Memorial stands to receive millions in Medicaid payment drama that plagues Singing River

A federal rule change that resulted in the recoupment of millions in overpaid Medicaid funds has wreaked havoc on Mississippi hospital finances and looms large among the reasons Singing River Health System administrators are asking Jackson County to sell their hospital.

But another Mississippi Coast health system, Memorial Hospital at Gulfport, stands to benefit from the same rule change that is partly to blame for Singing River’s woes.

The state Medicaid office has determined $45.5 million was overpaid to 18 Mississippi hospitals in the 2018 round of annual payments through the Disproportionate Share Hospital (DSH) funding program.

The $45.5 million will be redistributed proportionally among 15 hospitals deemed to have been underpaid in the same year — and the lion’s share will go to Memorial.

Memorial, a nonprofit health system jointly owned by the city of Gulfport and Harrison County, will receive $31.4 million from the recouped funds.

The influx of money comes at a moment of financial precarity for Memorial, which lost $61 million in its last fiscal year. Memorial CEO Kent Nicaud has credited the heavy losses to insufficient federal Covid-19 relief funding.

The next highest recipient after Memorial is Oak Circle Center, a branch of Mississippi State Hospital serving children and adolescents in Whitfield, which will receive $5.6 million.

The rule change that triggered the recalculation of the DSH payments will also retroactively apply to the years since 2018 — audits are conducted three years after each round of funding. So it’s likely that Memorial will receive more funding due to underpayments in 2019, 2020, and 2021.

Nicaud told the Sun Herald in an email the hospital expects that “the audit for following years will reveal similar findings based on the previous distribution practices.”

Singing River has estimated its losses due to the rule change could amount to a total of $27.8 million over the next three years.

Nicaud did not say whether Memorial has calculated the total amount it stands to gain from the redistribution of DSH funds.

Memorial has not yet received the $31.4 million it is owed from 2018.

This story was originally published August 23, 2022 at 5:50 AM.