Although Lawrence Memorial Hospital will be affected by the announced suspension of Medicaid payments to hospitals, the severe cash flow problems in March that caused the hospital to prepare to borrow money to meet its payroll will not be repeated.
Robert Ohlen, chief executive officer at LMH, said the hospital will be able to "ride out . . . without difficulty" the payment suspension announced Tuesday by the Kansas Department of Social and Rehabilitation Services.
Ohlen said the amount due LMH from Medicaid that will be held up is about $100,000, and the suspension will last about 45 days.
Kathryn Hauck, administrator of operations services in the division of medical programs for SRS, said Medicaid payments to hospitals scheduled for Tuesday and for June 15 have been held up because money in its medical assistance fund is running low.
HAUCK SAID the department will decide June 22 whether to keep the suspension in effect for the rest of the month.
The suspension of payments will not apply to doctors, pharmacists and others who provide health care services to people who receive help through the Medicaid program.
Medicaid provides payments for medical services for the poor. About half the money in Medicaid is from the federal government, and the other half comes from the state, which administers the program.
Ohlen said that unlike in some past years, SRS has promised to make up the payments in the new fiscal year, which starts in July.
"There have been situations in the past when the program (Medicaid) ran out of money in May and has not made payments in May or June," he said. "We ended up having to write off those bills. This year they're going to make good."
OHLEN SAID Medicaid accounts for about 8 percent of the hospital's budget.
In March, the LMH board of trustees granted administrators authority to borrow $300,000 from another hospital fund used to cover building depreciation in order to meet payroll.
The bulk of the shortfall then was caused by delayed reimbursement from the federal Medicare program, the federal health care program for people over age 65. Medicare makes up about half of the LMH budget.
Because payments came in at a fast enough rate to meet the hospital's approximate $260,000 payroll, administrators never had to use that borrowing authority.
Hauk said SRS frequently has been forced to hold off on making payments at the end of the fiscal year because of dwindling funds.
``THIS IS not an unusual occurrence for this time of the fiscal year,'' Hauck said.
``The amounts withheld may be slightly larger, and we are starting it a little earlier because of the budgetary problems the department is facing,'' she said.
The Kansas Legislative Research Department reported there was only $22 million in the medical assistance account to pay bills that had accumulated through the end of May. The department said $14 million or $15 million of that would be used to pay nursing homes. The balance would be used to pay doctors, pharmacists and other health care providers.
Hospitals, which are usually paid twice a month, are the providers who can most easily absorb a delay in Medicaid payments, Hauck said. Nursing homes and doctors usually are paid only once a month and might encounter cash flow problems if their Medicaid payments are delayed, she said.