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Sunday feature: Medicaid Expansion, Larry Alley, Kyle Hoffman and the fate of SRMC

by Tracy McCue, Sumner Newscow — This week the future existence of Sumner Regional Medical Center in Wellington could hang in the balance. The Kansas House of Representatives will gather on the house floor to vote, possibly as early as Monday, whether or not to override Governor Sam Brownback’s veto of a bill that expands coverage of KanCare.

The vote has significant local interest in that the hospital in Wellington could generate $750,000 a year annually with Medicaid expansion.

“That’s a significant chunk of change,” said Terry Deschaine, SRMC board member. “That will allow the hospital to be properly reimbursed for much of the care we provide to patients, who can’t afford it.”

But there are linchpins to this scenario. Both 32nd District Representative Kyle Hoffman and State Senator Larry Alley voted against the bill that would eventually pass through both chambers of the Kansas Legislature. Now in order to save the bill, it must require a 2/3’s majority to override the veto. Currently, the house is three votes shy in the House and two votes shy in the Senate.

In other words, five legislators minds need to be swayed before the veto vote takes place. Health care advocates are hoping they can sway lawmakers over this weekend. Local health officials and civic leaders took it a step further.

Friday afternoon, a collection of 17 civic leaders from Sumner and Cowley County congregated in the office of physician Faustino Naldoza, who has since retired, to have what amounted to be a “come-to-Jesus” talk with Alley over the dire financial straits of the hospital and the desire to get this bill passed. The collective message was: without this bill’s passage, this hospital could very well close.

Those representing SRMC were not alone. Virgil Watson, CEO of South-Central Kansas Medical Center in Arkansas City, was also attendance to speak about the financial condition of his hospital. Also, Cowley County Community College officials were in attendance. It resulted in a nearly 90 minute discussion.

Earlier in the day, Jessica Lucas, Lobbyist Alliance for a Healthy Kansas, had GKN officials meet with Alley about the need of having a hospital in town. Without a hospital, a company such as GKN, could be forced to move its plant elsewhere.

Whether or not these local Friday testimonies will have any bearing on Alley’s ultimate decision, will only be answered in time.

Alley told the group gathered at SRMC that he has yet to make a decision on the bill. But it will be dependent on whether it is “budget neutral.” In other words, if it could be proven that Medicaid expansion through the Affordable Care Act does not cost the state of Kansas, Alley may consider voting for the override.

He states:

“My decision, whatever it will be, will not be a political decision. It won’t be about an emotional decision. This will be an economic decision for me. I know what it means to your hospitals and to your communities. The hospitals I have visited all have different issues. They are not the same. But they all provide a vital service for their communities.

I don’t think you know where we are here in 2017. On Jan. 9 this state was $369 million in debt and that has been whittled down to $260 million based on the various things we have done. What we are looking at is a massive tax increase – raising taxes on every person in Kansas and it won’t be a small increase. If the state of Kansas goes broke, and we could go broke if we don’t solve these problems then that is why I will reluctantly be voting for a huge tax increase.”

Lucas asked if he would reconsider a vote on Medicaid expansion.

“Based on what I know about the states budget I could not vote for it. However, I have talked to Winfield and I have talked to Wellington, and I will continue to gather information on how (Lucas) thinks it could be revenue neutral for the state of Kansas.”

(Editoral’s note: Dave Kerr, former state senate President editorial addresses this subject in the guest editorial below).


Where we are

Despite the heart-felt discussion with Alley, it may be for naught anyway. Alley may never get a chance to either sustain or override the veto if it doesn’t pass through the House first — and that will be no easy task.

The House was scheduled to vote Friday but the motion was tabled for the weekend, when proponents discovered they still didn’t have enough votes for the override. They wanted the weekend to see if healthcare officials could convince enough legislators to change their minds. Also, one legislator proponent was out of town and could not vote Friday.

Hoffman has voted in years past not to pass Medicaid and has reaffirmed both publicly and privately, he has no intention of changing his vote. In a recent legislative forum he worried about what the eventual cost this Medicaid expansion would have on Kansas, stating there are too many misnomers when dealing with the federal program that may not be in existence in a years’ time.

Nationally, a healthcare bill which was to repeal the ACA, i.e. Obamacare, was withdrawn by Speaker of the House Paul Ryan more than a week ago when it was determined he didn’t have enough votes to pass the bill.

President Donald Trump said he would not introduce further legislation and allow Obamacare to destroy itself. However, just this week he said he was open with starting a bipartisan effort to bring about another bill.

Throughout ACA’s implementation, the U.S. Government has given individual states the option of participating in the Medicaid plan. Kansas, with Brownback and a conservative legislature to back him up, have adamantly rejected doing so until this year when a more moderate group was ushered into office.

A Medicaid expansion plan passed the state house 84-27 and then the senate followed suit by a 25-14 measure. But Brownback’s veto put this piece of legislation in peril. Only a 2/3rds override will get the bill passed.

If Medicaid expansion passes, this would expand coverage to 150,000 people in the state in which the federal government will cover roughly 90 percent of the costs, Medicaid proponents say.

For small hospitals such as Ark City and Wellington’s, this would be a financial windfall because many of their patients fall below the poverty line not to mention those who work in the agriculture sector and don’t have access to large healthcare plans. Deschaine said the hospital loses around $1.2 million annually in what is described as “charity care.”  With Medicaid expansion, the reimbursement in that kind of care would save the hospital $750,000 annually maybe more because those costs would be passed to the federal government. That won’t cover all of the charity work, but it will pay more than 50 percent.

As it stands now, Deschaine said, the local hospitals must incur the costs with no hope of reimbursement.

In years past, health officials have resignedly looked on as the legislature would not even consider the bill. Then came this year. They are so close

“This is as far as we could have ever believed it would happen,” Watson said at the meeting to Alley. “You have both the house and senate voting for Medicaid expansion, Mr. Alley, now it is up to you to seal the deal.”

State Senator Larry Alley, center, met with 17 Wellington and Ark City leaders Friday at SRMC.

The pleas

And thus Friday, Wellington and Ark City officials gathered to spell the need of getting those dollars. It’s no secret SRMC has been financially insolvent for some time. Just last week, the hospital asked the council as a guaranteer for a $150,000 loan to pay off some immediate debt.

SRMC generates $1.2 million from sales tax revenue from the city. Still, there are many other issues hurting the hospital including not being a Critical Access hospital – a one-time entry program – which is a federal reimbursement program designed to help rural hospitals. The SRMC administration and board made the ill conceived decision to not be part of that program when it was introduced in the 1990s. Since then SRMC doesn’t have access to federal dollars that many other Kansas hospitals do.

At the gathering Friday, Deschaine was the first to speak and told of a senator in Independence, who now feels his legacy is defined by the closing of the Independence hospital in 2015. He said if Wellington was to close its doors, that could be the legacy of Alley and Hoffman.

Dr. Larry Anderson spoke of the need to get back from the federal government what the people have put in through taxation.

Sumner County Economic Development Director Stacy Davis said one of the leading indicators of bringing in site selectors to the community is healthcare and inevitably there is the question about whether or not Wellington has a hospital.

Wellington Mayor Shelley Hansel told a story about her son getting hurt at the Dillons Grocery Store and how having a hospital nearby might have saved his life.

J.C. Long, President of Bank of Commerce, said as a former legislator himself he believes that good policy should always trump politics, and this is a winning proposition.

SRMC administrator Les Dean said the healthcare system is built for large hospitals, and Washington has overlooked rural healthcare.

Wellington City Council member Vince Wetta said the city of Wellington has poured million dollars into the hospital, and it is now affecting the city.

“We are begging you to listen to us,” he said. “We are tapped out.”

Watson then followed and spoke about rural healthcare as a whole:

We are on bended knee asking for your help. In Ark City, we are doing $31 million of revenue a year and getting $14 million worth of reimbursement. There is no other business that can operate on those kind of margins. We are doing the work and getting paid less than half the reimbursements. We care for the people we live around the people we see in the grocery store or at the post office. We have an obligation to take care of these people. But we are living with a system that is unsustainable for the survival of rural hospitals.

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