WinnMed Board Discusses Medicaid Direct Payment Program Impact

Act now—your donation to local news ensures a brighter, more informed tomorrow. DECORAH — The WinnMed Board of Trustees convened on Wednesday, February 5 to review the impact and operational details of the Medicaid Direct Payment Program, a crucial financial support mechanism for hospitals in Iowa. Led by Chris Mitchell, President and CEO of the Iowa Hospital Association (IHA) and Steve Perlin, Managing Principal of Health Management Associates (HMA) via Zoom, the presentation and discussion provided board members with insights into the program's funding structure, quality metrics, and future sustainability. Perlin emphasized the significance of the program in bolstering hospital finances, "These directed payments have been an essential source of revenue, helping hospitals stabilize finances while ensuring access to care," Perlin said. The program, which is designed to improve patient access and quality across Medicaid-managed care, utilizes federal matching funds to support hospitals. Mitchell explained that the program's funding mechanism involves provider assessments matched by federal dollars. "Each hospital pays a fee to create the dollars to send to the feds to match the Medicaid funding," Mitchell noted. "These payments are issued quarterly and fluctuate based on a hospital's share of Medicaid utilization." The quality measures tied to the program include follow-up after hospitalization for mental illness, reducing all-cause hospital readmissions, and decreasing primary cesarean delivery rates. "The purpose of the payments is to improve patient access and quality across the Medicaid-managed care program," Mitchell explained. "The current program isn't at risk as it relates to the quality measures, but U.S. Centers for Medicare & Medicaid Services (CMS) is monitoring and wants to see progress on the measures." Concerns regarding the program's long-term stability were raised, particularly given potential federal policy shifts. Board Member Karen McLean referenced recent political developments, questioning whether Medicaid funding from the federal government might decrease under the new Trump administration. Mitchell acknowledged the uncertainty but stressed ongoing advocacy efforts. "We are all certainly working with our partners with the IHA and our partners from other state hospital associations across the country to talk about the benefits of the program," he said. "At the end of the day, this program helps hospitals, and it helps the patients we serve." Board members inquired about the potential for increasing the payment rate, which is currently set at 90% of the average commercial rate. "In theory, there is room to grow the program," Mitchell said, noting that factors such as federal approval and state-level policy decisions could influence any expansion. "Given the current climate now, I don't think we see in our plans to get too aggressive in increasing those amounts here in the short term." Mitchell reassured board members that the IHA and hospital stakeholders would continue monitoring the program's effectiveness and working toward maintaining its viability. "There are a lot of moving pieces with the program, both with the current fiscal year looking towards next year and then also reconciling the previous year," he said. "We certainly will be busy working on the directed payment program for the foreseeable future." The board expressed appreciation to Mitchell and Perlin for the detailed overview and acknowledged the program's financial benefits for WinnMed and other Iowa hospitals. Don't miss out on important updates! Subscribe to the newsletter for free and stay informed about local topics that matter most to you.