On behalf of Andalusia Regional Hospital and our 300 employees, we want to alert our community about an announcement made by the Alabama Medicaid Program this week. Without warning or discussion, on Tues., Oct. 7, the Medicaid Program announced plans to make draconian cuts in hospital reimbursement rates state-wide. Unfortunately, even before these recent cuts, the Alabama Medicaid Program was minimally covering our costs to provide care at Andalusia Regional. The proposed changes to Andalusia Regional Hospital is a 47.7 percent reduction in our current payment rate for Medicaid recipients which will slash our reimbursement to well below the basic costs of providing care to our patients.

This crucial situation is even more alarming in today’s economic environment, in light of the fact that an ever growing percentage of the residents in our state are in need of Medicaid coverage as the safety net for receiving adequate health care services. The number of individuals eligible for Medicaid is steadily increasing with the economic downturn and growing unemployment. These drastic payment cuts from Alabama Medicaid will be devastating to the health or our community and the overall viability of our hospital. The changes could impair our ability to continue to provide the level of care and array of services our community needs and deserves.

This recent development was kept confidential by the Alabama Medicaid Program and hospitals were not consulted or advised until this week when we were notified via conference call of the reduction in Medicaid payments. Like many Alabama hospitals, Andalusia Regional is the sole hospital provider in our community. These drastic cuts will financially handicap our hospital and potentially close many other hospitals within our state of Alabama.

At this point, we are not clear of the most effective solution to our state budget issues, but we are certain that this drastic action on the part of our Medicaid Program is not the best solution for the citizens of our state. If this mandate by the State Medicaid Program is not changed, the access and availability of health care for all Alabamians will drastically change for the worse.

We will be working closely with our state legislators and community leaders during the next few weeks to encourage our State Medicaid Agency to repeal these recent payment cuts and consider other alternatives to work within the budget shortfalls at the state level. We want to thank you, our community, in advance for your continued support and collaboration as we work together to ensure hospital services are accessible and available in Andalusia and Covington County for all our citizens.

Mark Dooley

CEO, Andalusia Regional Hospital