Legislation approved by a Senate Committee will devastate rural hospitals. The bill, H.B. 1004, passed the Senate Health and Provider Services Committee and contains language to drastically cut reimbursement to hospitals for services and procedures that are provided in hospital outpatient departments and at off-site locations. If the legislation passes, Indiana University Health Frankfort Hospital, will be forced to reevaluate its current service offerings.
“I am shocked and dismayed that the General Assembly’s is seriously considering passing this legislation, especially considering the impact on rural health care. People in rural communities count on hospitals to be there when they need us – This legislation puts that at risk,” stated Kelly Braverman, president of IU Health Frankfort.
The bill includes provisions that will allow the legislature to override private contracts between hospitals and insurance companies. At issue is a provision to require hospitals to provide the location of the service address, referred to as site of service, on the form it submits to insurers for physician or hospital reimbursement. Hospitals had agreed to the transparency measure if it was consistent with Medicare’s approach. However, insurance companies, including Anthem, the state’s largest, are pushing for language that would override private contracts between hospitals and insurers, resulting in lower payments.
“Instead of paying hospitals for services that they are providing, insurance companies will see a windfall,” said Braverman. “We simply will not be able to afford to maintain current service levels if these drastic payment reductions are passed. Painful decisions will need to be made,” added Braverman.
As proposed, the legislation will take effect on July 1, 2020. Braverman said IU Health Frankfort will begin immediately evaluating its service offerings, taking into consideration community need and other factors. “We are continuing to reach out to our local legislators to make sure they understand the impact.”