NM's rural hospitals seek financial bailout

Lawmakers in New Mexico are working on a potential tax hike intended to shore up the finances of the state's distressed rural hospitals, the Albuquerque Journal reported.

The proposal includes a tax on business gross receipts on all counties except for Bernalillo, which is the only urban county in New Mexico. The New Mexico Hospital Association advocates for an eighth of one percent tax, which would raise $36 million a year. The New Mexico Association of Counties argues for a one-sixteenth percent tax, which would raise $18 million.

Along with the tax hike, the state's hospitals also hope for a $10 million injection of state funds and new federal funds contingent on the tax hike and the state's contribution. Altogether, the new funds could total as much as $192 million, which the state would use to treat indigent patients and offset the costs of providing uncompensated care.

The state's rural hospitals have been hit hard by a combination of reimbursement cuts from federal and commercial payers and a decline in population. "There are probably four or five hospitals that are very much on the brink" of going out of business, New Mexico Hospital Association President Jeff Dye told the Albuquerque Journal. One rural facility, Holy Cross Hospital in Taos, cut its intensive care beds by 40 percent and laid off staff.

New Mexico's rural hospitals are not alone in their financial woes. Most rural hospitals face similar challenges of treating an aging and often uninsured or underinsured population. In Colorado, two rural facilities have decided to merge, while another has decided to cancel its ambulance service. In Minnesota, a proposed change to payment levels to rural facilities by Blue Cross Blue Shield Minnesota drew a fierce response from providers, prompting the insurer to reconsider the policy change.

To learn more:
- read the Albuquerque Journal article