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Grady on guard

With more than $100 million up in the air, Grady's future depends on critical policy decisions - third of three parts



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HIGH STAKES: Fulton County Commission Chairman John Eaves (from left), Grady CEO John Haupert, and health care advocate Cindy Zeldin are invested in the public hospital’s uncertain future. - Dustin Chambers
  • Dustin Chambers
  • HIGH STAKES: Fulton County Commission Chairman John Eaves (from left), Grady CEO John Haupert, and health care advocate Cindy Zeldin are invested in the public hospital’s uncertain future.

Originally, the ACA required states to expand their Medicaid eligibility to individuals and families making up to 133 percent of the poverty level — an annual income of about $31,000 for a family of four. The money would've worked like this: Each state would get $33 billion over the course of a decade from the feds. During the first three years of expansion, Georgia wouldn't pay a dime. After that, the federal government would cover 90 percent of the expansion's remaining costs. Estimates of the total cost to the state over a decade range from $2.5 billion, according to the Kaiser Family Foundation, to $4.5 billion, according to Deal.

Since more people would be Medicaid-eligible, the federal government planned to phase out approximately half of its Disproportionate Share Hospital (DSH) adjustment payments, money used to reimburse hospitals that provide uncompensated care. Grady has long relied on DSH payments to stay afloat. Matthew Hicks, Grady's vice president of government relations, says that DSH payments will be reduced from $91 million to $45 million between now and 2018. The federal cuts are guaranteed, but the effects were supposed to be minimized with the Medicaid expansion.

Last June, however, the U.S. Supreme Court struck down the ACA's Medicaid expansion and left states with the choice to opt in. Two months later, Deal announced his opposition.

Deal, who denied multiple requests to be interviewed for this series, told reporters at the Republican National Convention in Tampa last summer, "I think that [Medicaid expansion] is something our state cannot afford. And even though the federal government promises to pay 100 percent for the first three years and 90 percent thereafter, I think it is probably unrealistic to expect that promise to be fulfilled in the long term, simply because of the financial status that the federal government is in."

Since August, Deal has remained adamant that the state shouldn't spend more when it's already strapped for cash. He also continues to believe that the federal government, currently mired in sequestration cuts, can't hold up its end of the bargain.

"The expansion is a burden on the state. ... People who think the feds are going to keep paying 90 percent are living in la-la land," Deal spokesperson Brian Robinson said in an email.

Initially, other red states across the nation also were steadfast in their opposition. Following the U.S. Supreme Court ruling, 31 Republican governors all refused to expand Medicaid. Their combined "No" added up to $258 billion in federal money and 9.2 million uninsured Americans. But in recent months, Govs. Jan Brewer (Arizona), John Kasich (Ohio), Rick Scott (Florida), Rick Snyder (Michigan), and Chris Christie (New Jersey) have changed their minds and accepted the expansion deal. Brewer's supporters have even gone so far as to call Arizona's revised decision "fiscally conservative."

Bruce Siegel, CEO of the National Association of Public Hospitals, says Deal's rejection has forced Grady "between a rock and a hard place."

"Safety-net hospitals are being held as hostages in this debate," he says. "On one side, you have forces who oppose the Affordable Care Act and oppose Medicaid expansion. On the other side, you have forces who support the Affordable Care Act and see the DSH cuts as incentive for states [to] expand Medicaid. When hospitals are held hostage, patients suffer."

Due to the combination of last year's Supreme Court decision and Deal's subsequent rejection, the now-broken policies may devastate public hospitals. In Grady's case, nearly $45 million hangs in the balance. "The Affordable Care Act could be one of the greatest things to happen to Grady, or it could be one of the worst," says Hicks. "It all depends how it is implemented."

If Deal and national lawmakers don't come up with a solution to address the public hospital's financial burden, service cuts will most certainly follow. Mental health care will likely be first on the chopping block.

Recently, many Republican leaders — including Deal, Rep. Edward Lindsey, R-Buckhead, and state Sen. Josh McKoon, R-Columbus — have tossed around mental health reforms as a way to quell calls for gun control in the ongoing national firearms debate. Considering that Grady Health System is the state's second-largest mental health service provider, Timothy Sweeney, the Georgia Budget and Policy Institute's director of health policy, says the governor could use the program to bolster his agenda on issues such as criminal justice reform. "The Medicaid expansion could give us the resources to actually have a real mental health system," he says.

Unfortunately, Siegel thinks that negative repercussions, perhaps a hospital closure or major service cuts, will need to happen before either the White House or Congress feels compelled to fix the policy gap left by the U.S. Supreme Court's ruling. "Congress has a hard time acting on anything today, in case you didn't notice," he says. "Anything to do with the Affordable Care Act is doubly radioactive."

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