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The Capitol Report
2023 Arkansas Session Outlook
Hospitals are experiencing the most crushing economic stress of our lifetimes. Costs of supplies and medications are at an all-time high, as are the costs of personnel – the lifeblood of our hospitals’ ability to care for patients.
Reimbursement from both government payers (Medicare and Medicaid) and commercial insurance has not increased to cover those costs. Therefore, it is no surprise that the top priorities for the legislative session will be to continue Medicaid Expansion (now known as AR HOME), to seek opportunities to increase reimbursement, and lower those administrative costs that do not positively and efficiently impact patient care – and to protect, retain, and grow our health care workforce.
Not only will the members of the 94th general assembly have many new members – 26 members who will serve their first term in the House of Representatives and 12 members who will serve their first term in the Senate – but Arkansas will also have its first female Governor taking over the reins of the Executive Branch.
As exciting as it is to have new faces in the marble halls of the Capitol, Arkansas hospitals must accept the Herculean responsibility of educating our elected officials on what health care facilities are facing: the current financial conditions they are enduring and how these dire financial conditions negatively impact patient care.
Jodiane Tritt, Executive Vice President of the Arkansas Hospital Association, at the Arkansas Capitol.
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MEDICAID EXPANSION PROTECTION
The Medicaid program is optional through Title XIX of the Social Security Act of 1965, and Arkansas exercised its option to participate in 1970. Our state’s eligibility criteria for the program have been among the most restrictive in the nation. Prior to Arkansas’s Private Option – the launch of the Medicaid Expansion program in Arkansas – almost all Medicaid patients were children from low-income families, people with complex disabilities, and frail, elderly people with extremely limited financial resources.
Because funding for the program is shared between the state and federal governments, implementation of state Medicaid policies must be acceptable to the federal government. Prior to 2013, care provided to Arkansans who were underinsured, uninsured, or otherwise had no means to pay for medical care was increasing dramatically – especially because the Affordable Care Act required reductions in the Medicare program for hospitals. The Arkansas Private Option allowed hospitals to recover a portion of the cost of providing care to those Arkansans living under 138% of the federal poverty level and who received hospital care. Uncompensated care dropped by almost half in the first years of the program.
As the program evolved from the Private Option to Arkansas Works and now, to Arkansas Health and Opportunity for Me (ARHOME), it remains critical that care for these Arkansans remains accessible. More than 300,000 Arkansans have access to covered services that won’t exist if expansion goes away.
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REIMBURSEMENT RATES
Medicaid rates for inpatient general acute care hospitals were last changed in 2007 when they were increased to a cap of $850 per day from $675 per day. Medicaid outpatient rates were last changed in 1992, and that change was a decrease in reimbursement. It is imperative that Arkansas hospitals receive more favorable reimbursement from Medicaid in order to remain viable to care for Arkansas patients.
Each state Medicaid program is different and is funded in unique ways. One of the safety net accounts for the Medicaid program is the Medicaid Trust Fund. The portion of the Medicaid Trust Fund that allows for offcycle payments or unexpected costs on behalf of Medicaid beneficiaries is funded by a Soft Drink Tax that was originally enacted in a Special Session of the legislature in 1992.
The soft drink industry tried to remove the tax through a referendum, or direct vote, by the people of Arkansas in 1994, and Arkansans voted to keep the tax. The federal government allows proceeds from that tax to be matched and used for the benefit of Medicaid recipients and providers who serve them. For that reason, Medicaid providers fight the repeal of that tax unless another special revenue source, providing the same benefits, can be identified.
Using the state legislative process to increase reimbursement rates from commercial insurance payers is more complicated. Rates are – in
YOUR VOICE IS NEEDED!
Join us for Advocacy Days on January 25, February 21, and March 15 at the Capitol in Little Rock. You will meet with our state legislators, each of whom has a major impact on health care in Arkansas. Key advocacy priorities include: • Sustaining the gains made in health coverage. • Protecting patient access to care. • Addressing health care worker shortages. • Protecting health care workers from violence. • Providing relief to hospitals facing financial crisis.
Sign up here (using the QR Code above) for AHA Advocacy Updates and Alerts! Contact Jodiane Tritt at jtritt@arkhospitals.org with questions.
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Medical professionals really are the foundation of health care. We can be your strength, too, for new construction and other projects. Count on Crews for industry experience, capital structures and the client-first approach your organization deserves. theory – privately negotiated contracts. What becomes critical to hospitals, from a state legal perspective, is limiting administrative burdens imposed by commercial payers that create barriers to patient care. Hospitals are not alone in this advocacy. Many health care providers share the same frustrations with commercial payer policies that effectively ration care or create underpayments to providers who are providing care in good faith.
HEALTH CARE WORKFORCE
The health care professionals who work in Arkansas’s hospitals are every hospital’s most important resource. As COVID surged through the world, it took a dramatic toll on all hospital personnel. Health care heroes are leaving their professions at a rapid pace. The number of students interested in health care careers is declining, and the faculty available to teach and train new health care staff is becoming scarcer.
Added to that, reports of violence inside hospitals are on the rise. Hospitals must have resources to adequately compensate health care professionals and to keep them safe while they are working inside our buildings, improving the health of our patients.
Arkansas hospitals are the backbone of the health care system. They complement and amplify the effectiveness of many other parts of the health system, providing continuous availability of services for acute and complex conditions. Hospitals are also major economic engines in communities. In all advocacy efforts, these facts must be articulated, and it is AHA’s honor to carry these messages on behalf of the entire hospital industry.
Jodiane Tritt, JD serves as Executive Vice President of the Arkansas Hospital Association.
