What should have been a lifeline for Mississippi’s struggling hospitals is proving to be out of reach for the facilities that need it the most.
State lawmakers approved sending millions of dollars to save Mississippi’s struggling hospitals during the session, but now many hospital leaders are running into difficulties trying to access that money.
A third of Mississippi’s rural hospitals are at risk of closure — many of them were counting on the state grants to survive the year.
Legislators in February established the grant program, part of Lt. Gov. Delbert Hosemann’s plan to save rural hospitals in lieu of expanding Medicaid. A month later and just days before the end of the legislative session, they decided on the amount: $103 million to be disseminated among the state’s struggling health care providers.
It was millions less than the Mississippi Hospital Association had advocated for — despite a $4 billion surplus in the state budget — but health care leaders said they would take what they could get.
Hospitals were allocated varying amounts through a formula that accounted for bed counts, hospital designation, emergency rooms and other factors.
But there was a hitch — the money wouldn’t come from the state general fund. Instead, it would come from American Rescue Plan Act funds, federal money meant to ease the financial hits taken by the pandemic.
MHA director Tim Moore, whose organization helped craft the program, said it wasn’t clear then how much the source of the money would affect hospitals’ ability to access it.
“I think the Legislature felt that it would not be a problem … to get the money out,” he said. “We were looking at them actually cutting grant checks to the hospitals. When ARPA money was applied, that changed the whole thing.”
ARPA funds can only be used to cover COVID-related expenses, and many hospitals have already claimed those federal pandemic reimbursement dollars. Expenses claimed through ARPA cannot have been claimed under any other federal and state reimbursement programs, rendering the grant money useless to many Mississippi hospitals.
According to Paul Black, CEO of Winston Medical Center in Louisville, that makes the grant bill more of a reimbursement bill.
“I don’t know who came up with the bright idea to use ARPA money. If they did, they definitely did not understand what that meant to this program,” he said.
“It’s just extremely frustrating that one of the pieces of the legislation … is one thing and the appropriations is something completely different. I don’t understand how they can do that, I really don’t.”
Gov. Tate Reeves, who sent out a release emphasizing his role in the program’s passage, declined to comment about the grant situation.
In a statement sent to Mississippi Today after this story published, Hosemann said, “Our intention was to provide $103 million to hospitals based on a formula related to type of operation and bed count to help stabilize them. If any hospital is shorted because of complications with the federal ARPA structure of the grant, I will support legislation at the beginning of the Session to make up the difference.”
House Public Health Chair Sam Mims, author of House Bill 271 which funded the program, did not respond to a request for comment.
Senate Medicaid Chairman Kevin Blackwell, author of Senate Bill 2372 which established the program, deferred questions about hospitals’ issues with the grant program to state Health Officer Dr. Daniel Edney.
The state health department is tasked with distributing the funds, and because it’s now tied to federal ARPA funds, has to work with the state department of finance and administration to do so, Edney said.
During the bill process, Edney said the health department pointed out the pitfalls of using the ARPA money.
“Federal money … doesn’t take up state resources from other places,” he said. “The downside is it has to follow federal guidelines versus state general funds.”
One of those downsides has already become clear: The allocation based on hospitals’ number of licensed beds has been struck, on account of federal guidelines. That means hospitals, if they get money at all, will definitely be getting less than expected.
Senate Public Health Chair Hob Bryan said he’s received questions about the grant program from hospital officials and others, and that he still doesn’t have all the answers.
“I’ve asked questions, and I’m still confused,” Bryan said. “I talk with A, and A says one thing, then I talk with B, and B says something else.”
“I think there’s a lot of confusion over whether a hospital would have to have already spent money on COVID expenses and can be reimbursed, or whether they can spend in the future. One of the things I’ve been told is that if you are improving things at your hospital to deal with COVID, or to prepare for the next COVID, then you will be eligible under the regulations.
“Hospitals’ reactions appear to be, ‘That’s all well and good, but I’m going broke and this says I can spend more money and get reimbursed, but that doesn’t help me right now,’” Bryan continued.
Bryan said he believes questions and confusion about the program are in part because of the hasty, secretive process Mississippi legislative leaders have used to set budgets in recent years.
“We do everything in secret, and then put it all together at the last minute,” Bryan said. “Transparency, like say, in conference committees and the rest of the process might help, in that issues like this could be identified and addressed before it’s passed. Discussing these things more in the open could provide better results … Of course, we had the House refusing to negotiate on this or anything else because they were holding out for tax cuts, then they tried to do everything in the last 36 ½ minutes.”
Black agreed that hammering out funding details at the last-minute likely contributed to this oversight — an oversight that’ll have grave consequences for state’s hospitals.
“We got all these legislators that are patting themselves on the back for doing something for the hospitals,” Black said. “When it comes out, they didn’t do anything. At least for us to get what was promised in the Senate bill is not what is taking place now.”
Some of the state’s larger hospitals might be able to get their hands on some of the money. But it’s less likely that the state’s smaller, rural hospitals, who are in much more dire financial straits, will be able to.
“The whole intent of this was to help small rural hospitals,” Moore said. “That’s going to be much more of a challenge.”
Winston Medical Center was set to receive a little less than a million through the grant program. Because of the funding complications, the hospital actually won’t get anything at all.
“Unless the Department of Health comes up and finds out some way to get around some of the issues … as things sit right now, there’s no avenue for us to claim any money,” Black said.
The money would’ve been enough to cover about a month’s worth of payroll, Black said, but in the larger scheme of things, it would’ve helped Winston stay open until the end of the year and staunch the “slow bleed.”
Winston, though, is in a far more stable financial state than many other rural hospitals.
Before the grant money and a big credit line approval, Greenwood Leflore Hospital was weeks from shutting down. It’s not clear how the new developments will affect its financial viability.
Gary Marchand, the hospital’s leader, said it was too early in the process to answer Mississippi Today’s questions, but said he believes the complications caused by the ARPA funding will just slow down when the hospital will receive its allocation.
“We understand MSDH is moving quickly,” Marchand said.
Hospitals can apply for the money during a one-month window that starts June 1. Edney said once a hospital’s application is approved, he’s hoping to get the money over immediately.
However, Black is more cynical about the reality of the situation.
“That’s what they said when they passed the bill back in April, and now it’s the end of May going into June,” Black said. “If anybody gets it by September, it’ll be a miracle.”
Unless a special session is called to address the funding issue, Moore and Black are looking toward the next legislative session for help. They’re hoping that most hospitals survive until then and that state leaders come around to seeing the economic advantages to expanding Medicaid in Mississippi, which would bring millions of dollars to the state’s hospitals.
“The analogy I keep thinking about is Charlie Brown, Lucy and the football,” Black said. “Lucy holds the ball for Charlie Brown to kick, and at the last minute, she pulls it back. He falls on his rear end.
“That’s what this has been like.”
Reporter Geoff Pender contributed to this story.
Editor’s note: This story was updated after publishing with a statement from Lt. Gov. Delbert Hosemann.
Correction 6/1/2023: This story has been updated to reflect Lt. Gov. Delbert Hosemann’s plan for the money.here.