While all the details of the budget deal state leaders struck Thursday have yet to emerge, the proposal maintains key medical reimbursement funding for patients with low incomes.

That’s good news for Mayo Clinic Health Systems in Albert Lea and health providers across Minnesota, said Administrator Steve Waldoff.

The hospital doesn’t turn away low-income patients, so without the state reimbursement funding, the costs are recovered elsewhere, often on the charges for other patients. Waldoff said the lack of state reimbursement is akin to a tax.

“We have to step down that unreimbursed portion into the costs the other people pay,” Waldoff said.

In fact, when Steve Underdahl, the administrator for the hospital side of the Mayo Clinic Health Systems in Albert Lea, made his comment Wednesday to Gov. Mark Dayton at a meeting of business leaders at the Albert Lea Business Development Center, Underdahl also compared a lack of reimbursement to a form of tax and said, “That’s one reason why Tylenol costs so much when you are in the hospital.”

Waldoff said solutions to budget shortfalls keep hitting the Department of Health and Human Services hard.

“We just can’t continue to do that,” he said.

Reimbursement rates are 17 percent less than the rates established in 2002, he said.

“How many other businesses can do that and continue to exist?” Waldoff asked.

The legislation preserves Minnesota’s participation in the early Medicaid enrollment, a program instituted in the federal health care law passed in March 2010. The program provides some reimbursement dollars to health care providers.

Waldoff said preserving the reimbursement programs helps the hospital minimize bad debt. He said he wants to see the details of the budget deal but added: “I am very thankful for the very firm position Gov. Dayton took on that position.”

The state also helps offset the costs of education and research by medical providers through its Medical Education and Research Costs fund, a program Waldoff said has had tremendous economic benefits for the state. Those funds were saved from the chopping block during the legislative session.

“We need those dollars. We already have a manpower shortage,” he said.

Dave Pilot, chief financial officer for Mayo Clinic Health System sites in southeastern Minnesota, said the reopening of state offices will help with cash flow. State and federal dollars both come through state agencies, and he said the payments for June had been moved into July, which then weren’t issued because of the shutdown.

“We have not received payments since May,” Pilot said.

The reopening of state offices will allow medical professionals to once again obtain licenses. Waldoff said Mayo Clinic Health System in Albert Lea recruits and hires people, but if they can’t acquire the licenses to practice medicine in Minnesota, they can’t serve patients.

Waldoff said in the coming years Minnesota needs to consider altering health care reimbursements to encourage prevention by patients and to encourage results on the part of doctors. He said medicine today waits until problems develop, instead of focusing on prevention efforts.