Answer Man: What happens if CMS stops Mission Hospital's Medicare and Medicaid payments?

ASHEVILLE – The Centers for Medicare and Medicaid Services has threatened to terminate Mission Hospital’s Medicare and Medicaid reimbursements if the facility does not become substantially compliant with federal regulations by June 5.

These violations stem from a series of complaint investigations over the past several months by the North Carolina Department of Health and Human Services. Reports following these investigations revealed noncompliance with federal regulations regarding the hospital’s governing body, patient’s rights, quality assessment and performance improvement, nursing, laboratory services, emergency services and emergency screening.

NCDHHS will visit the hospital unannounced before June 5 to determine if Mission is compliant with federal regulations, according to CMS. If the hospital is not adhering to the regulations, the federal government will give Mission at least 15 days of notice if it plans to terminate the reimbursements. The hospital can appeal that decision.

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Question: What are the implications of Mission Hospital potentially losing its Medicare and Medicaid reimbursements?

Answer: Before digging into the answer, let’s be clear, it is rare for the federal government to terminate a facility’s Medicare and Medicaid payments.

Since 2023, the federal government has threatened to terminate or revoke reimbursements for 70 participating facilities across the country.

For any facility that has a contract with CMS, failing to meet one or more of the federal regulations for participation in Medicare and Medicaid initiates a 90-day termination process for providers that do not become compliant.

That does not to say that Mission Hospital’s entanglement with federal and state regulators is common. Surveyors found that Mission’s noncompliance with federal regulations created an “immediate jeopardy” situation, putting patients in danger of serious harm, injury or death. This designation is rare. A 2021 National Library of Medicine study of 30,808 hospital deficiencies between 2007 and 2017 found only 730 “immediate jeopardy” tags.

If the federal government ultimately terminates Mission’s Medicare and Medicaid payments, the consequences would be significant. Medicare and Medicaid beneficiaries produce most of the inpatient and outpatient charges for services provided by the hospital. According to the National Academy for State Health Policy’s hospital cost tool, which crunches numbers from reports Mission provides to the federal government, 68% of Mission Hospital’s charges were produced by Medicare, Medicare Advantage and Medicaid beneficiaries during the 2022 fiscal year, the most recent data available.

Due to Mission’s reliance on Medicare, Medicare Advantage and Medicaid patients, terminating Medicare and Medicaid funding to the hospital would be a death knell, Duke Law Professor Barak Richman told the Citizen Times over email. Health care policy is a focus of Richman’s research.

Mission Health spokesperson Nancy Lindell did not answer Citizen Times questions about how Mission Hospital would adapt if CMS stopped Medicare and Medicaid payments, or if the hospital would continue operating.

If the federal government terminates the hospital’s contract with Medicare and Medicaid, beneficiaries of those programs would not receive coverage for care provided by Mission, Richman explained.

“I suppose – theoretically – a hospital could continue chugging along by telling all patients to pay in some form outside Medicare, but it’s just not a financially viable option,” Richman said.

“Denying Medicare is akin to a nuclear option.”

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Mitchell Black covers Buncombe County and health care with the Citizen Times.

This article originally appeared on Asheville Citizen Times: If Mission loses its Medicare and Medicaid contract, what happens?