$30 Million In Funding Announced For Erlanger From Public Hospital Pool

Tuesday, April 1, 2014

The Centers for Medicare and Medicaid Services (CMS) announced Tuesday that Erlanger Medical Center in Chattanooga will be added to the Public Hospital Supplemental Payment Pool (PHSP). 

The move means an additional $30 million this year for Erlanger, which handles the bulk of charity care here and is the region's trauma center.

Since he came to the facility new Erlanger President Kevin Spiegel has been seeking to get Erlanger included in the pool, saying he did not understand why it had not been included in the past.

Erlanger recently has taken a number of steps to try to get the budget back in balance, including the unpopular move early last month of freezing paid time off. Mr. Spiegel said that move would be reversed should the hospital be successful in tapping into the federal pool of funds.

Rep. Chuck Fleischmann said, “After months of work, I have been informed that Erlanger will be added to the PHSP and will receive $30 million in funding this year.  This support is crucial for Erlanger to continue their great service as a premier public hospital serving the people of Chattanooga and East Tennessee.

"This decision rights a wrong that had been going on for too many years and I applaud the decision of CMS and the efforts of Senators Corker and Alexander, as well as our entire House delegation, to ensure Erlanger is able to continue their important work throughout our community.” 

The offices of  Senators Bob Corker and Lamar Alexander said the funds came available when the Centers for Medicare and Medicaid Services (CMS) granted a portion of TennCare’s waiver request that provides Tennessee an additional $80 million for the Essential Access Hospital payments in the absence of Tennessee Medicaid disproportionate share hospital (DSH) program funding for this current fiscal year.

The waiver also adds Erlanger to the Public Hospital Supplemental Payment (PHSP) Pool. 

Senator Corker said, “I’m pleased CMS has granted a portion of TennCare’s waiver request, ensuring Tennessee hospitals can continue to provide uninsured and low-income patients with vital health care services. While this partial waiver is only a temporary fix, I remain committed to working with Senator Alexander to find a permanent solution as soon as possible so Tennessee patients, doctors and hospitals are not faced with this uncertainty each year.”

Senator Alexander said, “These dollars help Tennessee’s hospitals provide care for Tennesseans who need help the most. There’s no reason in the world why Tennessee should be the only state without this kind of payment. I’ll continue to work with Senator Corker on a permanent solution.”

The two senators said Tennessee "is the only state in the nation that does not have permanent access to the Medicaid DSH program. In January, the entire Tennessee delegation wrote to Marilyn Tavenner, administrator for the Centers for Medicare and Medicaid Services, expressing strong support for TennCare’s waiver request, which expired on Sept. 30, 2013.

When TennCare was created through a waiver in 1994, the state agreed to eliminate the Medicaid DSH payment, believing the majority of the uninsured and uninsurable would be covered through the new TennCare. Unfortunately, costs began to escalate quickly and continue to grow, and by 2005, the TennCare coverage experiment ended, it was stated.

Tennessee hospitals provided more than $700 million in unreimbursed TennCare costs last year. In addition to the unreimbursed costs, Tennessee hospitals provided $970 million in charity care and lost an additional $730 million on services provided to Medicare enrollees. This resulted in over $2.4 billion in unreimbursed cost from charity care and government funded health care programs.

In past years, Congress passed legislation that included a partial payment of the Medicaid DSH reimbursement for Tennessee hospitals.



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