Leaders of several Mississippi nonprofit hospitals say a complex and unfair Medicaid reimbursement formula has left their facilities struggling to survive, while county hospitals reap multi-million dollar reimbursement windfalls.

The Upper Payment Limit and Disproportionate Share Hospital payment programs are designed to make up for gaps Medicaid doesn’t cover.

Hospitals are put in three categories: state, county and private. Each category gets a portion of extra Medicaid money, and under the formula, a number of county hospitals ended up splitting a huge amount of money.

Medicaid regularly reimburses hospitals for medical care for the poor.

Daryl Weaver, chief executive for King’s Daughters Hospital in Yazoo City, a private nonprofit hospital, said the formula is really hurting his facility. The hospital got only $442,104 when its uninsured care costs ran nearly $1.1 million last year.

Weaver said state Medicaid officials “should be ashamed and embarrassed at such poor and inequitable administration of public funds in such a way as to create these windfalls in a few hospitals while others struggle to survive week to week.”

Robert Robinson, executive director for the state Division of Medicaid, acknowledges many rural hospitals are hurting financially. However, he and other state officials say they are simply following state and federal law.

Until 2007, hospitals received extra Medicaid money based on a formula administered by the Mississippi Hospital Association, but federal officials ordered a change. State Medicaid officials now administer the formula.

“We ended up with a pile of money to give hospitals, but we were required to give it to certain hospitals, which resulted in certain windfalls,” Robinson said.

For example, Neshoba County General Hospital received a $19.5 million windfall last year that exceeded its $19 million in revenues. The county-owned Noxubee General Hospital, where the total cost for uninsured care at the 25-bed Macon hospital last year was $629,065, received a Medicaid windfall of $5.2 million.

Uninsured care at the county-owned Montfort Jones Memorial Hospital in Kosciusko was $705,584. Its Medicaid windfall was $9.9 million.

Weaver said Medicaid officials have almost doubled the federal matching dollars the state received when the program was managed by the state hospital association.

“They fail to recognize the negative impact of wastefully drawing down these funds which wildly benefit a few facilities leaving neighboring hospitals to compete with these sorts of unmerited windfalls,” Weaver said.

David Maatallah, chief financial officer for the state Division of Medicaid, said Mississippi is unfortunately stuck with a horribly antiquated system.

“Our state plan is complicated by the fact we have to go through the Legislature,” he said. “We’ve been prevented from changing this system for about three years.”