Budget negotiations in Congress are threatening major Medicaid cuts as House republicans look to slash billions in federal spending over the next decade. A Guam Chamber of Commerce membership meeting examines how this will impact Guam’s only public hospital where more than half of its patients rely on the life-saving coverage.

As House republicans consider slashing billions in Medicaid during budget negotiations, will the island’s only public hospital that’s already faced with a reimbursement disparity be able to withstand it? "Our hospital, for instance, has about 63 percent of the population that goes to GMH under those programs," stated Frank Campillo. "It would be very challenging for the hospital to make up any possible cuts we have to the Medicaid program in Guam."

Campillo, Calvo's SelectCare health plan administrator, addressed the challenging state of healthcare to Guam Chamber of Commerce members at their latest meeting. He estimates almost two-thirds of Guam Memorial Hospital patients rely on Medicaid and Medicare. Medicaid covers low-income individuals and people with disabilities, while Medicare covers those 65 and older.

"When 63 percent of your customers are underpaying you, then no matter how good you are, you are going to be in a deficit year in and year out. No matter how great of a management you have – you could have Elon Musk there today and you won’t be able to make it," he said.

Compared to Guam Regional Medical City, GMH is at a “significant disadvantage” despite having more beds and providing the same services.

Camillo continued, "If you compare the Medicare adjustment that GMH has versus the Medicare adjustment that GRMC has, GMH gets paid significantly less by Medicare. And when you get paid less by Medicare, you also get paid less by Medicaid. That is because GMH has been on something called the TEFRA adjustment."

Under the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA), the federal government does not fully reimburse GMH for costs of providing Medicare and Medicaid services. "Every single administration has had the same challenges at GMH. We go back to what I said earlier. When you get underpaid, there is no way you can get out of that sinkhole. You will continue to sink. Especially if we go into the mode of reducing the expenditures and reducing the Medicaid program," he added.

So, where do we go from here?

"President Trump says drill, drill, drill. I say build, build, build," Campillo offered. He also said he supports getting a move on building a new hospital, although he says he’ll leave the ‘where’ to politicians.

But first, former Chamber chairman Ernie Galito says the cap on the Medicaid match needs to be eliminated. Campillo said, "I think the Chamber and other organizations should be lobbying to do those things in Washington DC because at the end of the day, it is our healthcare system locally that needs to be addressed."