Healthcare Providers Ponder Closure if Budget Impasse Results in Medicaid Payment Delays

If you are a healthcare provider in West Virginia today – a dentist, doctor, counselor, therapist – and a Medicaid patient comes into your office for treatment, you might not get paid for seeing them. Or the payment will be delayed for…well you don’t actually know how long the payment will be delayed.

This is all due to the state budget crisis.

In late April, the West Virginia Bureau for Medical Services sent out 24,000 letters to healthcare providers that accept Medicaid warning them that if state lawmakers didn’t approve a budget quickly, there could be a delay in reimbursements for the cost of treating Medicaid patients.

For some providers? 

“Approximately 80 percent of our revenue is Medicaid funded,” said Kathy Szafran, President and CEO of the non-profit Crittenton Services in Wheeling.

“So when you are looking at a delay in payment of 80 percent of your revenue, that’s very significant.”

Crittenton is known for its work with young women who are at-risk, pregnant or parenting. But according to their website, they make mental health services available to about 30 percent of West Virginia’s population.

Szafran said that for many of Crittenton’s patients in all of their service areas, this is their only real option for receiving care.

But if lawmakers do not approve a budget before June 30 and Crittenton doesn’t receive payments for 8 of the ten patients they serve, then “the agency will have to self-sustain itself while the revenue grows, which is very difficult,” said Szafran.

Crittenton has an endowment, but Szafran said if they burn through it, then the agency, which has been around for over 120 years, would become unstable in the long-term.

Szafran said to deal with potential funding issues, they will put a hold on hiring new staff, expanding new projects and taking on new clients. If the budget crisis continues and the payments are delayed for an extended period of time, then the agency will be forced to fire staff and close offices.   

But the letter from the Bureau for Public Health doesn’t just affect non-profits.

“Nobody is there to back us up if we go under, I mean nobody cares if we go under,” said Carol Buffington, a dentist practicing in rural southern West Virginia. She said even though she is in private practice, about 50-55 percent of her clients are covered by Medicaid.

“West Virginia Dental Association wants us all to take care of the children. That has to be our first priority,” she said firmly.

More than 90 percent of the children eligible for Medicaid in West Virginia are covered by the program.

While lucky non-profits like Crittenton have endowments, private providers like Buffington will have to dip into cash reserves. For her, that’s her retirement. She said continuing to serve the children may cost her the business. Without the Medicaid payments, she could last “maybe 60-90 days.”

Buffington serves on the West Virginia Medicaid advisory board and says she knew the letter was coming. She watched the numbers of the coal and natural gas severance tax revenues dwindled over the past year and a half.

However, both Buffington and Crittenton’s Szafran wondered if the letter was “for real” or if it was just a political ploy to force legislators  to reconvene and quickly pass a balanced  budget. In the meantime, the clock counts down as both private and nonprofit providers wait to see what the final deal means for them.

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from the Benedum Foundation.