Medicaid Task Force Charles E. Hart, MD,MS CEO/President Regional Health

Accumulating Hospital Cuts Since 2010 and into the Future

Medicaid Cuts 10-Year Medicare Cuts$98,943,500 Additional Medicare Cuts Under Construction $245,017,700

Sanford / Avera * Regional Government52%69% Insurance45%25% Self Pay 3%6% Medicaid9.6%14% Payer Mix Comparison * Sanford & Avera include operations in Iowa, Minnesota, North Dakota and South Dakota

Medicaid Eligible EligiblePopulation Minnehaha23,000169,500 Pennington15,500101,000 Dewey/Todd/Shannon14,90025,000

SD Medicaid Compared to Neighboring States SFY 2010 / Enrollee 4% less than Iowa 14% less than Wyoming 22% less than Nebraska 28% less than Montana 47% less than North Dakota 55% less than Minnesota

Medicaid Cuts FY 2012  $7.0 Million FY 2013  $1.0 Million FY 2014  $750,000 Cumulative Impact (3 yr)  $8.75 Million 7

Existing Medicare Cuts (2013 – 2022) 8 Rapid City Regional Hospital Spearfish Regional Hospital Spearfish Regional Surgery Center Regional Health Total Existing Legislative Cuts Affordable Care Act $ 67,100,100 $ 5,183,400 $ 784,400 $ 73,067,900 Budget Control Act (Sequestration) ,579,600 1,511, ,900 21,327,100 Tax Relief / Job Creation Act (Medicare Bad Debts) ,600 18,100 1, ,700 American Taxpayer Relief Act (Coding Adjustments) ,756, ,500 19,300 7,286,100 93,593,600 7,223,600 1,040, ,857,800 Existing Regulatory Cuts Inpatient Hospital Coding Adjustments 3,643, ,500 38,900 3,999,900 Grand Total $ 97,237,100 $ 7,541,100 $ 1,079,500 $ 105,857,700

Regional Health Community Benefit 990 Tax Form FY2011 & FY2012 IRS Form 990 FY 2012FY 2011 Financial assistance (charity) at cost $15,592,000$7,969,000 Subsidized health services 4,302,000 6,185,000 Medicaid loss 11,872,0003,747,000 Health professions education 1,830,000 1,460,000 Research 314,000 1,201,000 Community health improvement services 300, ,000 Contributions for community benefit 948, ,000 Subtotal $35,158,000$21,265,000 Medicare loss 17,529,000 11,776,000 Grand Total $52,687,000$33,041,000 Percent of Total Expenses 9.7%6.3%

Medicaid Expansion/Pros What is the population/costs? Cost shift ($5-8 Million Net Revenue) Maintain Services Economic Stimulus (sequester) Donut hole % poverty Moral Obligation Protect Small Business Opt Out