Sierra Vista Hospital increased revenue by 24 percent due to Governor’s work on Medicaid–and no one tells us?

Our mostly Republican local elected officials sitting on the Joint Powers Commission and their appointees sitting on the Governing Board that own and run the publicly-owned Sierra Vista Hospital have been utterly silent about the $10.5 million influx of Medicaid supplemental payments over fiscal year 2025. 

I only know about it because I perused the Sierra Vista Hospital’s FY2025 audit, available on the State Auditor’s website. 

The reporting and communication from both the JPC and Governing Board has always been limited to PR slogans, such as, “the hospital is doing great,” or Sierra County Commissioner Jim Paxon’s cryptic statement about six months ago claiming that some people think the hospital is in trouble, but it has $13 million in cash. 

At the time, I checked the FY2024 audit, and it showed $13 million in “current assets,” which is by no means cash. The audit showed $5.7 million in “investments,” which was about $2.5 million lower than FY2023, used to pay the $3 million over-budget expenditures. Lumped into Paxon’s $13 million “cash” was the wishful $4.6 million in hoped-for patient accounts receivable. The hospital wrote off about $7 million in bad debt in FY2025, supposedly from uncollectible patient accounts receivable from the year before. 

Paxon’s exaggeration of the hospital’s financial health was not entirely untrue, however. The hospital was doing better than some prior years, largely because it invested the cash it received from Biden’s Covid-related American Rescue Plan. The audit also showed that the hospital was finally in compliance with its New Mexico Finance Authority loan, taken out in 2016 to build the new hospital wing. 

The loan was rejiggered, thankfully, by Sen. John Aurthur Smith, a few years later, when it was clear that the JPC and Governing Board had bought too much hospital for the people’s pocketbook. Smith threw in $5 million in capital outlay, bringing the loan down from around $36 million to $31 million in 2018 or so. Still, the NMFA loan, ending in 2046, resulted in about $22 million for the new wing and the people will have paid nearly $9 million in interest over 20 years, which is 40 percent of the debt. The NMFA loan always required that 130 percent of the yearly payment be in a debt reserve account as surety it would get paid, which comes to about a $1.7 million set-aside. Most of those years the reserve was short: https://sierracountycitizen.org/sierra-vista-hospital-out-of-compliance-with-loan-again/ 

When I looked at the FY2025 audit, I was surprised to see that the $5.7 million investment had jumped $6.1 million to $11.8 million. Where did this money come from? Medicaid supplement payments jumped from $1.32 million in FY2024 to $11.84 million in FY2025. 

The audit, at the back, in the fine print, alluded to Senate Bill 17, which I discovered was chaptered as the “Healthcare Delivery and Access Act,” which took effect July 1, 2024, spearheaded by Governor Michelle Lujan Grisham. She had also pushed through legislation that pulled together different government agencies and pooled them into the newly formed New Mexico Health Care Authority, which also took effect July 1, 2024. 

With this new agency’s oversight and expertise and teamwork, SB 17 devised a new Medicaid “tax” to hospitals and corresponding supplemental payment from that new fund. At that time the federal government would pay in $3 for every $1 the state put in. Thus by upping the hospitals’ contributions, the federal contribution increased and leveraged by three fold. 

Our hospital board members said nothing, although the $10.5 million increase in Medicaid in FY2025 comprised 24 percent of all hospital revenue. In FY2025 revenue was $43.7 million. In FY2024 it was $34.5 million. 

Is this why T or C Mayor and JPC member Rolf Hechler mentioned several months ago that the hospital was thinking about building an indoor pool/health center, which has also been a city ambition for many years? 

Where would they get the money, wondered at the time. 

Why have the board members not been shouting this good news about Medicaid supplemental revenue pouring into Sierra Vista Hospital coffers? I called the hospital’s Chief Financial Officer Ming Huang to see if he had informed the board members of the big change in Medicaid payments. Yes, he said, they had all been informed. 

I can only assume that it’s part and parcel with the Republican party line to deny the benefits of and the need for state and federal health insurance programs such as Medicaid. New Mexico has more people on Medicaid per capita than any other state. 

Republicans locally have reviled Michelle Lujan Grisham, a Democrat, but she and John Arthur Smith, who lost the vote to Republican Crystal Diamond Brantley, have shown more care for the health of our poor rural residents than any Republican. 

Of course Republican Trump’s Big Beautiful Bill, signed into law July 1, 2025, will cut the federal match rate and about 35 percent of the hospitals’ Medicaid supplemental payments, according to the state Health Care Authority, which document can be found below. So if the increase was $10.5 million the first year to Sierra Vista Hospital, it may be $6.8 million this fiscal year–still very substantial, and all thanks to Democrats. Even though JPC and Governing Board members have been mum about Lujan Grisham’s rainmaking, they’ll gladly spend the money. 

The people should make sure their local elected representatives on the JPC as well as their appointed representatives on the Governing Board report to the people in city and county meetings what they intend to do with this windfall of Medicaid money and why.