Rural NC hospitals applaud move toward Medicaid expansion – but not a tacked-on change

By Sarah Nagem

North Carolina moved a step closer this month to expanding Medicaid, much to the delight of rural hospital leaders who say the change would help them recover some of the costs of caring for uninsured patients. 

The state Senate voted nearly unanimously to expand the federal and state program. The state House likely won’t vote on the measure until next year. 

In counties served by the Border Belt Independent – Bladen, Columbus, Robeson and Scotland – health care officials say Medicaid expansion is especially important. Rural hospitals typically serve a disproportionate number of patients who are uninsured or underinsured. 

UNC Health Southeastern in Robeson County, for example, provided more than $63.2 million in uncompensated care in 2020, during the first year of the COVID-19 pandemic, according to the North Carolina Healthcare Association. 

But some local leaders say they are concerned about a proposal included in the Medicaid expansion bill that would partially repeal the state’s Certificate of Need regulations. 

Under the proposed change, private health care companies could more easily open offices for out-patient surgeries, imaging services and more. That would take much-needed profits away from rural hospitals that use the money earned from such services to help the uncompensated care often provided in emergency departments. 

“Particularly rural hospitals make a small margin,” said Jason Beck, CEO of Columbus Regional Healthcare System. “So you’re talking about a razor-thin margin potentially being eroded through competitive forces that might not have the altruistic vision that nonprofit hospitals have.” 

North Carolina is one of 35 states with a Certificate of Need law. Under North Carolina’s program, health care providers must get permission from the state Department of Health and Human Services before expanding services or starting new services.  

The law is meant to restrict “unnecessary increases in health care costs” and prevent duplication of services in geographic areas, according to DHHS

Greg Wood, CEO of Scotland Health Care System, said he wondered why changes to the Certificate of Need law became linked with Medicaid expansion, since the two are seemingly separate issues. 

If the Certificate of Need changes occur, Wood said, Scotland Health might have to make tough decisions to account for loss of revenue from surgical and imaging services. Some community outreach and mobile services could be eliminated. 

That’s bad news, Wood said, in an aging county like Scotland where nearly 30% of residents live in poverty. “We can’t afford to have competitive services that don’t serve all patients,” he said.

More people would qualify

Republicans in the General Assembly have pushed back against Medicaid expansion for years, since the Affordable Care Act became law in 2010. North Carolina is one of only 12 states that haven’t expanded the program, which provides health care benefits to poor residents. 

Now, North Carolina could receive up to $1.5 billion in federal funding for expansion. 

“The facts now are different than what the facts were two years ago,” state Sen. Danny Britt, a Republican who serves Robeson and Columbus counties, previously told the Border Belt Independent. 

Expanding the program could provide health care benefits to an additional half a million people across the state – people who make too much money to qualify for existing Medicaid but who work in jobs that don’t offer health care benefits or who cannot afford insurance on their own. 

In the four-county region of Bladen, Columbus, Robeson and Scotland, an additional 23,000 people could qualify for Medicaid under an expansion, according to figures from the Cone Health Foundation and the Kate B. Reynolds Charitable Trust. (The KBR trust funds the Border Belt Independent.)  

In Robeson alone, an estimated nearly 14,000 could qualify – about 8% of the county’s population.

Many people without health care benefits end up in emergency departments when they become very ill. Hospitals, which don’t turn away patients who can’t afford to pay, then provide care without any compensation. 

If more people get enrolled in Medicaid, hospitals would get some money for treating them – albeit at a lower rate than what most private insurance companies pay. 

“It would go a long way in decreasing the amount of unreimbursable health care that we provide,” Beck said.

Columbus Regional Healthcare System provided about $1.8 million in uncompensated care in 2020, according to the North Carolina Healthcare Association. 

That figure includes “charity care,” payments from Medicaid and Medicare that didn’t cover the complete cost of services, and uncollectible debt from patients, said Cynthia Charles, vice president of communications for the NCHA.  

Bladen County Hospital provided about $2.9 million in uncompensated care that year, and Scotland Memorial Hospital provided about $35.9 million, figures show. 

UNC Health Southeastern expects to see up to $3 million in additional funding each year under Medicaid expansion, said Alan Wolf, director of news for UNC Health. 

“Health care systems such as UNC Health Southeastern have to delicately balance our caring and healing mission with the provision of care regardless of an individual’s ability to pay. We will maintain an emergency room, operating rooms and support services necessary to treat anyone at a moment’s notice,” Wolf said. “This is an expensive business but a critical part of improving the health of our community.” 

Access to care

North Carolina’s Border Belt is home to some of the poorest and least healthy counties in the state. They also have a higher percentage of uninsured residents. 

Health care advocates say access to care in the region is a critical issue. They also say Medicaid expansion would help many people gain access to regular doctor visits. 

Many families simply can’t afford preventative care, Beck said, particularly now that gas prices are so high and inflation has driven up the cost of groceries and basic necessities. “For routine health care, that’s way down the list in terms of priorities for many rural North Carolinians,” he said. 

Wood agreed. He said politicians in the General Assembly are finally paying attention. 

“People are struggling more than they ever have,” he said, “and maybe it’s getting through to those folks.”

Hospitals are struggling too, with labor shortages and increased costs. 

“Many North Carolina hospitals, especially rural hospitals, are currently in a perilous place financially after giving their all to protect our state during the COVID-19 pandemic,” said Cynthia Charles, vice president of communications for the North Carolina Healthcare Association. 

Expanding Medicaid would help, some say, but potential changes to the Certificate of Need law could further complicate things. 

“At a time when hospitals are dipping into their reserves to fund operations, this is not the time for the state to lean on hospitals to either fund Medicaid expansion, or to look at repealing or changing the current certificate of need law,” Charles said. 

Follow Sarah Nagem on Twitter: @sarah_nagem