House of Representatives

Kiger Passes Rural Hospital Survival Act 2020


3/11/2020 2:34:00 PM

OKLAHOMA CITY – State Rep. Lundy Kiger (R-Poteau) today passed a bill intended to provide contracting and reimbursement fairness for small rural Oklahoma hospitals.

 

House Bill 2870 passed off the floor of the House by a vote of 94 to 0.

 

“Rural Oklahoma has only approximately 60 to 70 hospitals remaining, with two hospitals announcing they went into receivership last week,” Kiger said. “Many of our rural hospitals are closing their doors not due to a lack of patients but a lack of reimbursement for services from two different groups. This bill is designed to try and correct the amounts and percentages that rural hospitals are reimbursed for services from insurance companies. This bill would help Eastern Oklahoma Medical Center and all rural hospitals have the ability to become more financially healthy.”

 

Kiger said the proposed Sooner Care 2.0 by Gov. Stitt or State Question 802 could also help improve the percentage paid by Medicaid in the near future to rural hospitals, and that would be a tremendous help.

 

Medicaid reimbursement to rural hospitals will only pay approximately 30 cents or less on the dollar initially for all services provided. Insurance companies reimburse approximately only 40 cents on the dollars for the same services. Combined Medicare and Medicaid reimbursements are normally a break-even reimbursement for rural hospitals. Commercial Insurance reimbursements also sometimes can take up 45 days to months in getting paid, especially if there are disagreements on the bill and coverage in the policy. These are the funds rural hospitals depend on for making capital improvements.

 

Kiger said while rural hospitals receive low reimbursements from insurance companies, these same insurance companies are paying larger urban hospitals more than 200% of the costs billed for many of the same services.

 

“This is unfair to our small hospitals,” Kiger said. “House Bill 2870 aims to create fairness and equity in small rural hospitals getting reimbursed 100% for their costs and services.”

 

Kiger worked with Rep. David Perryman (D-Chickasha) on the language of this bill, along with the Oklahoma Hospital Association, rural hospital administrators and the major insurance carrier in the state, Blue Cross and Blue Shield of Oklahoma.

 

Kiger thanked Blue Cross leaders for the time they spent meeting with him and discussing the language of this bill and the cooperation of Blue Cross in continuing to work on language related not only to increases the reimbursement percentage, but also a commitment by Blue Cross to meet with the state’s rural hospitals to discuss contact issues and reimbursements in working to agree on final language of the bill.

 

Kiger said an agreement was reached with all parties in passing this bill, which now goes to the state Senate for consideration. Title is off the bill, which Kiger said will allow him to work together with the Senate to finalize language.  

 

Kiger told House members this bill will not fix rural health care for the state’s hospitals, but it is a productive start from the meeting and conversations with Blue Cross and the Oklahoma Hospital Association.

 

“I believe we will be able to reach agreements on some or most of the bill’s language,” he said, “but the goal is finding ways of working with insurance companies and finding ways to reimburse rural hospitals at a higher rate so they can remain open for business.”