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No Can Do: Subsidy cannot be used for Medicaid match

The U.S. Centers for Medicaid and Medicare (CMS) have not changed their policy and therefore the Interior Department subsidy cannot be used as Medicaid matching funds by LBJ Medical Center, says a CMS spokesman, who declined to comment further on any ongoing negotiations.

 

Prior to leaving her post early last month as LBJ’s chief financial officer, Viola Babcock was opposed to having the U.S. Department of Interior subsidy for the medical center be drawn down by the ASG Treasury Department.

 

She was also concerned about, and opposed using the subsidy as matching funds for the Medicaid program, saying that CMS does not allow the use of the DOI subsidy as local matching money for Medicaid.

 

Asked if the CMS had changed its policy, thus allowing the DOI subsidy to be used as matching funds, CMS spokesman Jack Cheevers with the San Francisco region office, responded, “Our policy hasn't changed with regard to the use of DOI funds as a local Medicaid match.”

 

“And I'm afraid we don't comment on any ongoing negotiations,” he said via email, responding to a question as to whether CMS, DOI and ASG are negotiating the possible use of the DOI subsidy as matching funds.

 

Samoa News reported last month that negotiations have begun for the use of subsidy as matching funds.  According to a copy of Babcock’s email last month to certain LBJ and DOI officials, approval had already been granted by DOI to allow the draw down of LBJ's subsidy by the ASG Treasury, giving the Governor’s Office majority control of the hospital’s revenue sources, which are subsidized by DOI, and Medicaid (which is under the Governor’s Office).

 

A copy of LBJ’s cash projection spread-sheet, obtained by Samoa News, shows that the hospital received $3.85 million in DOI subsidy during the first six-months of fiscal year 2013 (up to Mar. 31, 2013). LBJ is projected to continue to receive its subsidy for the last six-months of the fiscal year.

 

The spread-sheet also shows that up to Mar. 31 (covering the first six-months of FY 2013), LBJ received $3.38 million in Medicaid funding. The rest of the fiscal year, LBJ was projected to get only $2.93 million with a footnote saying “limitation of funding due to match”—with no other explanation.

 

Based on the projection, LBJ is expecting $1.33 million for April, $800,000 each for May and June but nothing for July, August and September.

 

And due to “insufficient” funds to providing a match, the spread sheet shows that LBJ didn’t get any funds from the federal Affordable Care Act (Obama Care) program and none are projected to be received for the rest of the fiscal year, unless there are matching funds.

 

(LBJ’s FY 2013 budget calls for receiving just over $14 million in Medicaid and ObamaCare funds.)

 

The hospital is also affected by the governor’s order for a reduction of 10% across the board for all ASG agencies, due to the federal sequestration. The impact on LBJ comes from its monthly ASG subsidy.

 

(LBJ had requested $5 million in ASG subsidy for FY 2013 but the Fono last year cut-out one million, arguing that the hospital was getting $1.25 million from the 2% payroll tax —which LBJ is not getting a penny of, for the entire fiscal year.)

 

Between October 2012 and March this year, LBJ collected $333,333 each month in ASG subsidy, but from April to September, LBJ is projecting to get only $300,000 per month.