West Virginia hospital, health centers to sue state over inadequate Medicaid pay

One hospital and a group representing community centers in West Virginia filed their intent to bring two separate lawsuits against the state because they say they are inadequately reimbursed for Medicaid enrollees' primary care.

The West Virginia Primary Care Assn. and officials representing Appalachian Regional Healthcare's Beckley Hospital said that despite West Virginia's comparatively flush Medicaid budget, the state pays as little as two-thirds of the cost of certain care for Medicaid enrollees.

"Over the years, community health centers have been denied millions of dollars in Medicaid funding to provide preventive and primary care services," said Louise Reese, executive director of the West Virginia Primary Care Assn.

The hospital and primary care association filed intent to sue notices required by West Virginia law before formal lawsuits can be filed. The association sent its notice to the Medicaid agency on Oct. 18. The hospital followed with its notice Nov. 11. West Virginia Bureau of Medical Services spokeswoman Kimberly Fetty said the agency, which oversees the state's Medicaid program, does not comment on potential litigation.

Of the primary care association's 30 community health center members, 28 are federally qualified. Federal law requires that these centers be reimbursed for office visits based on their cost of care. Reese said the state has never followed that requirement.

The West Virginia Bureau of Medical Services agreed to increase state pay for behavioral health from 63% of costs to 100% of costs, Reese said. The agency agreed to the change after meeting with the primary care association in November. However, the association still plans to file a lawsuit. Several of the 30 health centers the association represents are on board so far, Reese said.

Another Medicaid lawsuit is expected from Appalachian Regional Healthcare, a nonprofit chain with nine hospitals in the state, on behalf of its Beckley Hospital. Medicaid enrollees account for 22% of hospital visits, but the state reimburses only 67% of the hospitals' cost. The state and federal government combined reimbursed the hospital for $9.9 million of its $14.7 million spent on Medicaid patients in fiscal year 2009, said Stephen Price, counsel for ARH and an attorney with Wyatt, Tarrant & Combs of Louisville, Ky.

The state's share of Medicaid spending is minimal, according to ARH. Of the $9.9 million the hospital received for Medicaid care in fiscal 2009, $1.7 million came from the state. The rest was federal matching funds. Of the state's $1.7 million, $1.4 million was generated by a hospital tax, said Rocco Massey, community chief executive officer of Beckley ARH Hospital.

"If the state had put in just $800,000 more, the federal government would have matched it with an additional $4 million," Massey said. "That would have covered [Beckley ARH Hospitals'] Medicaid deficit in fiscal year 2009."

Unlike most states, West Virginia's Medicaid program had a surplus of $350 million this year. However, the state is projecting a $70 million deficit in fiscal 2013, Fetty said.