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Economy

The closing of another rural hospital renews calls for Medicaid expansion

Chip Brownlee

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The announcement that Butler County’s Georgiana Medical Center will close on March 31 of this year has renewed calls for the state to expand Medicaid.

Georgiana Medical Center will become the 13th Alabama hospital to close in eight years, the seventh rural hospital to close. Other rural hospitals that have closed include those in Florala and Elba.

“The rising costs of healthcare coupled with the cuts in reimbursement have made it impractical to maintain financial viability with two hospitals operating in Butler County,” Mike Bruce, CEO of the hospital’s parent company, Ivy Creek, told the Andalusia Star-News. “The partnering of the two organizations is the optimal way to continue to provide overall high-quality healthcare for the residents of Butler County, as well as the surrounding areas.”

Proponents of Medicaid expansion say it would significantly aid rural hospitals in paying their bills.

Rural hospitals across the country, but particularly those in non-expansion states like Alabama, are closing at an alarming rate, largely because an influx of money from more folk covered by Medicaid was intended to offset cuts to Medicare reimbursements built into the Affordable Care Act, President Barack Obama’s 2010 health care law.

With no offset there, hospitals have lost money.

Should Medicaid expansion be on the 2019 legislative agenda? Experts say it has to be

Nearly 90 percent of the remaining rural hospitals in Alabama are bleeding money — operating at a loss and routinely cutting back on staff and services, according to the Alabama Hospital Association.

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“Medicaid expansion is the one thing the state can do to prevent more hospital closures, loss of jobs, and cutbacks on services,” Danne Howard, the association’s chief policy officer, told APR in December.

The association plans to launch a renewed effort early this year to bring the discussion of Medicaid expansion back to the forefront ahead of the 2019 legislative session.

Sen. Doug Jones, D-Alabama, echoed those calls.

“For years, our rural hospitals have been warning public officials about the financial cliff they faced in large part as a result of unfair Medicare reimbursement rates and the refusal to expand Medicaid in Alabama,” Jones said.

Beginning in 2014, the federal government would have financed 100 percent of the costs for those made newly eligible for Medicaid until 2016.

After that, the federal match phases down to 90 percent by 2020, where it will stay, meaning for every dollar the state spends on new enrollees, it would get $9 in return from the federal government.

“How many more rural health care providers need to close for meaningful action to be taken?” Jones said. “This should be a wake-up call — actually, another wake-up call.  We all have a responsibility to take action — to expand Medicaid, to fight for wage index reform, to find opportunities to lower the cost of health care — and to find common ground to best serve our communities.”

As legislators return to Montgomery in March, they’ll face more uncertainty.

Additional cuts to Disproportionate Share Hospital Payments — a payment mechanism that supports many hospitals with a disproportionate number of low-income, uninsured patients and uncompensated care — could go into effect on Oct. 1, 2019, when the fiscal year 2020 begins.

The bulk of those cuts have been routinely delayed by the Republican-controlled Congress since they were set to take effect in 2014 — mainly because it would negatively hit Republican, non-expansion states.

But with Democrats heading into a majority, it isn’t so certain that those cuts will be delayed again.

Cuts to DSH payments could cost Alabama hospitals between $70 million and $156 million. More than 75 percent of Alabama’s more than 100 hospitals receive DSH payments. Those cuts could severely impact both rural and urban hospitals that care for uninsured, low-income patients. Experts fear those cuts could spur a health care crisis that isn’t just confined to rural hospitals and the areas they serve.

Hospitals like those are barely operating in the black, and it wouldn’t take much to put them in the red.

“If the state has not expanded Medicaid in 2020, as the DSH cuts are scheduled to take effect, that will close a significant number of hospitals,” Howard said. “That will cripple. That will be the straw that the hospitals can’t survive.”

Some Republican lawmakers and officials have privately expressed concern about the DSH cuts. If they’re not delayed again this year, they said, it could force the state’s hand.

Rep. Terri Sewell, D-Alabama, introduced legislation last month to incentivize states to expand Medicaid. It would ensure that states who choose to expand Medicaid going forward get a similar federal match to those who chose to expand Medicaid earlier on.

Sewell’s legislation would allow states that expand Medicaid in the future to receive a 100 percent federal match for the first three years, 95 percent for the fourth year, 94 percent for the fifth year, 93 percent for the sixth year and 90 percent for each year thereafter.

“The writing is on the wall and the facts are clear: premiums and health care costs are higher in states that have not expanded Medicaid. And over 90 percent of rural hospital closures have been in states that did not expand Medicaid before the closure. In my state, approximately 314,000 more Alabamians would be covered under Medicaid expansion. Not doing so is a poor decision,” Sewell said. “And while I can’t force Alabama’s governor to expand Medicaid, I can continue to promote legislation that provides more incentives for her to do so.”

Senate President Pro Tem Del Marsh, R-Anniston, has said recently that expansion will not be on the agenda during this legislative session. He reiterated that statement in an interview with APR in December.

“Among the Republican leadership and Republican caucus, when discussions have been made, there has been no initiative, if you will, to expand Medicaid,” Marsh said. “In fact, the position has been to control the costs of Medicaid and to put pressure on the health care community to find ways to make it more efficient.”

But support for the program is spreading to more conservative areas across the country.

Voters in three deeply red states — Idaho, Nebraska and Utah — approved ballot initiatives in 2018 requiring their state to expand Medicaid, and three other states — Kansas, Wisconsin and Maine — elected Democratic governors who are likely to push for expansion.

Alabama is among fourteen states that haven’t expanded the insurance program for low-income residents. The state’s neighbor to the west, Mississippi, is another one of those states, but that could change this year.

Some Mississippi Republicans appear to be supporting Medicaid expansion — with strings attached mostly aimed at reducing the cost to the state, according to the Clarion-Ledger.

A 2012 economic analysis by the UAB School of Public Health found that expansion would cost the state about $770 million over the first seven years in costs, but could potentially result in $20 billion in economic growth over the same time period.

Though professor David Becker’s report is now six years old, the general takeaways still apply, he told APR in December. “The tax revenues generated from expansion would exceed the cost to the state, and so in that sense, it was just sort of a win-win proposition,” Becker said.

Becker and his partner at UAB recently updated their economic analysis.

Medicaid expansion would provide insurance to 346,000 more Alabamians. It would also spur $2.7 billion to $2.9 billion in annual economic activity, according to the updated study.

 

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Congress

Sen. Doug Jones: COVID-19 relief should not be a partisan issue

Chip Brownlee

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Sen. Doug Jones, D-Alabama, said Friday during a live-streamed press conference that the Senate should begin debating the next COVID-19 relief package, and Republicans in Congress should stop playing partisan politics with urgently needed COVID-19 relief.

“That bill is not perfect at all. There are a number of things in there that I don’t think will be in a final bill,” Jones said of the House’s $3 trillion HEROES Act. “It’s not perfect, but it is something to start talking about. It is a shame that Senate Republicans have made this into a partisan issue, trying to say that this was some kind of Democratic ‘wish list.’ It is not.”

The $3 trillion relief package includes nearly $1 trillion in aid to struggling state and local governments and another round of $1,200 payments to individual taxpayers and up to $6,000 per family.

The bill, which passed the House last week along partisan lines, appropriates billions for COVID-19 testing and contact-tracing and provides money for hazard pay for essential workers, among many other provisions its 1,800 pages.

“It is a wish list for cities and counties, which we’ve been talking about,” Jones said. “The first line essential workers that have been there that we don’t need to lose — so much of our workforces in city and county governments. It’s a wish list for the CDC and the NIH to continue funding for research, not just for a vaccine, but for therapeutics for how to treat this virus until we get that vaccine. It’s a wish list for businesses.”

The Paycheck Protection Program, which provides loans and grants to small businesses and nonprofit organizations, would also get additional funding in the new relief bill.

Jones has called for a plan to give small businesses another round of help in paying employees by using payroll processors instead of banks, which have, at times, been slow in delivering aid to businesses and have prioritized clients with whom the banks had a pre-existing relationship.

Jones urged lawmakers to consider using payroll companies rather than banks when the first installment of the Payroll Protection Program was taking shape.

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The House’s HEROES Act also includes provisions that clarify PPP provisions for small businesses and would ensure that PPP funding can reach underserved communities and nonprofits. It adds $10 billion for emergency grants through the Economic Injury Disaster Loan Program.

“It has a form of the program that we have — not as scaled up as much as I would lie, but it’s got a program that will help keep businesses operating and their payroll operating as a supplement, an add on to the Payroll Protection Program,” Jones said. “So it’s a wish list, really, for the American people. It’s just a shame that it has been politicized as partisan, because it should not. None of this should be partisan.”

President Donald Trump has threatened to veto the House-passed legislation were the Senate to pass it, and House and Senate Republicans have decried the legislation as too expansive.

Republican members of Alabama’s congressional delegation have called it Speaker Nancy Pelosi’s “wish list” and U.S. Rep. Mo Brooks called it “socialist.”

The 1,800-page bill also includes $175 billion in housing support, student loan forgiveness and a new employee retention tax credit.

Republicans have particularly opposed provisions in the bill that would require all voters to be able to vote by mail beginning in November and another that would temporarily repeal a provision of the 2017 Republican tax law that limited federal deductions for state and local taxes.

Trump has also opposed a provision in the bill that would provide $25 billion for the U.S. Postal Service, which has struggled amid the COVID-19 crisis and could become insolvent without support.

The HEROES Act was declared by some as “dead on arrival” in the Republican-controlled Senate. Senate Majority Leader Mitch McConnell, R-Kentucky, has so far refused to take up the bill. Senators returned back to their home states this week until early June.

“The goal when we get back is maybe … enough talks will be going on, that we can pass some legislation in a bipartisan way,” Jones said. “Because there is an urgency.”

Jones said he didn’t believe the bill would pass as it is currently written, and that he doesn’t know what the final version would look like, but “we need to be talking about it. It’s a starting point,” he said.

The legislation also provides $75 billion for COVID-19 testing and contact tracing, which public health experts say are essential for reopening the economy safely and avoiding a second wave of the virus in the fall.

On Thursday, Gov. Kay Ivey loosened more of the state’s “safer-at-home” restrictions, allowing entertainment venues to reopen Friday and sports to resume by mid-June.

Jones urged Alabamians to continue adhering to social-distancing guidelines, to listen to public health officials and to wear masks. He said reopening the economy and preserving public health don’t have to be at odds.

“I think the governor has done as great a job as she could to try to be very strategic, to be thoughtful on how to do this,” Jones said. “Unfortunately, I also believe that a lot of people in Alabama are only hearing part of her message. They’re only hearing the message that you can go to church, you can go to the theater, you can go out to eat, and they’re not listening as much to the messages about personal responsibility.”

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Economy

Jefferson County extends closure of night clubs, theaters and other entertainment venues

Chip Brownlee

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The Jefferson County Department of Health has extended closures of “high-risk” entertainment venues in the state’s most populous county as those types of businesses can begin opening in the rest of the state.

“Even though things have been opening up, it does not mean that things are better in our community in terms of the spread of COVID-19,” Jefferson County Health Officer Dr. Mark Wilson said Friday. “In fact, I would say it may be more dangerous now to let down your guard than it has been ever since this pandemic began.”

The extended closures in Jefferson County’s updated health order apply to night clubs, concert venues, theaters, performing arts centers, tourist attractions like museums and planetariums, racetracks, adult entertainment venues, casinos and bingo halls, among others.

“Other than those entertainment venues, this order is the same as the statewide order that was issued yesterday,” Wilson said.

Jefferson County’s order remains in place until June 6.

Gov. Kay Ivey’s amended safer-at-home order, issued Thursday, allows those businesses to reopen with social-distancing restrictions and sanitation requirements statewide.

“The reason we are doing this is that we are continuing to see increases in cases of COVID-19 per day in Jefferson County,” Wilson said. “They have been trending up since that last order was issued statewide on May 8.”

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Wilson said current COVID-19 hospitalizations have also increased from 103 to 130 since the state’s more restrictive stay-at-home and safer-at-home orders were lifted earlier this month.

“We want to stay ahead of it and not get to the point where they are overrun,” Wilson said.

In Montgomery County, hospitals are facing a dire shortage of intensive-care beds as cases there have more than doubled since the beginning of the month.

Jefferson County and Mobile County, which have their own autonomous health departments, have the authority to issue more stringent public health orders.

Wilson said he received approval from State Health Officer Dr. Scott Harris to issue the new order. The governor said Thursday that she would support Mobile and Jefferson County should the issue more stringent orders.

The Jefferson County health officer continued to encourage residents to wear face masks or another face covering while out in public.

“We all need to protect each other,” Wilson said.

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Economy

Alabama’s unemployment rate jumps to 12.9 percent

Chip Brownlee

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Alabama’s unemployment rate has surged almost 10 percentage points over the past two months to nearly 13 percent, the Alabama Department of Labor said Friday, another sign of the economic toll caused by the COVID-19 pandemic.

Labor Secretary Fitzgerald Washington said Alabama’s preliminary, seasonally adjusted April unemployment rate is 12.9 percent, which is up from March’s revised level of 3.0 percent. It’s also higher than April 2019’s rate of 3.2 percent.

Last month’s rate represents 283,787 unemployed persons, an increase of 216,783 over the month.

“While we are certainly disappointed to see our unemployment rate rise so sharply this month, it’s not surprising,” said Gov. Kay Ivey. “This global pandemic and national disaster has certainly impacted Alabamians’ ability to work. We know that hundreds of thousands of people have filed for unemployment benefits over the past two months, and we’ve been able to process and pay a great majority of those.  We realize there are some still waiting on relief, and we hear and understand their frustration.  Please rest assured that my administration is working tirelessly to provide relief to those Alabamians and their families, and I have the utmost confidence in the Alabama Department of Labor and the dedicated state employees there who are working tirelessly to serve their fellow citizens.”

Those counted as employed decreased to 1,911,512 in April, down from March’s count of 2,151,586.

“I think everyone will agree that these numbers aren’t numbers we ever wanted to report,” said Washington. “This pandemic has negatively impacted Alabama’s economy and in two months’ time has managed to undo years of positive progress.  But the impact to our employers and workers who carry the economy is even greater.  So many had life-altering changes that impacted their families almost overnight.  I want all Alabamians to know that we are working nonstop to help move this recovery along.  We are developing new technologies, adding staff, and making modifications wherever possible to help our workers through this enormously difficult time.”

Wage and salary employment decreased in April by 201,700.

Monthly losses were seen in the leisure and hospitality sector (-79,500), the professional and business services sector (-29,500), the education and health services sector (-26,400) and the manufacturing sector (-24,200) — among others.

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Over the year, wage and salary employment decreased by 199,200, with losses in the leisure and hospitality sector (-87,900), the professional and business services sector (-30,800), the education and health services sector (-25,300), and the manufacturing sector (-19,100), among others.

Average weekly wages increased to $908.52 in April, up from $883.17 in March.

Counties with the lowest unemployment rates are Geneva County at 8.1 percent, Bullock and Pike Counties at 9.1 percent, and Shelby and Henry Counties at 9.2 percent.

Counties with the highest unemployment rates are Lowndes County at 26.0 percent, Wilcox County at 22.8 percent and Greene County at 22.2 percent.

Major cities with the lowest unemployment rates are Homewood at 7.1 percent, Vestavia Hills at 7.2 percent and Madison at 8.3 percent.

Major cities with the highest unemployment rates are Selma at 23.4 percent, Anniston at 22.1 percent and Gadsden at 22.0 percent.

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Economy

President Trump approves Alabama disaster declaration

Brandon Moseley

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President Donald Trump on Thursday declared that a major disaster exists in the state of Alabama and ordered federal assistance to supplement state, tribal and local recovery efforts in the areas affected by severe storms and flooding from February 5 to March 6, 2020.

Federal funding is available to state, tribal and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by the severe storms and flooding in Butler, Chambers, Choctaw, Colbert, Covington, Crenshaw, Cullman, Dallas, Fayette, Greene, Lamar, Limestone, Macon, Marion, Perry, Randolph, Tuscaloosa and Wilcox Counties.

Federal funding is also available on a cost-sharing basis for hazard mitigation measures statewide.

Pete Gaynor is the administrator of FEMA.

Gaynor named Terry Quarles as the Federal Coordinating Officer for Federal recovery operations in the affected areas.

Additional designations may be made at a later date if requested by the state and warranted by the results of further damage assessments.

Residents and business owners who sustained losses in the designated counties can begin applying for assistance by registering online.

Or by calling 1-800-621-FEMA(3362) or 1-800-462-7585 (TTY) for the hearing and speech impaired. The toll-free telephone numbers will operate from 7:00 a.m. to 9:00 p.m. (local time) seven days a week until further notice.

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