Feds pledge $131M for state safety net hospitals
Congress last week approved a measure to provide $131 million next year to Tennessee safety net hospitals, including Vanderbilt, that provide the bulk of the state's charity care.
The move restores — for one year — federal disproportionate share (DSH) payments that have not been in place since TennCare was implemented 12 years ago.
Precise details are still being determined, but based on past history it's possible that Vanderbilt could receive approximately 10 percent of that total, or more than $13 million.
“We are extremely pleased that the federal government recognized, and responded to, the needs of Tennessee hospitals,” said Harry Jacobson, M.D., vice chancellor for Health Affairs. “These payments will assist us in our ability to continue providing the best possible care to the state's most financially vulnerable individuals.”
The measure — attached to a sweeping tax bill passed by the U.S. House of Representatives and the Senate late last week — was a high priority of U.S. Sen. Bill Frist (R-Tenn.) in his final days as Senate Majority Leader.
“Approval of a DSH payment to Tennessee hospitals is a significant event, and we are thankful to Gov. (Phil) Bredesen and Sen. Frist for pursuing this important piece of legislation,” said Warren Beck, M.B.A., VUMC's director of Finance.
It is hoped the one-year payment could open the door to future discussions with federal lawmakers about extending yearly DSH payments to Tennessee hospitals. These were suspended in 1994 when the state was allowed to create TennCare to replace the federal Medicaid program. While TennCare has since been scaled down, the need to care for the state's most financially at-risk citizens continues to soar.
Tennessee is one of only three states that do not receive annual DSH payments. According to the Tennessee Hospital Association, states with similarly sized enrollments receive about $430 million per year under the program.
Vanderbilt is, by far, the largest provider of charity care in Middle Tennessee and is the second largest in the state, trailing only Memphis Regional Medical Center (the Med). In fiscal year 2005, Vanderbilt's total uncompensated care — comprised of charity care, medically indigent care and bad debt — stood at $98.7 million.
That figure jumped to $195.2 million last year.