Five Minutes with David Williams

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Five Minutes with David Williams | David Williams, HORNE LLP, American Recovery and Reinvestment Act of 2009, Health and Human Services Secretary

David Williams

HORNE CPA Discusses Stimulus Package Perks

With the recent changes in the political landscape, many healthcare providers are cautiously moving forward with major financial commitments. And in light of the stimulus package, healthcare providers are watching with keen interest to see who will be named the next Health and Human Services Secretary and what kind of major program changes are ahead for Medicare and Medicaid.

Mississippi Medical News recently had a chance to discuss the healthcare-related items contained in the American Recovery and Reinvestment Act of 2009 with David Williams, CPA, a partner at HORNE LLP in Jackson, one of 13 offices in Mississippi, Tennessee, Alabama, Louisiana and Arizona. HORNE LLP is one of the leading accounting and business advisory firms in the nation.

What provisions will impact healthcare providers?

Three of the provisions in the Recovery Act that will impact Mississippi healthcare providers the most include the following funding distributions:

$86.6 billion has been included for temporary assistance to the state in the Federal Assistance Matching Program (FMAP). In Mississippi, this would mean a decrease in the state matching rate of approximately 24 percent to approximately 18 percent. In essence, a $4.3 billion budget would require approximately $270 million less in Mississippi dollars, with the increase coming from the federal government in state fiscal year. This additional FMAP funding will eliminate the current Medicaid budget shortfall in Mississippi. Most significantly, the FMAP increase is to last for 27 months, which hopefully will provide all stakeholders adequate opportunity to work out a reasonable, sustainable funding solution for Medicaid over the long haul.
$19 billion has been included for grants and loans for health information technology infrastructure and incentive payments. Various payments are available to hospitals, physicians and other healthcare providers to develop systems that meet federal standards for electronic standardization of reports. A payment will be made to "meaningful users," and some penalties will be levied against providers not in compliance. As an example, a hospital that complies will receive a base payment of $2 million... and then an additional $200 per patient in certain circumstances. If the provider fails to be a meaningful user, future payment updates would be eliminated.
$500 million has been provided to train healthcare providers. Of this amount, $200 million is allocated to nursing and physician education programs. The balance is earmarked for the National Health Service Corporation.

What is the "health" of healthcare providers and when do you estimate the provisions will impact them?

The overall health of most healthcare providers is fair. Few have had exceptional years, while most have remained flat and many have experienced declining margins. As mentioned previously, the FMAP provision will impact hospitals over the next couple of years, while the other provisions will be implemented through 2016.

Do you anticipate further changes to the delivery system under the new administration?

I'm sure there will be proposals once a new Health and Human Services Secretary is named. (At press time, Gov. Kathleen Sebelius' (D-Kansas) had been nominated as HHS Secretary.) It would be premature to speculate on any specific anticipated changes. However, the national media is reporting that the administration's upcoming budget to Congress will include more than $634 billion as a "down payment" on healthcare reform. The administration reportedly plans to fund this appropriation with a combination of tax increases and efficiencies in the Medicare and Medicaid program, which is code-speak for reimbursement reductions. The numbers are mind-boggling, considering the administration is forecasting an almost $2 trillion deficit in 2009. I'm hopeful the administration will carefully and methodically move forward with major changes.