Meadville Medical Center (MMC) announced today that as a result of the passing of the 2024-2025 State Budget, MMC anticipates additional funding specifically for obstetric and neonatal services.
The Hospital Healthsystem Association of Pennsylvania (HAP) estimates that up to $39 million will be invested in rural hospitals, with a $7 million increase in Medicaid supplemental payments. The anticipated portion that MMC will receive is unknown at this time, but is expected to be a meaningful amount. HAP president and CEO, Nicole Stallings said, “Rural hospitals are bedrocks of their communities and anchors of the health care continuum, but they need help to ensure their sustainability. Investments in the state budget will bolster care that supports healthy moms and babies and preserves access to hospital care in rural communities. The funding gives MMC needed support today while work continues at the state and federal levels on long-term solutions.”
“Obstetrics units have been closing at an alarming rate across the country, especially in rural areas and underserved communities. There are various factors driving these closures, from a lack of adequate funding, to the rising cost of liability coverage, and the availability of obstetricians in rural settings. I am optimistic with continued financial support from state and federal sources, as well as, insurers, the result will be a more sustainable path forward for obstetrics services in PA,” stated Philip Pandolph, Chief Executive Officer at MMC.
In 2022, MMC acquired Meadville Obstetrics and Gynecology Associates (MOGA), a then private practice that serves MMC’s obstetrics unit. Due to ongoing financial challenges, the practice was looking to partner with another entity, and MMC decided that partnering with the MOGA physicians was necessary to preserve obstetric services in the area.
Upon acquisition, MOGA became a department of the hospital and fell under a “provider-based billing model,” whereby patients would be charged a technical or facility fee for certain services. The decision to make this transition is never taken lightly, because without the additional funding, MMC may not be able to sustain these services long term.
Provider-based payment models are necessary for health systems to financially sustain particular services. However, when commercial insurance plans do not cover the patient’s bill, or patients have high deductible plans, some of these costs can become the patient’s responsibility. Since MOGA’s acquisition by MMC, approximately 90% of technical fees, commonly referred to as “facility fees”, have been covered by insurance plans.
“The additional funding from the Commonwealth allows us to do what we always aim to do, which is limit and reduce cost to patients. MMC is pleased to be able to lessen the financial burden by eliminating the “Facility Fee” for patients in Meadville Obstetrics and Gynecology Associates”, added Pandolph.
For services received on or after August 5, MMC will no longer charge a facility fee for individuals with commercial insurance at MOGA. MMC is required, however, to continue charging Medicaid and Medicare patients a facility fee. Medicare and Medicaid continue to cover these costs so patients should continue to see little to no out-of-pocket expenses.
