The Hospital & Healthsystem Association of Pennsylvania (HAP) welcomed this week’s 2010–2011 state budget deal between legislative leaders and the Governor.

"This budget is a ‘win-win-win’ for our patients, our hospitals, and the Commonwealth," said HAP President and CEO Carolyn F. Scanlan. "Better and more stable Medical Assistance funding for hospitals will help to preserve and enhance patient access to care, provide hospitals with additional funding needed to improve quality and safety for all patients, and contribute approximately $246 million in revenue to the state over the next three years."

The budget agreement includes a modernized Medical Assistance (MA) payment system that will improve and stabilize reimbursements to hospitals while simultaneously providing a stable source of funds to the Commonwealth.

In an effort to solve the problem of chronic underfunding of hospitals and help the state address its budget shortfall, HAP and Pennsylvania’s hospitals came forward with a proposal for a new system that improves MA payments to hospitals and preserves hospital supplemental payments (burn, trauma, OB, inpatient/outpatient disproportionate share, medical/health professional education, community access fund, critical access hospitals), while generating revenue through an assessment on hospitals that will leverage federal matching funds.

Over the past several months, the HAP Public Payor Policy Committee, of which St. Joseph President and CEO John Morahan is a member, provided guidance and led the effort to improve the MA payment system for hospitals in the state.

"I was committed to advancing the work of the committee noting St. Joe's dedication to caring for the poor and our willingness to participate in all Medicaid insurance plans so those in need in our community have accessible healthcare," Morahan explained. "HAP's approach to assisting the state with gaining additional federal dollars—while improving and modernizing Medicaid payment for St. Joe's and the other Commonwealth hospitals—is innovative and commendable."

Pennsylvania’s hospitals have operated under a reimbursement system that dates back to the 1980s, where MA reimbursements today average just 80 cents for every dollar of hospital costs. This has made it extremely challenging for hospitals to meet the health care needs of Pennsylvania’s families. From Fiscal Year '06 to Fiscal Year '09, St. Joseph absorbed nearly $35 million in unpaid costs of Medicaid and Charity Care.