Nebraska hospitals could get Medicaid payment boost under legislative bill

LINCOLN — Nebraska could get more than $500 million of federal money to help struggling hospitals under a bill introduced Tuesday in the Legislature.

Legislative Bill 1087, the Hospital Quality Assurance and Access Assessment Act, was introduced by State Sen. Mike Jacobson of North Platte and a bipartisan group of 19 co-sponsors. It was among 30 bills tossed into the hopper on the fifth day of the new legislative session.

The bill would make it possible for Nebraska to bring in more federal Medicaid money for hospitals, allowing the state to boost Medicaid payment rates for hospitals and help shore up those institutions. Medicaid is a state-federal program that covers health care services for low-income Nebraskans.

Jeremy Nordquist, president of the Nebraska Hospital Association, said the proposal would help the state’s 98 hospitals stem losses from below-cost Medicaid rates without requiring additional state support. He said the association estimates the new federal dollars could increase Medicaid rates to nearly the cost of services.

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State Sen. George Dungan of Lincoln, left, and State Sen. Mike Jacobson of North Platte gather on the first day of the Legislature last week. Jacobson on Tuesday introduced Legislative Bill 1087, the Hospital Quality Assurance and Access Assessment Act.

ANNA REED, THE WORLD-HERALD

Along with medical inflation and low Medicare rates, those losses have forced hospitals, especially those in rural communities, to cut services. In the last year alone, hospitals have closed maternal care, behavioral health, home health, hospice, hospital-owned nursing homes and other services.

“Improved hospital Medicaid reimbursement would be a game-changer for Nebraska and Nebraska hospitals, especially those serving rural communities with a high percentage of Medicaid patients,” said Brett Richmond, president and CEO of Methodist Fremont Health.

Nordquist said that 44 other states have adopted the mechanism called for by LB 1087. He said Iowa recently implemented its program and was able to bring in more than $800 million of federal money for hospitals.

Under the bill, hospitals would pay an assessment of up to 6% of net patient revenue. Money collected from the assessment would be added to existing state dollars and used as the match for federal Medicaid dollars. The federal government currently covers 68.6% of the cost of Medicaid services in Nebraska, meaning that each $1 in assessments would bring in more than $1 in federal funds, Nordquist said.

He said that similar assessments are used by developmental disability providers and, to a limited extent, by nursing homes in Nebraska. But hospitals have not sought to follow suit previously. The Medicaid payment increases would apply to inpatient and outpatient hospital care but not to physician charges or clinics.

Here are the highlights of the other bills introduced Tuesday:

HHS split: The Nebraska Department of Health and Human Services would be split into three separate state agencies under LB 1086, introduced by Sen. Lynne Walz of Fremont.

The bill would create the Department of Children and Family Services out of the current HHS children and family services division. The HHS public health division would become the Department of Public Health, and the HHS behavioral health, developmental disabilities and Medicaid and long-term care divisions would be combined into the Department of Healthcare.

HHS is the largest state agency. It was created in 1997 when five then-existing state agencies and programs were merged into one system. The system underwent another major reorganization in 2007 to become a single state agency.

Minors not allowed: LB 1092, introduced by Sen. Dave Murman of Glenvil, would make commercial entities liable if they intentionally published or distributed material on the internet that is harmful to minors without requiring age verification of users or retaining identifying information on users.

The bill would define harmful material as “patently offensive” depictions or descriptions of female genitalia and private parts, sexual touching or sexual acts. The descriptions or depictions could be actual, simulated or animated. The bill would allow minors or their parents or guardians to sue commercial entities for violating the new prohibitions.

Caring for children: LB 1083, introduced by Sen. Danielle Conrad of Lincoln, would boost the amount allocated for the Nebraska Career Scholarships for community college and private college students, along with making the scholarships available for students pursuing early childhood education, education or engineering.

Reimbursement rates for providers serving children in the child welfare and juvenile justice systems would be increased 5% for the current fiscal year under LB 1078, introduced by Sen. Mike McDonnell of Omaha.

Adult entertainment: Sen. Barry DeKay of Niobrara withdrew a bill he introduced last week. LB 968 would have imposed a fee on adult entertainment businesses equal to $5 for every customer the business serves each day. DeKay said he needs more time to work out problems with the proposal and does not expect to reintroduce the measure this year.

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Sam Di Mauro, owner of Andy’s Shoe Repair at 4954 Grover Street, in Omaha on Wednesday, Dec. 27, 2023.

ANNA REED, THE WORLD-HERALD

A rider gets off a bus on Harney Street in downtown Omaha on Tuesday, Jan. 9, 2024.