CHCC tells House committee budget shortfall risks services without full Medicaid match and Health Network funding

Commonwealth Healthcare Corporation leaders told the House Committee on Ways and Means on Aug. 11 that the hospital system faces a projected shortfall unless the commonwealth provides the full Medicaid local match and larger appropriation for the Health Network Program (HNP), the off‑island medical referral program.

The matter was presented by Eleanor Cabrera, chief strategy officer for the Commonwealth Healthcare Corporation (CHCC). “We remain the only hospital and public health provider in the CNMI, serving patients across Saipan, Tinian and Rota,” Cabrera said. She told the committee CHCC delivered “over a 124,000 patient encounters” in 2024 and that Medicaid and Medicare account for nearly 80% of CHCC patient revenue.

Why it matters: CHCC said the commonwealth’s local Medicaid match unlocks federal funding at about a 1:5 ratio; if the local match is not fully funded, CHCC risks leaving federal dollars on the table and absorbing more uncompensated and Medicaid shortfall costs. The corporation reported that when the federal Medicaid cap was reached in FY23 the commonwealth had to cover costs locally, and CHCC absorbed risk and costs as a result.

Key discussion points and figures presented to the committee: - CHCC’s fiscal 2026 budget request seeks funding to sustain services and support an electronic health record rollout, specialty care expansion and workforce investments. CHCC reported that personnel costs dominate spending (more than $70 million in salaries and benefits in FY24). - Health Network Program appropriations and spending: The legislature appropriated $1.2 million for HNP this fiscal year; CHCC said it had received $820,000 of that appropriation so far. CHCC reported expenditures for the HNP program in the current fiscal year of $3.4 million and cumulative advances of $3.8 million since it took responsibility for the referral program. CHCC said it has been using hospital revenues to cover the gap. - Grants and federal funding: CHCC reported $115,000,719 in federal grant awards (performance periods ranging from one to five years) and said grant instability remains a risk (CDC, HRSA, SAMHSA, Medicaid changes noted). - Uncompensated care: Year‑to‑date uncompensated care was reported at about $7 million for FY25.

Questions from legislators pressed CHCC on where HNP shortfalls had been covered; Aprilita Santos, CHCC chief financial officer, said the hospital used internal operating revenues to cover referral and subsistence costs when local appropriations lagged. Several legislators asked whether the corporation could continue to use hospital funds for HNP. CHCC officials said doing so risks operational stability and that the HNP rules and state plan amendment (SPA) changes will affect cost and reimbursement going forward.

On reimbursement changes, CHCC told the committee the Medicaid SPA that became effective Oct. 1, 2024, should expand coverage to subsistence lodging and ground transportation for off‑island referrals; CHCC said it is awaiting reimbursement processes to be established so the hospital can claim those costs.

Discussion vs. decision: Committee members asked for additional documentation (white paper on MRI impact, updated regs/memos on income guidelines for HNP, detailed HNP overspend by island). CHCC did not receive additional appropriations during the hearing; no formal legislative decision was made at the meeting.

The committee adopted the day’s agenda at the start of the hearing by voice vote.

Closing: CHCC leaders reiterated the link between local investment in Medicaid match and drawing federal dollars: “For every dollar in local match, we unlock nearly $5 in federal support,” Cabrera said. They urged the legislature to consider the full match and HNP funding to prevent service reductions and economic ripple effects.