HMO assessment program considered

The Banking, Commerce and Insurance Committee heard testimony Feb. 4 on a bill intended to increase Medicaid provider reimbursement rates without the use of general fund dollars.

Modeled on a proposal approved by lawmakers last year to levy an assessment on all Nebraska hospitals, LB527, introduced by North Platte Sen. Mike Jacobson, would use a similar mechanism to levy an assessment on the state’s health maintenance organizations.

Under the bill, the state Department of Health and Human Services would be required to submit a state plan amendment to the Centers for Medicare and Medicaid Services by Aug. 1, 2025.

If approved, the state plan amendment would authorize collection of a 6% tax on all non-Medicare premiums written in Nebraska under an HMO certificate of authority, to be collected by the state Department of Insurance.

Revenue generated by the tax would be remitted to a newly created Medicaid Access and Quality Fund. DHHS would use the fund to obtain federal matching dollars to enhance Medicaid reimbursement rates paid to nonhospital providers of physical health services, with an emphasis on evaluation and management, labor and delivery and rural health services.

The fund also would be used to pay a monthly per-member fee of at least $75 to qualified primary care providers who meet criteria to serve as a primary care medical home for target populations. Any remaining funds would be used within the state’s Medicaid and CHIP programs.

Jacobson said the bill, when fully implemented, would provide more than $100 million in new, matching federal funds, which would enable more providers to accept Medicaid patients.

More than 350,000 Nebraskans are covered by Medicaid, he said, and the state is struggling to provide access to the care those individuals need.

“This bill is incredibly important to the future of health care in our state, especially for rural areas and especially for pregnant women and Nebraska children,” Jacobson said.

Testifying in support was Robert Wergin, president-elect of the Nebraska Medical Association, who said LB527 would provide much-needed reimbursement rate increases for the state’s Medicaid providers.

Speaking on behalf of the NMA and the Nebraska Academy of Family Physicians, Wergin said the cost of operating physician clinics has risen 20% over the last five years in Nebraska but net patient revenue has not kept pace.

“These increasingly thin or negative operating margins disproportionately affect small, independent and rural physicians,” he said.

Libby Crockett, a Grand Island physician, agreed. Also speaking in support of the measure, she said the bill would help maintain access to obstetric and gynecological services in outstate Nebraska.

Crockett said 40% of maternal patients and 44% of pediatric patients at her clinic are on Medicaid. Reimbursement rates do not cover the cost of care for those individuals, she said, placing an “undue burden” on the practice and forcing it to limit new Medicaid patients.

“Our state cannot afford for these access challenges to grow worse,” Crockett said.

Also testifying in favor of LB527 was Jeremy Nordquist, president of the Nebraska Hospital Association. The bill would not expand the pool of Medicaid recipients, he said, but would allow the state to pursue available federal dollars to provide much-needed care to vulnerable Nebraskans.

No one testified in opposition and the committee took no immediate action on the proposal.