PA Ridge Administration Releases $15 Million in Tobacco-Settlement Funds To Pennsylvania Hospitals for Uncompensated Care
HARRISBURG, Pa., Aug. 14 /PRNewswire/ -- Gov. Tom Ridge today released $15 million in tobacco-settlement funds to reimburse hospitals for uncompensated care. This marks the first major release of funds from Gov. Ridge's tobacco-settlement plan to make Pen
Uncompensated care is health care provided by hospitals not paid for by any public or private insurance programs or companies.
``Pennsylvania's hospitals have an obligation to the people and communities they serve,'' Gov. Ridge said. ``That obligation includes providing services when individuals are in need of health care -- regardless of their ability to pay. Pennsylvania hospitals take this obligation very seriously -- and the $15 million we release today shows that state government takes this obligation seriously, too.
``These payments, combined with other initiatives, such as the adult insurance for working, low-income residents and PACE prescription-plan enhancements, will help to ensure that Pennsylvanians have the necessary and possibly lifesaving medical care they need.
``This is the first step in Pennsylvania's tobacco-settlement initiatives to strengthen the state's health-care infrastructure -- and make Pennsylvanians healthier.''
Gov. Ridge announced that this payment is the first in a series of tobacco-settlement payments to be distributed annually to Pennsylvania hospitals providing uncompensated care. Gov. Ridge and the General Assembly approved a plan that includes 10 percent of the entire tobacco settlement to be provided annually to hospitals for uncompensated care. These payments will be in addition to the nearly $235 million the Commonwealth gives annually to Pennsylvania hospitals providing charity care.
Gov. Ridge also noted that increased uncompensated care payments help lighten the financial burden many hospitals face when providing care to those that have no insurance or an ability to pay.
Through this initial tobacco payment and those that will follow later this fiscal year, as well as other funding sources -- including Community Access Funds (CAF), grants, uncompensated care payments and disproportionate share payments -- Pennsylvania relieves a significant part of that burden and assists its hospitals in providing services to those who cannot pay.
On June 26, Gov. Ridge signed into law historic legislation to use the state's tobacco settlement to make Pennsylvanians healthier and cement the Commonwealth's status as a national leader in health research. Pennsylvania is one of only eight states to use all Master Settlement Agreement tobacco funds for health-related programs.
Gov. Ridge said investments in biotechnology and medical research in the new law include:
A one-time payment of $100 million for three Life-Sciences ``Greenhouses,'' modeled on the Governor's successful Digital Greenhouse in Pittsburgh. The Greenhouses will be a network of statewide innovation centers based in Philadelphia, Pittsburgh and Central Pennsylvania;
A one-time $60 million investment in health venture capital, with an emphasis on the biotechnology industry. The investment is expected to attract an additional $180 million to $200 million of co-investments in Pennsylvania- based biotech businesses; and
$77 million in broad-based health research.
Other details of the plan follow.
Thirty percent ($103 million in 2001-02) of the proceeds fund a new health-insurance program for low-income adults that will provide basic coverage while they are in jobs where they cannot access coverage, or between jobs. This program is for uninsured Pennsylvanians who are ineligible for Medicaid and have incomes of less than 200 percent of poverty ($17,180 for a single adult). The Ridge Administration expects to provide health-care coverage to nearly 60,000 low-income uninsured Pennsylvanians.
In addition, this initiative will provide Medicaid benefits for almost 10,000 working Pennsylvanians with disabilities, whose incomes are at 250 percent of poverty.
Nineteen percent of the money -- more than $65 million in the first year - - goes to innovative university and medical institute research designed to promote more rapid gains through collaboration with university-based research. This also will help Pennsylvania's world-class medical research centers to develop new medical treatments.
Thirteen percent (nearly $45 million in 2001-02) provides home- and community-based care for older Pennsylvanians. This investment will allow Pennsylvania to almost double the number of older Pennsylvanians who are able to get the services and supports they need to remain in their homes and communities, rather than in institutions.
Twelve percent, or more than $41 million this fiscal year, to prevention and cessation activities designed to decrease smoking by teens and adults. This is a dramatic increase from the $2.2 million now spent in Pennsylvania, and places the Commonwealth among the top four states nationally in funding for tobacco prevention and cessation. Seventy percent of funds ($29 million) will be driven at the local level to address local tobacco-control needs. The remaining 30 percent ($12 million) of the funds will be directed by the Department of Health to statewide projects.
Ten percent (nearly $35 million in 2001-02) to reimburse hospitals for the costs of providing care to uninsured individuals. Virtually every Pennsylvania hospital will receive either an uncompensated-care payment or reimbursement for extraordinary expenses incurred while providing care for the uninsured.
Eight percent (roughly $28 million) to expand income eligibility by $1,000 for the Governor's PACENET program, which assists seniors (65 or older making up to $17,000 for individuals and $20,200 per couple) with the purchase of prescription drugs. Gov. Ridge sought and won PACENET in 1996 to provide catastrophic prescription-drug coverage to older Pennsylvanians.
In addition to increasing income eligibility in PACENET, the monies will be used to continue the enrollment of approximately 25,000 PACE members whose Social Security cost-of-living adjustment would have made them ineligible for continuation of benefits in 2001-02.
Eight percent (nearly $28 million) of the money will be transferred to an endowment, along with an up-front one-time deposit of $168 million, to ensure that the benefits of the tobacco settlement are secure, even if the Commonwealth's receipts from the tobacco companies decrease further in the future.
The new law also includes one-time payments of:
$8 million for low-cost loans for Pennsylvania medical students and loan forgiveness for Pennsylvania registered nurses;
$20 million for rural hospitals, for the purchase of equipment and technology, which enhances patient care and quality; and
$25 million to community health centers, designed to improve access to and coordination of care to low-income Pennsylvanians.