Pain Management, is the Health Commissioner for the City of Williamsport. Dr. Rigal is board certified in his specialties of anesthesiology and pain management.