Governor Tate Reeves disclosed on April 11 that the second component of his comprehensive Medicaid reimbursement reform plan had received federal approval, marking a significant milestone in Mississippi’s healthcare landscape. This reform initiative is anticipated to yield over $700 million in additional hospital funds statewide. Governor Reeves initially unveiled the plan in September.

“This is another positive development for Mississippi’s healthcare system,” Governor Tate Reeves remarked. “The infusion of an additional $160 million will greatly bolster hospitals throughout our state. I extend my gratitude to all the medical professionals and healthcare leaders whose collaboration has led us to this milestone.”

The reform, endorsed by the Centers for Medicare and Medicaid Services (CMS), aims to enhance Medicaid base payment rates for hospitals by reimbursing inpatient and outpatient hospital services within the fee-for-service system up to the Medicare upper payment limit. Projections suggest this adjustment will result in an annual increment of $160 million for hospitals, surpassing the original estimate by $23 million.

The first component of the reform, greenlit by CMS in December, involves reimbursing hospitals at rates approximating the average commercial rate for services rendered through the managed care delivery system. This approach has been regarded as the federal ceiling for Medicaid reimbursements in managed care.

Hospitals stand to benefit significantly from these initiatives, with projections indicating a collective annual increase of $708 million, net of contributions made by hospitals to support the initiatives.