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Changes would up reimbursements to rural hospitals


The Daily Reflector

Thursday, March 14, 2019

The state treasurer’s office announced Wednesday that it is revising changes to the state health plan to increase reimbursement levels to rural hospitals, which have raised concerns that proposed cuts would impede their ability to care for patients.

Changing the reimbursement rates will result in a $52 million annual increase from the original plan for many rural facilities that treat plan members, Treasurer Dale Folwell said in announcement released Wednesday afternoon. 

Changes for the tax-supported plan were announced in October and are scheduled to go into effect Jan. 1, 2020. The plan will begin basing its reimbursement on a pricing model tied to Medicare rates. Health care providers will be reimbursed for their services at Medicare rates plus an average of 82 percent.

Initially that average was 77 percent, and savings were estimated at $300 million for taxpayers and $65 million for plan members annually. Rural hospitals including Vidant Health in Greenville raised concerns the changes affected them disproportionately because they must care for a greater number of indigent patients.

The nonprofit Vidant estimated the plan would reduce revenues by $40 million.

The new adjustments will increase payments to rural providers by 20 percent from the original proposal, the treasurer’s office announced, while still saving taxpayers almost $258 million and plan members almost $57 million.

“Our original payment models provided substantial support for hospitals in rural communities,” Folwell said in the release. “After many meetings with health care providers across the state, the team at the State Health Plan was able to expand the number of rural facilities included in the initiative, allowing increased reimbursement rates that further support their profitability and independence.”

The state health plan relies on $3.4 billion in state funds annually and will need an additional $1.3 billion in taxpayer funds over the next five years to remain solvent, prompting the need for reforms, Folwell’s office reports.

A bill introduced in the state House earlier this month seeks to delay implementation of the plan. 

House Bill 184 would create a joint legislative study committee to examine the needs and concerns plan members and redesign the plan in a way that adopts “new practices and payment methodologies that promote health while incentivizing participation from both enrollees and providers.”