Wyoming hospitals received $40 million in property taxes last year. But although the money helps the hospitals’ bottom line, it doesn’t cover all costs of providing care to low-income people who can't pay for services, according to a report by the Wyoming Legislative Service Office.
Those costs ran at least $100 million in 2013 and $116 million in 2012, stated the report that was given to the Joint Labor, Health and Social Services Interim Committee ahead of a June meeting.
Hospital administrators said if the state accepted federal money to expand Medicaid, hospitals would receive more money to fill the gap of uncompensated care. Elected officials, however, disagree.
Labor committee members are spending the time between the 2015 and 2016 sessions studying hospitals, uncompensated care and primary care needs throughout the state. The Legislature defeated a possible expansion, an Obamacare initiative, that would have provided health care to 17,600 Wyomingites without coverage. Medicaid expansion will unlikely pass in the 2016 session, legislators and advocates have said.
Of Wyoming’s 32 hospitals, 15 are governed by hospital districts that collect property taxes, such as Ivinson Memorial Hospital in Laramie or Campbell County Memorial Hospital in Gillette, according to the Legislative Services Office research.
Seven are county memorial hospitals, which means county commissions distribute a portion of property tax revenues to the hospitals, such as Sheridan Memorial Hospital or Memorial Hospital of Converse County in Douglas.
The remaining hospitals are managed by private companies for profit, are owned by private groups but managed as nonprofits or have unique arrangements, such as Casper’s Wyoming Medical Center, in which Natrona County owns the buildings and land and Wyoming Medical Center Inc., a nonprofit group, manages the business side.
“What I took away is there is some local tax support for most of the hospitals in the state, not all but most,” said Sen. Charlie Scott, R-Casper, co-chairman of the legislative committee. “And of course the county taxing and the hospital district taxing ability varies radically across the state. If you’re in Niobrara, Platte, Goshen, Hot Springs, Albany (counties), you can’t get much tax support because the mill levy doesn’t raise that much because there’s not much minerals.”
By law, many hospital districts can collect twice the amount they are currently collecting, according to the data.
But hospital districts would have to put the tax increase before voters, said Eric Boley, president of the Wyoming Hospital Association.
“Taxes are a political thing,” he said. “I think for a lot of them, it would be hard for them to get their community to support an additional (tax). ... They may be hesitant to take it to the voters.”
Boley said Medicaid expansion is part of the solution to make hospitals whole. He cited a study showing hospitals in states where there’s been expansion are doing better financially.
“In Colorado, their state hospital association director told me all of their hospitals, they’re all in the black,” he said. “Of course, they went early, they expanded the first year.”
The Niobrara Health and Life Center in Lusk is one hospital that receives all the taxes it can legally ask for, which was $789,008 in 2014.
It has received the maximum level in taxes since 2005, when the hospital reopened after being closed for three years. The community supported reopening the hospital -- they’re an hour away from the next town -- and paying the highest level of taxes, said Heather Irvine-Goddard, the hospital’s assistant administrator.
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The hospital administrators would like expansion.
“We never turn anybody away from our emergency room, and if that emergency room visit leads to an office visit, we probably wouldn’t have turned them away,” she said.
But there are many adults with mental and behavioral health issues who aren’t receiving regular treatment because they cannot afford it. That affects their ability to work and be productive community members, she said.
Brad Basse, chairman of the Hot Springs County Commission, which provided Hot Springs County Memorial Hospital $200,000 last year from property taxes and a portion of motor vehicle registration fees, is weary of expansion.
“It’s a double-edged sword,” he said. “It comes with strings attached. We’re weary of taking it now and having it taken away later, and recognizing the state would have to take money out of state budgets (if it were to continue with expansion.)”
But uncompensated care is a huge expense for the hospital, he said. He would like the Legislature to give hospitals such as his more money for uncompensated care.
A couple years ago, a group of residents formed a political action committee and asked the public to change the hospital’s structure from being a county memorial hospital to a hospital district with taxing authority. Basse said he supported the effort.
“I recognize the importance of the hospital to my community and had been through enough of the budget process and those kinds of things to see that the path we’re on is probably not sustainable,” he said. “A district actually would provide a known stream of income.”
The measure failed.
“They didn’t like the idea of once it’s voted in, it’s forever,” he said. “There was no way to sunset that tax.”
Scott, the senator, opposes hospital districts increasing taxes because he doesn’t believe any taxes other than tobacco should be increased.
Scott remains one of the Legislature’s ardent opponents to Medicaid expansion, because he thinks the federal government -- which is footing expansion costs in each state -- will run out of money to continue to provide the program, leaving states hanging.
He cited a Wall Street Journal story that said in the 22 states that accepted Medicaid expansion, hospitals’ unpaid bills fell 13 percent but operating margins didn’t increase because of low reimbursement by the federal government for Medicaid patients’ care.
Scott also doesn’t believe that hospitals’ uncompensated care expenses are at a critical level, since many hospitals didn’t respond to legislative staff questions about finances.
“Some of the big ones didn’t want to share,” he said. “That says to me they didn’t have a big problem. They want to complain but they’re doing fine. Common sense says if they want money from the state, they’re going to have to be forthcoming.”