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MinnEcon Blog
Molly Bloom

Clinics treating poor face payment pain

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(MPR Photo/Tim Post)

Like many organizations that get money from the state, hospitals and health care providers are planning for a state government shutdown. But they're also dealing with the ripple effects from last year's budget-balancing agreement.

One of the ways legislators balanced last year's budget was to delay some Medical Assistance payments during the last month of the fiscal year (June 2011) and then pay providers what they're owed at the beginning of the next fiscal year (July 2011).

Normally this delay wouldn't cause a big headache for providers. But if the state shuts down, they will not get their delayed payments or payments for the new fiscal year until the shutdown ends.

Karen Smigielski, a communications officer for the Minnesota Dept. of Human Services, says that 9,158 health care providers are affected by this payment delay and the total amount of the delayed reimbursement payments will be about $157 million. The current payment delay does not affect MinnesotaCare payments or payments for in-home services.

One of the largest providers being affected by this delay is Hennepin County Medical Center. Vice President for Public Policy and Strategy Mike Harris says their delayed June payments will total about $19 million. He says they can deal with a one-month delay without major problems since "their operating performance has been a little bit better than normal this year." However, if the delay continues after June 30, "it will be very challenging."

If the government shuts down July 1 and payments are delayed further, Harris predicts they will reduce service levels, seek relief from vendors and delay capital projects.

This story came from a tip from our Public Insight Network. How would a shutdown affect you? What else should we know? Help us cover this story by sharing your insights here.