Health and Human Services

Hospital assessment program considered

A bill intended to increase Medicaid payments to Nebraska hospitals without the use of additional general fund dollars was considered by the Health and Human Services Committee Feb. 2.

Sen. Mike Jacobson
Sen. Mike Jacobson

LB1087, introduced by North Platte Sen. Mike Jacobson, would require the state Department of Health and Human Services to submit a state plan amendment to the Centers for Medicare and Medicaid Services for approval to impose an assessment on Nebraska hospitals.

Under the bill, every Nebraska hospital would pay an assessment fee based on their quarterly net patient revenue. The total statewide assessment amount would equal the state share of payments authorized by CMS plus an administration fee, which could not exceed 2% of the assessment amount.

The complete assessment total could not exceed 6% of the total net patient revenue of all assessed hospitals. The bill also would require DHHS to partner with a statewide hospital association to establish Medicaid quality improvement metrics and track progress on those metrics.

Jacobson said Nebraska would join 43 other states and the District of Columbia in using the program, which he estimated would draw nearly $1 billion in federal funds to the state’s hospitals.

“This is net dollars coming to the state of Nebraska,” he said. “If passed, this bill would increase and improve access to quality care across the state and give us measurable results for all Nebraskans.”

Jeremy Nordquist, president of the Nebraska Hospital Association, spoke in support of LB1087. He said the average cost to provide care at Nebraska hospitals has risen 33% since 2022, while Medicaid reimbursement rates have risen only 2.25%.

Nordquist said the majority of Nebraska hospitals are losing money, with 59% of rural critical access hospitals operating in the red.

Also testifying in support of the proposal was Sara Howard, speaking on behalf of First Five Nebraska. Howard said the provisions in LB1087 that require tracking progress on quality improvement metrics would have a positive impact on maternal and infant health across the state.

“Fifty-one percent of counties in the state of Nebraska are considered a maternal care desert, which means no hospital, no [OBGYN] provider … no birthing center,” she said. “LB1087 can move the needle on our maternal care deserts, and specifically [on] quality measures around maternal care.”

Jeremy Brunssen testified in a neutral capacity on behalf of DHHS. While supportive of the concept and the need to support the state’s hospitals, Brunssen said the department has some technical concerns with the bill’s language and is working with Jacobson to resolve them.

No one testified in opposition to LB1087 and the committee took no immediate action on it.

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