New Philadelphia law aims to bring in more federal dollars to children’s and cancer hospitals

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A new Philadelphia law could help bring in more federal funding for local children’s hospitals and cancer hospitals that treat a high volume of patients with low income.

Mayor Cherelle Parker signed into law the Philadelphia Hospital Assessment Bill on Thursday. Officials hope the move will better support facilities that treat a large population of people who have health insurance under Medicaid.

“Overall, hospitals will receive more federal Medicaid funding each year than they would without this assessment,” said city Department of Public Health Commissioner Dr. Frank Franklin. “These are federal dollars that would otherwise not flow into our city.”

Medicaid is a public assistance health insurance program for people with low incomes, and it’s funded with both state taxpayer money and matching federal dollars.

When Medicaid patients use hospital services, the program typically reimburses hospitals for that care at a lower rate compared to patients who have commercial or private health insurance.

That creates a funding gap for places like St. Christopher’s Hospital for Children, where officials say 85% of patients are insured through Medicaid.

“We start every year out with about a $130 million gap because of the way Medicaid is administered,” said Robert Brooks, hospital president and CEO.

The new city law expands an existing hospital assessment program already available to certain facilities that treat adult patients. Now, hospitals including St. Christopher’s, the Children’s Hospital of Philadelphia and Fox Chase Cancer Center will be considered for additional federal matching funds to help support their Medicaid populations.

“We’ve operated taking care of these patients for years without this additional funding, which has been very difficult,” Brooks said. “But the funding is well needed, well deserved and will definitely help this community.”

The law will not cost the city or its taxpayers any money, Parker said.

“The bill is a win, win, win,” Parker said during a bill signing ceremony at St. Christopher’s. “A win for the city’s hospitals, for our city’s health department and most importantly, for our most vulnerable residents.”

Hospital and city officials said they won’t know exactly how much more money facilities will gain through the program until the next round of state hospital assessment calculations.

But they said they’re hopeful it will generate a “significant” and “life-changing” amount for facilities that have faced financial struggles in recent years.