NASHVILLE — In a state where nine rural hospitals have closed or dramatically curtailed services over the past four years, the head of the Tennessee Hospital Association fears more trouble lies ahead under proposed federal Medicaid cuts contained in plans to repeal the Affordable Care Act.

THA President Craig Becker said hospitals in the state, especially rural facilities, were already hit by Tennessee officials' refusal to expand Medicaid under Obamacare.

And now proposed spending cuts in both U.S. Senate and House GOP proposals threaten to hit basic Medicaid heavily in efforts to largely repeal and replace former President Barack Obama's signature 2010 health care law.

"I think definitely, you're going to see more rural hospital closures coming along, particularly as it relates to these Medicaid cuts coming down the pike," Becker said after Republican Senate leaders unveiled their plan last week.

Becker said the Better Care Reconciliation Act of 2017 fails to "adequately address the health care needs of Tennesseans and THA opposes the legislation."

The hospital association is talking with the offices of Tennessee's Republican U.S. Sens. Lamar Alexander and Bob Corker.

"We've told them we're absolutely in opposition to the Senate bill as it is now," Becker said. "It's clearly going to do damage to the hospitals here."

Becker said rural hospitals won't be the only ones to feel the pain.

The Senate and House bills both would cap federal funding for Medicaid, which covers more than 70 million low- income people nationwide. Some 1.5 million pregnant women, children, disabled and elderly people receive Medicaid through TennCare.

The plans would change from open-ended federal matching funds for Medicaid enrollees to a per-person rate. In 2025, the Senate plan's rate would be pegged to the Consumer Price Index, not medical inflation, which is higher.

Robert Greenstein, president of the Washington-based Center for Budget and Policy Priorities, told reporters last week that will "shift massive costs to states" involving billions of dollars the GOP intends to redirect toward tax cuts for wealthy Americans and corporations.

Becker said the proposals "represent real, long-term cuts to Medicaid and present a major threat for the future of health care and hospitals in our state."

He said planned changes to premium subsidies and dropping the individual coverage mandate would put at risk more than 200,000 Tennesseans who bought insurance on the Obamacare exchanges.

While taxes on some groups, including medical device manufacturers, to pay for Obamacare will disappear, Becker said, hospitals will see reduced Medicare reimbursements.

"These cuts are devastating for hospitals in Tennessee and contributed to closure of rural hospitals across the state as others still face uncertain futures," Becker said in an earlier statement.

Asked about Erlanger Health System in Chattanooga, Becker said in an interview that because the urban public hospital is considered an "essential access hospital," it will likely continue getting special federal funding to hospitals that treat indigent patients through the Disproportionate Share Hospital (DSH) program.

Efforts to reach Erlanger President and CEO Kevin Spiegel were unsuccessful Saturday.


As for rural hospitals, according to a database maintained by the University of North Carolina's Cecil G. Sheps Center for Health Services Research, 79 have either closed or pared back to bare-bones operations since Jan. 1, 2010.

Nine were in Tennessee. Most didn't close entirely but have shut down most in-patient services, sometimes keeping emergency room services or urgent care operations going.

One is Copper Basin Medical Center in Polk County, Tenn. Though the emergency room remains open, the 21-bed critical access facility in May halted inpatient care, laid off at least 15 nurses and activated a GoFundMe page with an urgent plea.

"Please help save our local area hospital!!! We have had to suspend inpatient operations; we hope for a few short months, in order to obtain working capital."

"We got a couple of others [hospitals] barely hanging on," Becker said.

The Sheps Center website notes multiple factors involved in the closure of the rural facilities, including demographics, damage from the 2008 Great Recession and "generally poorer financial performance in the South."

But the Sheps Center also points to potential impacts of Obamacare "and/or the correlation with a state's decision of whether to expand Medicaid."

Republican Gov. Bill Haslam in 2015 proposed expanding Medicaid to an estimated 270,000 Tennesseans but GOP lawmakers balked.


Some advocates are worried about the future of exchanges where an estimated 230,000 Tennesseans have bought health insurance, often with federal help.

Last week, Ginger Birnbaum of Hamilton County, whose 5-year-old son King has cystic fibrosis, joined with retired pediatrician Brent Morris to raise concerns about the Senate plan's impact on essential health benefits required under Obamacare.

"Our family is protected by the Affordable Care Act and we also purchase our insurance on the exchange," Birnbaum said. "The protections are especially important to us. For our family, this is much less of a political issue than a personal one. There are lives at stake."

While Alexander, chairman of the Senate Health, Education, Labor and Pensions Committee, has praised aspects of the Senate Republican bill, neither he nor Corker have outright endorsed the plan.

Alexander last week noted the Senate bill keeps protections for people with pre-existing conditions. The House GOP bill does away with those protections.

But Morris said the Senate plan allows states to request federal waivers from essential health benefits coverage including maternity, mental health, substance abuse and prescription drugs. He and other critics say waivers would let insurers offer cheaper, less comprehensive policies.

And those with pre- existing conditions may not be able to afford fuller plans that cover their families' needs, Morris said.

"So you redefine [it] by allowing states to waive essential health benefits, reducing care for everybody in the country," Morris said.

In February, Tennessee Commerce and Insurance Commissioner Julie Nix McPeak advocated for state flexibility on essential benefits in front of Alexander's HELP Committee.

"Should the state be provided a blank slate to define EHB, we may consider a base set of benefits that would need to be included in a few standard plans while also allowing more flexible designs in other available plans," she added.

Tennessee has had major problems with insurers dropping out of the federally operated exchange. Several weeks ago, Chattanooga-based BlueCross BlueShield of Tennessee agreed to provide coverage in Knoxville after an insurer there opted not to re-up its coverage plan. Most areas of the state have just one insurer on the exchange.

McPeak argued allowing states to redefine essential health benefits would provide increase options for consumers, but critics say that opens the door to insurers offering up basically unaffordable or unusable health plans.

Contact Andy Sher at or 615-255-0550. Follow him on Twitter @AndySher1.