ALC-Hospital, Medicaid, & Developmental Disabilities Study Subcommittee
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Unknown speaker
0:00
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Representative Mary Bentley
Unverified
2:30
If everybody will find their seats, we're about to get this committee meeting started. Everybody will end our
conversations and find a seat. I appreciate it.
all right we're going to call this subcommittee meeting to order this morning um i'm just going to briefly remind
our the members of our committee that we were tasked this subcommittee was tasked with a complete overview of department of human services we started with children family services we did county operations we've looked at tanf and a number of things but one of our biggest expenses is what we pay for hospitals across the state so i've asked dhs to come and give us a presentation
this morning covering all of what we do in our hospitals and then we'll hear a presentation from the hospital association then we'll get everybody together to answer some questions from this committee i know a number of our committee members are not on public health so this will be new to all of you so i've asked them to kind of limit their acronym use and make it as simple as we can But if Janet Mann will come forth, Missy Eubanks will come forth from DHS, we'll get this morning started. Thank you, ladies, so much for being here. And I know, I'll just briefly say, as we were looking at our maternal health and across the board,
one of the biggest expenses we have in our state is what we spend in NICU. And if we can keep our children out of NICU, we'll save a lot of money, and you guys will see that today. But I just think it's really important for us to see what DHS is spending their money on. So, ladies, we'll let you get started. and colleagues, feel free to press your button. We can stop things as we go. Don't go too far along from your questions.
Speaker 12
4:28
We'll keep this conversation going. Thank you. Thank you, Chairman Bentley. Janet Mann, DHS Secretary.
Speaker 15
4:36
Misty Eubanks, Deputy Secretary, DHS. Thank you, ladies. Please
Speaker 19
4:43
proceed. I'm going to talk from the PowerPoint slides, so please stop me at any time, and I will try not to talk in acronyms so thank you
Representative Mary Bentley
Unverified
4:52
for having us today we are here um pull your
Speaker 19
4:55
microphone a little bit closer you usually have no problem hearing me but thank you thank you so much I appreciate you welcome um thank you again for having
Speaker 24
5:03
us today we're here um to talk about hospital payments in Arkansas Medicaid so we do operate several different payment models the most
the biggest one is our fee for service model where we pay hospitals on a per diem we also have an organized care model called the pass program we we also operate our home which is for the expansion population which is where we go out to the marketplace and we purchase insurance plans for our expansion population only so if like we said beneficiaries not enrolled in the pass program or our home receive most of their services through the fee for service that is what ffs stands for
in the powerpoint and in addition to the regular fee for service payments we do make hospital access payments and cost settlements so i'm going to talk a little bit more about those a little further in presentation. So for SFY25 we put together all the payments to the hospitals in their different categories. We have inpatient and outpatient claims which accounts for $688 million. Our UPL
payment or our upper payment limit payment is $473 million for state fiscal year 25 our cost settlements is 248 million dollars and then we have some a small category of other payments which includes gme which is graduate medical education and dish which is disproportionate share of hospital payments for the uninsured that is about 47 million dollars
so we're going to talk about a little bit cost settlements and some of the payments So hospitals are paid a per diem for their fee-for-service clients, often equating to far less than 100% of their hospital costs. It is less than Medicare also, just for the record. Our DHS, we pay for those in addition to cost settlements to eligible Medicaid hospitals. Cost settlements are lump sum payments to a hospital provider to shore up the difference
between what it costs to provide the services to Medicaid fee-for-service versus how much the hospital would have received from a different rate program. Per the Arkansas state plan and state statute, DHS is currently required to make cost settlement payments to in-state and out-of-state providers. The general fund is how these cost settlements are funded for the state share.
In SFY 2025, DHS paid $72 million in inpatient cost settlements and $176 million in outpatient cost settlements to get the total of $248 million, which was reported on a previous page. This is approximately 17% of the total hospital reimbursement for the fee-for-service population. And the state share required for those payments is about $68 million annually.
Representative Mary Bentley
Unverified
8:31
If we can stop just a minute, we do have
Speaker 31
8:38
one question from Representative Carolyn Brown. Thank you, Madam
Representative Matt Brown
Unverified
8:40
Chair. Thank you for being here, Ms. Mann. I might have missed it, but what is
Speaker 35
8:48
a cost settlement? Thank you for the question, Representative Brown. A cost settlement is
Speaker 24
8:53
the difference between what we paid in a fee for service or a per diem payment to the hospital and what it could have cost to deliver that care.
It is something that is calculated annually and paid to the hospitals. It's called a shore-up payment, quote-unquote. I don't really like that term, but that's how we
Representative Matt Brown
Unverified
9:16
refer to it. So we're sort of reimbursing them for
Speaker 37
9:21
costs that we didn't incur? No, ma'am, they are costs incurred
Speaker 24
9:25
by the hospital. Our per diem rates are low compared to Medicare and commercial payers, so we use several different mechanisms. One that we're going to talk about with private hospitals
is the upper payment limit or assessment fee process, and then another is cost settlement. So we have found over the course of time, we have found different ways to help the hospitals with their rising costs, but our per diems have not changed. Okay, thank you. I'll try to catch
Speaker 31
9:54
it when you get to it. Okay. Representative Beck. Thank you, Madam Chair.
Representative Rick Beck
Unverified
10:03
And if you're going to cover this later on, I can certainly wait,
but I'm looking at the per
diem rates, and they're substantially different between different hospitals. What's driving that difference? I believe history. So historically, critical access hospitals,
Speaker 24
10:21
which are 25 beds or less, have been paid a higher per diem and closer to their cost. And the middle-sized hospitals have just a flat per diem of about $850 a day for day 1 through 20, I believe.
After that, that per diem does drop. And then two of our larger hospitals, being UAMS and Children's, have a different per diem structure to help cover some of their costs. But that has been an established practice. And actually, for some of that more detailed history, I'm going to defer to Jodianne Tripp when she speaks from
Representative Rick Beck
Unverified
11:04
the Hospital Association. All right. And I'm just curious. I mean, it's substantially different.
Yes, sir. By a large amount. And so you're saying it's historical. It is. Is it based off historical? Are you saying it's based off historical data? Or is it just? It was
Speaker 24
11:21
established several years ago. I don't know the exact year. And what we have done is the cost settlements and the UPL upper payment limit payment program for private hospitals is how we have helped shore up the hospitals without raising the per diems. Thank you. You're welcome.
Representative Mary Bentley
Unverified
11:43
Thank you. So go over the UPL just one more time
Speaker 37
11:49
before we move forward. Yes, ma'am. So the UPL program or the upper payment limit program
Speaker 24
11:56
was established by federal statute to be used by states, I believe, in the early 90s. So the upper payment limit is considered the Medicare limit for each state. And so for the private hospitals in the state of Arkansas, we do an inpatient and an outpatient UPL calculation every year.
The difference between what was paid with Medicaid and then what could have been paid through Medicare. That delta or that difference is determined, and then we use assessment fees, which is what's on your screen. And the hospitals contribute through what we call access payments to help fund the state share of the upper payment limit payments. Those are usually made quarterly to the hospitals in the state. I'll pause there for questions.
Representative Mary Bentley
Unverified
12:46
so I'll ask the question does every hospital pay an assessment fee so trying or is every hospital paid an assessment fee from you guys or just private
Speaker 37
13:00
hospitals the the upper payment limit program or access payment program is limited to the private hospitals
Speaker 24
13:07
currently um there's been conversations if that should be expanded or not we don't have that's a whole nother conversation and Rabbit Trail, we should not go down today.
But right now it's the private hospitals in the state, in the inpatient category. In the outpatient category, almost all hospitals participate. Children's gets an outpatient cost settlement, so they do not participate in the outpatient UPL program. Okay, thank you. Representative Beatty. Thank you, Madam Chair. Just one thing when I was
Representative Howard M. Beaty, Jr.
Unverified
13:43
looking over the per diem claims and fees exhibit B1 that you provided that I think might be helpful and eye-opening for me, I would like to see.
Does that report also, can you provide us the number of Arkansans that were treated instead of just a dollar amount? How many of our folks are being served by these hospitals? Yes, sir. Thank you for the question. I believe so. I can take it
Speaker 24
14:11
back to our data team and how they pulled this to see if they can tie it back to the claims to show Unduplicated individuals that we're seeing right. I think that would be that would be helpful
Representative Howard M. Beaty, Jr.
Unverified
14:21
for me Yes, sir, and that will only be applicable to
Speaker 19
14:27
Inpatient and outpatient claims, right? Yes, sir
Speaker 24
14:30
I just wanted to be clear because the cost settlements and the UPL are not tied to an individual claim I understand that. Thank you. You're welcome Okay, I guess we can move forward. Thank you. So as we were talking earlier, hospital assessment fees are charged to the hospitals regardless of how many Medicaid clients they see. So the fees are used as the state share. Why it's important to note that the fees are charged to all hospitals regardless of how many Medicaid clients they see is there's a clause in the federal regulations called hold harmless.
We have to have a broad-based and uniform fee structure that is approved by the feds to be charged to the hospitals to then use that for the state's share. So the hospital assessment fees totaled $119 million in state fiscal year 25, like I have mentioned, not including Arkansas Children's UPL paid through other funds, and the public UPL paid through IGTs to UAMS and three other public hospitals.
And supplemental payments to hospitals after federal match totaled $548 million, and no general revenue was used. and that concludes and the overall approach I was open for questions or additional questions all right represent a bit thank you mountain chair so the
Representative Rick Beck
Unverified
16:12
fee that you're talking that is paid so it's in it's it's independent of the the size of the hospital or the number of patients it's just that it's a standard fee yes
Speaker 19
16:26
sir i don't know if i would use the word standard it's calculated every year the
Speaker 24
16:31
the how upl or upper payment limit works according to the federal regs is you take all the hospitals in in the category of private hospitals and you look at all of their charges
and then you compare that to what Medicare would have paid, that sets your upper payment limit. And then you have to back into what is the state share to fund or pull down those federal funds to be paid. That state share has to be applied across all the hospitals in a uniform and broad-based manner. The reason it's called Hold Harmless is because you cannot, ask a bigger hospital to pay a bigger share because they're going to get a bigger payment.
The hold harmless is you contribute and you get reimbursed, but you're not guaranteed to be made whole. Follow up?
Representative Rick Beck
Unverified
17:29
Certain. So it seems like, you know, a lot of our small rural hospitals are struggling and this seems like it would be not hold harmless to them right their overall budgets would be smaller and the the fee would be the same as as a larger institution a much larger
Speaker 24
17:52
institution it could be um i would have to go back and look at the model for the individual hospitals those lump sum payments come every quarter and some of the smaller hospitals do budget for those and that allows them to continue to do some things i don't know that i can speak for every individual hospital i think i'd be more than happy to discuss that um offline with with the upl demonstration model to show you how the contractors use it and then we do send it out
to the hospitals we work with the hospital association on the upl payment they get they look at it the hospitals look at it get a 30-day comment period we do send it to cms also cms signs off on it as we're making those payments throughout the year there's
Speaker 25
18:42
no easy way to answer it representative beck all
Representative Rick Beck
Unverified
18:46
right i'll be quiet for now for just a little bit well let me ask one more follow-up so not a follow-up just sort of a statement to see if i'm understanding this right
So this fee that you're talking about starts out, it's the difference between what Medicare would have paid and what Medicaid pays. And then it takes the state portion of that, right, that the state would have to make up for the Medicaid, and it says, okay, now that's the sum, and we're going to kind of divide that out and distribute it equally
over all the private hospitals within that category, you said, I think. Yes, sir. That's about 90% correct.
Speaker 19
19:27
Dang. No, so actually Medicare is usually, Medicaid is considered the lower payment. Medicare is considered the upper payment. So the
Speaker 24
19:35
differences there is the total payment that can be paid to the hospitals. And then the state share of that total payment is what the assessment fee is. So the hospitals fund their upper payment limit payments. So that it is a flow-through of state funds to pull down the federal funds, so it is no cost to the appropriated and funded budget of Medicaid at the state level.
Senator Fredrick J. Love
Unverified
20:08
Okay. Thank you. Representative Love. I mean, Senator Love, sorry. Thank you, Madam Chair. Remind me, you're talking about the payments. Remind me why we only apply that to the private hospitals versus all hospitals. Yes, sir. Thank
Speaker 24
20:33
you for the question. So in our state plan, we have an approved plan of the upper payment limit program for private hospitals.
We have cost settlements and other in the per diems to the public hospitals. A little bit earlier in the slide deck, UAMS and then four other public hospitals get a cost settlement. Okay. What percentage, remind
Senator Fredrick J. Love
Unverified
20:59
me, what percentage of our hospitals are private versus public? May I defer that to Jodi?
Jodi Ann said she's going to answer that. So, Madam Chair, I'll get back in the queue when Jodi Ann gets up.
Representative Mary Bentley
Unverified
21:17
Thank you, Senator Love. We'll have Jody Ann up shortly from the Hospital Association to
Representative Jessie McGruder
Unverified
21:26
add to the conversation. Thank you, ma'am. Representative McGruder. Thank you, Madam Chair. Being that I'm not on this committee
for allowing me to ask a question, I feel like Representative Beck is still trying to understand all this, which I am a freshman legislator. So I went through all this, and I see the pay differential.
So my request is very simple. I would like to be included in that offline meeting so I can get a better understanding of how this actually works. Yes, sir. More than happy to have a meeting. Thank you.
Representative Mary Bentley
Unverified
22:00
Representative McGruder, this is my 12th year on Public Health Committee meeting. It's still a matter of figuring it all out, so please don't take that bad at all, okay? Thank
Senator Jim Petty
Unverified
22:11
you. Senator Petty. Thank you, Madam Chair. So my question is more of a curiosity question.
You may not have the answer to this. Um, but I represent a, a large swath of rural, uh, communities. And so I'm just curious when you do have pushback on these assessment fees, uh, what's the nature of it other than the obvious, well, this seems too high. I mean, are they, are they, is there a, a rational, uh, uh, everybody's on the same page because of this or is it mostly the smaller below so many beds or just just kind of give me
an idea of where the pushback come
Speaker 19
22:53
from on those yes sir um i will try to answer your question historically in
Speaker 24
22:58
my tenure at med at medicaid as the medicaid director and now as the secretary the hospitals have not pushed back on the assessment fees we have worked with um ones that have come to our attention that need some assistance on structuring a payment plan to make sure their fees are paid but we have not had any in general pushback on paying it because we what
we do when we when we do pay it quarterly we're very conscious that we are holding other people's money so we try to send the assessment fee details out and then we try to pay it the following week if not that week definitely the week after we do not try it we do that try to have that practice with all of our assessment fees and provider payments to as we collect it then pay it out as quickly as
Senator Jim Petty
Unverified
23:55
possible okay thank you follow up madam chair certainly so i guess then then the
public comment period uh what are some of the nature of the comments that you receive
Speaker 37
24:09
and who they come from. Our main comment, we send it to the
Speaker 24
24:14
hospital association. They will ask technical questions. They have had conversations with the contractors in the past to ask some details. We have made some edits when we've had that in years past. We also always have a conversation of is there a way to enlarge it?
And so we have those conversations back and forth every year with the demonstration. I would defer to the Hospital Association on individual hospital comments. I want to ask a couple
Representative Mary Bentley
Unverified
24:44
of questions on the per diem right here. So just
to clarify, when we see on your Exhibit B1 there, a large majority of those folks are getting $850 a day. So is that per patient, per bed? Is that how that's contracted? So regardless. So I guess my question is, does it matter whether that patient's in ICU or whether just having a simple surgery?
Is it just a flat rate per patient
Speaker 24
25:08
per bed? Yes, ma'am. It is a flat rate per patient per day per 24 hours of the census. And we pay Medicaid pays for up to 20 days at that rate. And then it can be cut in half if they stay past 20 days. So looking
Representative Mary Bentley
Unverified
25:23
at Children's Hospital, since I have that reference and work there for a while. So a patient that came in and got a tonsillectomy, a simple patient, that patient per day is getting that $3,900 a day, the same as that NICU patient that's a 24-weeker down there getting intensive care.
Speaker 93
25:40
Yes, ma'am. Okay, just to clarify. Thank you. All right. Representative Garner, jumping the gun. Thank you, Madam Chair. I just have
Representative Denise Garner
Unverified
25:53
a quick question. do we know the actual cost that medicaid is reimbursing the hospitals are we getting anywhere what is the actual cost of a patient and do we have any idea what percentage medicaid is paying for that
Speaker 24
26:06
i don't know that i can answer that specifically i think i believe it's going to vary from hospital to hospital on cost and reimbursement i do know um that we are
lower than medicare and i'm trying to remember some statistics as i'm as i'm trying to calculate in my head while I answer you and I don't have a specific but there are some general statistics out there on how we pay that I can definitely pull for you and it will vary from hospital to hospital okay I just like an
Representative Denise Garner
Unverified
26:37
idea just an idea of what what the difference is what the actual cost is and what we're paying and how the hospitals are making up for that and we
Speaker 24
26:46
will have to break that up compared to the fee for service and our home population because different payment structures
and different covering of costs yes ma'am
Speaker 98
26:54
thank you appreciate it representative macruder
Representative Jessie McGruder
Unverified
27:04
thank you madam chair uh thank you miss
man for this uh presentation my question is does the age of the hospital factor into this equation as far as equipment uh if it's newer or older No, sir, not
Speaker 24
27:19
to my knowledge. This is a per diem that has been set. So the age of the hospital would not be factored in
Representative Mary Bentley
Unverified
27:26
Okay, thank you. Thank you madam chair You're welcome or if you guys would definitely more can
we bring Jodi Ann up and let her bring you for a presentation But I want you guys to stay there to
answer questions that may come up. So So that this is very appropriate when we get ready for fiscal session for you guys to understand just really their budget even a little bit more so thank you Jodi and if you recognize yourself we can proceed
Speaker 105
27:54
with your slideshow I'll do it we'll see how much this Luddite can get to where I need to be for the presentation right
Speaker 105
28:09
to be with you today so I'm Jodi Ann Tritt I'm the executive vice president of the Arkansas Hospital Association, and I want to personally thank the chairs for having this conversation and for letting us be here. So anytime we can talk about hospitals and the hospital industry, especially when you all are going into the fiscal session
and we've got the Medicaid agency to talk to us together in front of you, I think it's a really good thing. So I'm also happy to answer any questions that you all may have offline, online, however you want it so the first things first of course is to just show you where our hospitals are and then to answer some of your questions I know you were asking some questions about per diem rates and other things many of our critical access hospitals and those are the hospitals with less than 25 beds that can't be more than 35 miles from another hospital in our rural areas
those hospitals sometimes have a per diem especially in your spreadsheet that's a little bit higher, which actually is an accounting mechanism that helps DHS when they are doing the cost settlements for whatever their cost-based reimbursement is, they can pay a little bit more up front so that their cost settlements when they come in monthly, quarterly, whenever they need them, they pay less of a bolus later on. It also helps with cash flow issues for our hospitals in our small rural areas, which as you all know, many of you in the room have called me and talked to me specifically about the hospitals you represent, some of whom have trouble making payroll and doing
those other things. So it's really nice to have a little extra money on your daily rate that then gets settled up later. An important thing to tell you about our hospitals is if you see one, you see one, which is really great because that's part of what's great about communities. We're the only entity, the only health care entity that is available 24-7 for any kind of emergency that you might need. We're it. It doesn't matter if you have the ability to pay, if the patient has the ability to pay. We take care of you in our emergency departments. We also do lots and lots
of really great things we don't tell you about. Disaster preparedness. We help a lot in public health in reporting. We do lots of things with newborn screening and other things. The list goes on and on about all the things hospitals do for you and your community. It is important, and I'll go ahead and answer Senator Love's question to talk about not-for-profit hospitals versus for-profit versus governmental. And I'll show you this next slide even though I want you to always remember where your hospitals are on that one. So you can see the hospitals by the number. I apologize that
that is small. I do understand you all have one in front of you which is really nice. But if you'll look at the fourth bullet from the bottom, 64 percent of AHA member organizations are charitable not-for-profit organizations, 25% are private for-profit companies, and 11% are public hospitals owned and operated by city, county, state, or federal government. And so that's really important for you to know. Now let's go ahead and confuse the UPL program even more. Some of our for-profit hospitals are private, and so they're in the private UPL pool. So just because you see these
percentages, don't think automatically that only the hospitals that are not-for-profit private hospitals are in the UPL. That's not it. For-profit hospitals, anything that's private that is not governmentally owned is in the UPL program. One of the other things I really like to talk about with hospitals is that there are a lot of federal designations that the state just has to live with, if you will. Secretary Mann, as amazing as she is, she doesn't get to make the determination about whether a hospital is a critical access hospital or a specialty hospital. She doesn't even get to
make the determination of whether the hospital's a state hospital. Those determinations are made by other entities, and then she's got to play by the funding rules that run along with those hospital designations. So we have lots of different types of hospitals in Arkansas. Our most recent type is a rural emergency hospital. Those hospitals have no inpatient beds. They're an emergency department that has a lot of outpatient services. The federal government sort of entices hospitals to do that especially in small rural areas because it's expensive to
maintain the ready part of having inpatient services right you've got to be ready for everything and then you've got to be able to deal with whatever it is that those patients need who need an overnight stay of more than two days as that's gotten more and more expensive across the country the federal government decided to allow hospitals that didn't have a census in other words, lots and lots of patients who come and stay overnight and need that sort of extra care staying overnight in areas where specialty services have sort of moved into
more tertiary, more populated areas, the federal government recognized that the emergency department services were still necessary and required, so they incentivized some hospitals to convert to rural emergency hospitals by giving them more than a couple hundred thousand dollars a month, and they give them an increased Medicare reimbursement. Secretary Mann and I have been working pretty closely, not only among the two of us, but also with other states, to really try to maximize what those rural emergency hospitals can do for her population, the Medicaid population.
And that's difficult because you've got new federal rules that you all have to follow, and it's a new type of program. But we're really proud of the five rural emergency hospitals that we have in the state. We're really proud of the 27 critical access hospitals we have in the state. There's another type of hospital called the PPS hospital, sorry for the acronym, Prospective Payment System Hospitals. So they're the ones you think of when you think of Johnson Regional Hospital in Clarksville or Baptist Hospital in Little Rock. And so the PPS hospitals are under even a different
payment mechanism. And once again, Secretary Mann has to deal with all of the rules and regs around critical accesses versus rural emergencies versus the PPS hospitals. And specialty hospitals can be a mix of those things. So specialty hospitals can also be PPS hospitals. We definitely have pediatric hospitals that are specialty. You all know about those. They'll be presenting later today. We also have psychiatric inpatient hospitals that are specialized. We have rehabilitation hospitals that are specialized. We have the behavioral health psych hospitals that
are specialized. So the list goes on and on. Long-term acute care hospitals, we call them LTACs in my space. So many hospitals provide many, many services, and then some specialty hospitals just provide the specialty services and focus on those, and then use those larger tertiary hospitals as collaborative helpers, if you will, in the community. One thing I can say about our hospitals experience with the public health emergency is the ability for them to collaborate and cooperate and work well together and share patients if you will in a meaningful way
transfer them back and forth like they need to be done was really really impressive in a state like Arkansas where our reimbursement from all sources are lower than all other states so it's really important that we work together and that we do things well and we let folks who are really great at certain things do them, but we need to be able to keep care close to home as much as possible. It's very important to keep all those hospitals close to home and really create an access opportunity for patients who need care, especially if they need care at some time of
night where there aren't other services available to them. It's very interesting to me sometimes other health care providers talk about hospitals and say, oh, well, you want to do more of that, so we don't do it. Let me be very, very clear. Hospitals need every community provider of every type to do his or her job, their job, to their maximum capacity, because hospitals don't have all the capacity to do what we need to do now. And when other providers fail or are unable to
provide access to patients, we know those patients are still going to come to us in the emergency department, usually sicker and more expensive. So it's important that we're thought of and known and well respected as the backbone of the healthcare community because that is exactly who we are. We need all other providers to do what they need to do to enhance services and access for patients of all types. I put a graph on here. I know many of you in the room care so very much about economics. So I just want you to see the economic impact of hospitals in Arkansas. I
apologize that this data is a little bit old i will tell you representative bentley if you want us to come back at some time we are doing an economic impact study that will be available statewide probably before the 27 session so we would be happy to come back and talk about those each of our member hospitals will get their own economic impact report that they can use in their own community for how dollars turn over and those kinds of things but it is really important to look if you go to the sixth bullet down hospitals contribute 18.05 billion dollars to the economy
each year that's huge so i know when you all talk about the rural health transformation funds and things like that you think oh gosh we're probably going to get maybe up to a billion dollars over five years that's great that's not going to be enough for us and we also fully recognize that hospitals are not going to be the only benefactor if you will of the rural health transformation funds so we're going to have to continue to work collaboratively and i hope you all understand that the financial strains and distress that we are under i had our our director of financial policy
pull some numbers for me last year the patient service margin for hospitals and it's all of them which i i understand mixes apples and oranges because you've got all those specialty types we just talked about and all kinds of different payment mechanisms but the margin for patient services for all hospitals in Arkansas last year negative 5.18 percent so when you're trying to work through how do the funding mechanisms work what do we need to do to
enhance patient care those kinds of things when you recognize that on net patient revenue services hospitals lose money it puts us in a precarious situation and secretary man hears me say this at many conferences where she'll present before or after me hot medicaid is about a third of our funding problem medicare is about a third of our funding problem commercial payers are a third
of our funding problem because we've got to have the patient mix that makes things make sense and it's really important that you all understand how it works together and the the sheer expense and the cost of care um that really happens so can we take a break this real quick questions remember
Representative Mary Bentley
Unverified
39:12
where you're at all right because the board is lighting up all right senator love we'll start with you thank you madam chair
Senator Fredrick J. Love
Unverified
39:22
and so uh jody and i'm looking at i'm looking at the
the graphic that you have so you said there's 116 of all different types of hospitals okay and and i'm looking at your your graph there is a lot of hospitals on here but have we has has a hospital association uh i know uh a year or so ago we
had to put in 60 million dollars for hospitals and different things like that have we did an up-to-date assessment of of where hospitals are as far as their financials because I mean when you when you stated that you know it's a negative
five point or five percent or so um I'm just I'm just trying to get an overall picture of the health of our hospitals and not only the health of them but where are they because you know i'm thinking about camden hospital um and in different rural hospitals so have we did an up-to-date assessment to where you can come and present it to us to say this is the health of our hospitals as a whole this is what this is what we're looking at and this is what we're facing
Speaker 105
40:30
that is such a timely question um yes as a matter of fact at our board meeting just friday just this past friday um our board actually authorized us to do just that type of thing to where we gather information from all the hospitals in the state and then really do a survey that we'll be able to present those results to you and others about the the true health what does it cost today because what it costs today to take care of patient take care of patients isn't anywhere near what the
reimbursement mechanisms are so not to get too detailed but medicare pays us in that prospective payment system, that PPS system that I'm talking to you about, they pay us what they think it would have cost on a patient basis, which doesn't even come close to covering the cost of care for that patient. On top of that, Arkansas is very negatively impacted by a policy called the Area Wage Index at the federal level. Again, it's not something that Medicaid can do or help us do,
but what it says is using a zero-sum game, what it costs to take care of a patient in Massachusetts or New York, that same provider who takes care of the same patient at the same sickness level gets paid substantially more money by Medicare than an Arkansas provider. And that's the area wage index that we work on with the federal level all the time. If any of you talk with Senator Cotton's or Senator Bozeman's office, they'll probably tell you that area wage index and talking about how Medicare Advantage disproportionately treats hospitals poorly, they'll tell you every time they talk to any of our hospital
members other than children's because they don't have medicare those are the top two issues that folks want to bring up all the time in that particular space so we will get that data we're surveying our members we're going to start surveying our members and then we'll be able to give you a lot better answer that's not old data right like that's not from 24 23 etc to really make help us all make
Speaker 120
42:28
some informed decisions when do you think
Speaker 105
42:30
that report will be available it'll probably take about 12 months which doesn't sound very fun but to collect the data do the analysis figure out where we are get good information from the feds also about how
those reimbursement mechanisms are working it'll take that long even with really smart people and outsourcing it to an incredible third party it'll probably be a year before we've got anything ready to go okay madam chair let me get my thoughts together on
Senator Fredrick J. Love
Unverified
42:54
that and then i'll get back in the you thank you sir senator sullivan thank you madam chair you said you don't know
Senator Dan Sullivan
Unverified
43:03
how much it costs well the bottom line how much will it cost you said we don't get paid enough how much is enough that's a great question and that's i know that's why you have the answers you always
Speaker 104
43:14
have great you always have great questions um that's one of that's one of the reasons that we really need to do the survey
Speaker 105
43:20
too and to find out the resources that we have um it's no secret the last time there was a change in hospital outpatient payments from a fee schedule perspective was in 1992 and it was a decrease okay so bottom line we're not getting paid
Senator Dan Sullivan
Unverified
43:32
enough but we don't know how much enough is we're working on it we want to be able to
Speaker 104
43:37
tell you what bottom line when we're paid
Senator Dan Sullivan
Unverified
43:39
enough we don't know how much is enough that's right okay now several years ago we passed
obamacare and we were told and hospital association was all behind it yes sir pushed real hard we said this will take care of all the payments and we won't, it'll actually reduce cost.
Speaker 127
44:00
Has that occurred? Having more people covered has absolutely reduced our uncompensated care cost
Senator Dan Sullivan
Unverified
44:05
that we have in hospitals. Wait a minute, I'm just asking a simple question. We voted and we said it's going to
decrease cost. Has passing Obamacare decreased the cost, but per patient?
Speaker 105
44:18
Which cost? So that's a difficult question because expenses for drugs, personnel, all those other things have increased too. So the Delta has been helped by having more people with a payer source. It's an uncompensated care cost that has been reduced. So when you originally advocated for it, nobody
Senator Dan Sullivan
Unverified
44:36
said this is a difficult question. You said we know it's going to cut costs. Nobody said it's a difficult question that we can't answer. Now you're saying it's a difficult question that we can't answer.
Speaker 134
44:48
I want to always be meticulously honest.
Senator Dan Sullivan
Unverified
44:51
When we passed the bill, people were meticulously honest, saying we're going to cut costs. We cut uncompensated care costs, yes. Are there other costs
Speaker 105
44:58
besides uncompensated care? All kinds of costs, yes. There you
Senator Dan Sullivan
Unverified
45:01
go. Okay, thank you, Madam Chair. Thank you, Senator. Representative
Representative Aaron Pilkington
Unverified
45:11
Pilkington. Thank you. I'm over here, Jodi Ann. First off, great use of the term Luddite. I haven't heard that in a while. But, no, I think I was in the queue because I thought you were going to finish before we got on this, but since we're kind of already talking about this, I'd really like to talk about commercial payers, number one, because we had debate about that during the last session.
Obviously, you know, people come to us all the time. We can't do anything about Medicare, but we're always asked to increase Medicaid spending. We don't want to do that. But what I think a lot of people don't understand is we are the lowest commercially paid in the country. And what it sometimes feels like is we have large insurance companies that have taken advantage of us and our small hospitals that aren't able to negotiate the way that they can with some of these larger health insurance companies. And so I'd like you to kind of talk about that a little more and kind of go into it because, I mean, my understanding, if I get an MRI in any surrounding state, whether it's an expansion state or a non-expansion state, they still pay more in those states than they do here in Arkansas.
And so I can't understand why getting an MRI in Clarksville, Arkansas, is somehow a different cost than getting it in Tupelo, Mississippi, or prior Oklahoma. So could you kind of walk us through that? Because I think it's helpful to the community to understand we're always focused on the Medicaid aspect, But there's a huge, you know, elephant in the room that nobody seems to want to talk about, which is that in many ways, you know, our commercial payers are not paying what I think needs to be paid.
And unfortunately, we're now having to eat the cost, and then they're coming to the state wanting us to subsidize them. So could
Speaker 105
46:52
you go into that a little bit? I sure can. And I apologize. I should have put a slide together. If you all have a pen and a piece of paper, I will give you some numbers. and I'll we'll get to staff
Representative Mary Bentley
Unverified
47:03
a prettier picture of what I'm about to say thank you if you want to go to your next slide and take a little bit longer and respond to his question just feel free to
Speaker 105
47:12
do so we'll get the others when you get done so sure sure take your time answering this okay so um we pulled information in 2024 from the surrounding states on what their average payment was for a
patient okay so keep in mind this is going to have everything all cobbled together commercial payers are going to be in there medicaid's going to be in there medicare is going to be in there even when there's no payment it's going to be averaged in there right so in texas for one patient it's seventeen thousand three hundred and forty six dollars and sixty cents that that hospital would be reimbursed in oklahoma it's fourteen thousand five hundred sixty seven dollars and 20 cents in tennessee it's thirteen thousand six hundred eighteen dollars and sixty cents
in mississippi it's twelve thousand five hundred and seventeen dollars and twenty cents louisiana eleven thousand nine hundred eighty eight dollars and eighty cents missouri eleven thousand seven hundred sixty seven dollars and forty cents arkansas eight thousand eight hundred forty two dollars and fifty cents if drugs alone cost more than ten thousand dollars a patient much less personnel in a
hospital because let's face it the largest expense hospitals have is personnel and that's exactly the way we want it it's health care heroes with servant hearts taking care of our patients that should be the largest cost in hospitals it is the largest cost in hospitals but if every patient costs ten thousand dollars then we're losing twelve hundred dollars every patient and yet in texas texas is being reimbursed seventeen thousand three hundred forty six dollars and sixty cents
for that same patient so it it is one of the reasons why at the end of last session we were so passionate about trying to get a little bit of parity in the commercial payer space because an Arkansas insurance premium paid for by an employer and an employee sharing right it's almost the same in Arkansas as it is in Oklahoma as it is in Mississippi so if your premiums are the same and what insurance companies measure is risk then you have a risk tax every
time your premium is increased because the hospital cost is pretty much the same even though expenses go up right cost of drugs go up cost of personnel goes up cost of drugs go up and and supply chain demands but if your insurance premium is the same why in the world is your employer's money worth so much more to a provider in a neighboring state than it is to Arkansas and and I think that's a hard conversation that we're all going to have to have because guess what hospitals are the largest employer most of the time in communities where they reside
so we understand the cost of providing insurance for our employees too so there's got to be a balance that makes a lot better sense because hospitals aren't really managing risks we're taking care of injured patients and sick patients and trying to get them home as fast as possible and so i thank you very much for the question um it is something that we're all going to have to talk about and struggle through and have open conversations about and be pretty transparent
about what your premium dollars are actually being used for because not just hospitals but our other collaborative providers can't survive on paltry rates anymore either especially when we know there's not more money in medicaid we don't believe there's going to be any more money in medicare coming down to help providers so the only cost shift we have is to commercial payers and if commercial payers are taking in about the same number of premiums in our state as they are in surrounding states then why are our providers paid so much less
Representative Aaron Pilkington
Unverified
51:13
you answer my question with a question don't you agree i uh i would agree uh and thank you I think it's really good for people to understand, especially some of the people who aren't in public health, to kind of summarize that, which is we're paying very much the same premiums as our surrounding states, yet we're getting reimbursed less. And so when you have that dealt and that difference, people need to start asking a question, why are we suddenly starting to lose hospitals and why suddenly we're not reimbursed what we should,
and yet we're paying the same rate we would if we were in a surrounding state. And so I think it's a really good question that we as legislators need to start asking, our partners, our external stakeholders, because at some point, you know, something's got to change. So I appreciate the
Speaker 105
52:04
question. Appreciate the time. I'll add to, from an upper payment limit perspective, because that's a lot of what DHS presented on. Representative Beck, you asked the question about how do our hospitals feel? Do they feel funny if there's a different rate being paid
for their portion of the assessment right the truth of the matter is the assessments that hospitals pay are based on a percentage of net patient revenues so if your hospital has a lower net patient revenue than another hospital the percentage is the same but the dollar amount is different and so that also answers senator petty's question there have been a couple of hospitals in the past who don't see very many medicaid patients and so they get they get very irritated that they have to pay an assessment without getting a benefit of the assessment back our argument to
them is always well if you see medicaid patients you'll get distributions back because the money is distributed back to those hospitals based on their medicaid patient load and so you sort of you're trying to offset your losses um and someone else asked the question uh maybe it was you representative garner on the percentage like what's the cost versus so without the upper payment limit program hospitals would get about 52 to 53 cents of every dollar of cost they have
in medicaid with the upper payment limit program we get to 78 cents so you're still losing on every medicaid patient which then takes you back to the okay jody and you've told us that we're losing on medicare i haven't yet told you that we lose even more on medicare advantage that may be a topic for another day but you lose on medicare medicare advantage you know you're going to lose on medicaid even when we're trying to do things to help offset the general revenue expenses by paying for some of those state shares on our own behalf so that we can maximize the federal government's
investment in arkansas providers and in arkansas patients like that's why we're willing to put that assessment up to get the dollars back so then when you cost shift commercial payers if they're still putting us in this wrench um then we're really in a in a pickle but to answer your question specifically without the upl would be 52 to 53 cents on every dollar of cost with it we get closer to 78 cents per dollar of cost which means that we're still losing almost a quarter more than representative garner you can ask
Representative Mary Bentley
Unverified
54:29
another question thank you very much um actually
Representative Denise Garner
Unverified
54:33
thank you um for the question about the commercial lenders
that was also a question of mine and i would just want to add y'all talked a lot about it but i would just want to add that what provider is going to stay in arkansas when they can go across the state and make twice as much money and so how many providers are we losing because we're not reimbursing for uh adequately for services. And that's rhetorical, but hopefully we'll get some answers to that. And the other question is, as y'all are talking to the other states, obviously the federal reimbursement,
what is different besides the wage piece of it from the federal side? And then is there anything that the states are doing that are helping in any way that we could look at as well? So, yeah, I'm just clawing for something to help our hospitals. Oh, yeah, and trust me,
Speaker 105
55:28
I love that. Me too. I live and breathe trying to help our hospitals every day. You know, health care financing is a patchwork quilt,
and it really is a patchwork quilt here in Arkansas because we have cobbled together and sewn together as many programs as we can to make it make sense without costing general revenue dollars. we fully recognize how much money goes into the medicaid program um and to us from the hospital industry's perspective even though it's a large expense it's i don't know are we the highest are we the highest no no not not the f map from the overall medicaid budget we're about
two billion of that from state general revenue of your medicaid budget give or take yeah so so sorry we this is
Speaker 149
56:19
what happens when we communicate right um but i
Speaker 105
56:22
think when you're trying to put that patchwork quilt together other states have come up with waivers we use waivers here our past program is a 1915c waiver we have 1115 waivers for the expansion program we'll try to get waivers which is basically hey let us do something that's not the letter of the law
to try to maximize the federal government's investment in us and still save taxpayer money whether it's federal tax dollar state tax dollar or even a local one um i know on the previous couple of slides i think one of the points is 24 of our local communities have a local tax to try to help their hospital too that's in addition to all of this stuff that we're talking about um so people and states and associations are constantly looking for opportunities to figure out ways to maximize government's investment in taking care of our people and
we're going to keep doing that we're working on upl now to try to say okay is there something else we can do to maximize it because in the one big beautiful bill hr1 there were some changes to how people can participate how states can participate in upl programs anyway whether that's upl state directed payments they didn't really bother intergovernmental transfers much but we do worry a lot about lost opportunities when the federal government makes overall decisions that say hey this program that has been working for you we're going to change it it it disproportionately hurts
states like arkansas that already don't have a lot of revenue sort of embedded in our programs to help patients have their care covered representative rye yes
Representative Johnny Rye
Unverified
58:05
ma'am thank you mr chairman um on the commercial care and medicaid and medicare the reimbursement time frame on on each one of those can you kindly go over a little bit of that and and say exactly how long it takes to get reimbursed sure one of those particular or all
Speaker 154
58:21
three of them really you want to go first
Speaker 25
58:25
this is where I get to brag right thank you for the question I'll start Medicaid pays weekly and what we try to do is if a claim is received by a certain time during the week and it is processed goes through the edits it is paid out the following Friday. So we do that every week and so we we do have a mechanism that if a claim is suspicious or doesn't meet the edits we have to work it within 30 days according to the federal regs. If it does fall within a bad
category of suspicion of fraud we can hold it indefinitely so and we work with our other partners on that but historically medicaid pays every week
Speaker 156
59:08
that's that's very important and okay yes we
Speaker 104
59:12
say that a lot medicaid might be our lowest payer but it's our fastest and
Speaker 105
59:17
then medicare pays on they have all kinds of different rules medicare has all kinds of different rules we really have a lot of trouble with medicare advantage plans and some commercial payer plans because they may
say their rate is higher than traditional medicare might be but it cost us a fortune to try to get it because it'll be denied originally or have prior authorizations or they'll have different rules for which doctors can review the paperwork to determine whether what we did was urgent emergent and how much money it should reimburse the provider for for the care that was provided and so we have many people inside a hospital who work in revenue cycle and it's their only job is to track down
money that we know is owed to us that's their only job and and that's expensive and that's an administrative cost that we don't all
Representative Johnny Rye
Unverified
1:00:14
often capture and talk about yes ma'am
Speaker 117
1:00:21
hey thank you ladies okay thank you mr
Senator Fredrick J. Love
Unverified
1:00:24
chairman you're welcome senator love thank you again madam chair um so Jodianne, you
Speaker 117
1:00:31
began talking about the reason why, I
Senator Fredrick J. Love
Unverified
1:00:34
guess, the difference in the payment mechanism as far as the commercial carriers.
Now, you began to explain it, but I kind of got lost in it. So basically, tell me exactly what's going on so that I understand in plain language. Exactly what's going on with our commercial carriers and why we are not being reimbursed versus the surrounding states. Like, just tell me, just
Speaker 105
1:01:02
flat, what's going on? That's definitely a question that I hope you'll keep for commercial payers. But from our perspective, they are managing, commercial payers are managing risk.
And so they assign premiums based on risk of how much they believe it's going to cost to reimburse providers, to take care of drugs, to get people to behave better, right, so that they're less expensive later on, those kinds of things. Commercial payers have private contracts with hospitals, with other providers, et cetera. And in those private contracts, it's not just the payer rate that becomes a problem. It's how much money it costs us to get paid what we know we should be paid
because of the administrative burden of going through the paperwork that the commercial payers put on us. Do we have the right medical record? Did the right physician sign the document? A lot of that is justified in wanting to make sure that you're paying for the right thing at the right time, but some of it is administrative just to be administrative because we'll take prior authorizations, for example. If you go to the doctor today and the doctor says, Senator Love, you need X procedure, it may take us a week or two to get information back from the insurance company that they'll approve the procedure.
Then after they've approved the procedure, you've already gone home. You're better, right? It may take us in the hospital world another two or three weeks to get paid what they told us they would get paid when they gave us permission to do the procedure on you in the first place. And if they drag it out even longer than that, in some cases, with the workload, with everything else that's going on, what insurance companies really like to do is paperwork us to death to where we just give up. It's just not worth it anymore to go after that bill for you, Senator Love, even though you've paid your premium the whole time.
Senator Fredrick J. Love
Unverified
1:02:51
Okay. So from commercial carriers now to Medicaid, what's the rate? Why is the rate so low? I think the Medicaid rate's low because it's
Speaker 105
1:03:01
whatever the state's investment can be in the Medicaid program, right? The rate is what it is. The last time we had a rate change for inpatient in Medicaid was in 2007. And that's where we went from the baseline of $675 a day to the baseline of what you see as $850 a day. And, of course, you can see some of the fluctuations there.
It's just about an investment in what the state has enough money to do and the decisions that you've made on how you want to make those
Speaker 117
1:03:30
investments. Okay. All right. Thank you. Thank
Representative Rick Beck
Unverified
1:03:38
you, Madam Chair. You're welcome. Representative Beck. Thank you, Madam Chair. We talked a lot about the commercial payers, right? And you mentioned everything, did a great job of it. I like it. But the one thing we didn't talk about is, is there a corresponding profit margin for them in Arkansas versus Texas,
versus Louisiana, Missouri, the other ones that you mentioned there? Are they actually, I think in the case of Texas, it was more than double. So are you saying that they would make double the amount of money insuring someone in Arkansas because they would pay half the amount? You see where I'm trying to get here? I'm following you. All right. So it seems like that would be a pretty easy number.
And as I understand it, insurance companies have to pay a certain percent for services that they – so anyway, see, all that's not lining up. stars aren't lining up for me there so it seems like that would be an easy target or i'm not understanding i'll
Speaker 105
1:04:48
go down that path with you i think you're right i think you're referring to what's called the medical loss ratio and the medical loss ratio is a requirement that insurance companies have to pay a certain amount into providers or quality improvement versus what
they take for their administrative fee right so remember i told you hospitals net patient revenue margins on the whole, right? Apples and oranges mix in all different types. Some who do well, some who do poorly. It's a negative 5.18%. Insurance companies, if they have a medical loss ratio of 85-15, what does that guarantee them with their 15%? Because their 85 is what they have to spend, or at least what they have to say they're spending on quality improvement initiatives and direct care for patients. So a quality improvement initiative may be that an
insurance company has a sub company that does something that they say is quality to where you can put those funds into that 85 for their medical loss ratio um it sounds to me like representative beck you might be interested in a medical loss ratio transparency bill in 2027 um because then you could really know where your premiums are what's going on how they're being spent and really how the administrative overhead gets captured in those insurance company plans and then passed on to providers and increased premiums thank you representative meeks
Representative Stephen Meeks
Unverified
1:06:10
thank you madam chair i have have two questions one i think you'll be able to help me with the other one i might catch you a little bit off off guard but uh first off my my first concern is you know the federal budget is 39 trillion dollars in debt and sooner or later that bill is going to come due and obviously as you know medicare medicaid are large sections of that And, you know, at some point, something's going to have to give, right? And unfortunately, it's probably not going to be pretty when that happens.
At the same time, the cost of health care, as you know, based upon these discussions, not only are individuals paying for the health care in the hospital system, but we also have the additional cost of trying to support this insurance complex up here, which is a huge, huge driver, telling you something you don't already know. So my first question is, is because of the issues that are that you face with the insurance companies, do you as a hospital have the ability to go directly to the employers in a community and set up an insurance program directly with that employer and say, you pay, you know, so much a month for premiums and your folks can come to our hospital and we'll take care of it.
and basically you get rid of all that paperwork. I don't even know if that's legal or not, but is that something that has been considered?
I know certain doctors will do that with patients, but do hospitals have that opportunity?
Speaker 105
1:07:39
Has anybody ever done that? Is there benefits to that? Hospitals really don't have that opportunity as long as they are willing to accept Medicare and Medicaid patients. So there's a whole playbook that hospitals have to play by called the Medicare Conditions of Participation. So in order for you to be a hospital who is eligible to receive government payments, you have to play by their rules, play by their playbook.
So because of EMTALA, which really requires all patients are screened, and if you have the ability to take care of the patient regardless of their ability to pay, you still have to do that. We would have a really hard time saying we're only going to see the patients that
Speaker 170
1:08:15
we told you in a community we would see because we've worked out a payment structure. Oh, no, no,
Representative Stephen Meeks
Unverified
1:08:21
no, I'm not saying that. I'm saying you still see everybody that comes in, but you would just offer this service to an employer within the community. So instead of them having to go out and shop to get insurance from, you know, whoever,
they could just get their insurance, quote, unquote, from that hospital. So now, granted, their employees would be limited to only visiting that hospital probably or within that hospital network, but it would allow the hospitals to control those premiums and those costs and to make sure they're reimbursed at the correct rates versus having to depend on an outside organization. So like I said, I don't know if that's a possibility for hospitals to consider or if they could set up a separate entity, business entity related to the hospital
to offer that to employers because I would think that they could offer a smaller rate, lower rate to a local small business, get their people taken care of, and it would be a win-win-win all the way around. So I don't know, like I said, if that's something that's even possible. There would have
Speaker 105
1:09:20
to be a lot smarter lawyers than me looking to antitrust, anti-kickback, stark laws, all those kinds of things that may violate having special privileges
Speaker 107
1:09:27
or special treatment for one group of folks over another in the hospital world. Well, it might
Representative Stephen Meeks
Unverified
1:09:32
be worth hiring those lawyers to try to figure that out because it could pay for itself in the long run.
The second question I have, the one that you may not be able to answer is, as you know, the growth of technology has exploded with AI over the last couple of years. And I'm just wondering, there's so much potential there as far as patient outcomes and help solve some of these issues that we're talking about. Where are the hospitals in our state at implementing these technologies and bringing these technologies to our state? Are we keeping up with the technology, or are we going to be last, or where are we at about?
Because if we can bring these technologies to the state, better outcomes to our patients obviously would help drive some of these costs down.
Speaker 105
1:10:19
Yes, Representative Meeks, it's all over the board. Our hospitals are constantly looking for ways to improve the health care delivery that they do, whether it's you have a product that's better, a service line that's better, something that's more affordable on down the road. I will say with the low reimbursement that we've had over time, some of our hospitals in Arkansas are significantly disadvantaged compared to hospitals in other states
because any sort of reserves or extra dollars, if you will, that we would have had, we've had to spend on routine patient care. So it puts us in the predicament, and I'll give you an example. lady I know went to a hospital in a neighboring state for emergency department care, had a very different experience with her phone, with the app on how long your wait's going to be, when you're going to be in this room, when you're going to be in that room, than some of the opportunities that we have here in Arkansas. Part of that is the hospital in that other state, the hospital system
in that other state had the ability to invest in that equipment because there was enough money in its system to be able to do that. So I can assure you that hospitals are definitely looking into that the rural health transformation dollars may give us some opportunities to have some startup costs that we wouldn't otherwise have especially in the telemedicine space so we're really looking forward to opportunities that we'll have to be able to advantage those systems I'll tell you that this one of my systems that's in multiple states right now took all of its Arkansas patients who
had about the same number of patients in Arkansas as they had in Missouri and pretended all of those patients had the exact same payer that they had in missouri versus an arkansas payer it was a hundred million dollars different so that's where we're going with that we want to invest in technology but we're just going to have to have the revenue and the resources to do it so um we're we are looking at some opportunities any opportunity whether it's grant funding philanthropic funding private public partnerships anything we can do to try to find resources which is why we're we are
looking forward to the rural health transformation funds, even though we recognize it's one-time funding and it's very
Speaker 104
1:12:28
prescriptive, you know, all the things, um, it's sure it beats not having
Representative Stephen Meeks
Unverified
1:12:32
any. Sure. Definitely. And does the hospital association try to keep an eye on what's going on to provide the training to the local hospital? So they know what's out there
Speaker 104
1:12:42
and available. You got people looking at that. We sure do. Uh, we have a whole arm
Speaker 105
1:12:47
called the Arkansas hospital association services, Inc. Its whole job is to find services, vendors, group purchasing arrangements, organization supply chain management any kind of help with uh data gathering and control to sort
Speaker 104
1:12:58
of give a good housekeeping seal of approval to those vendors to help our hospitals know which ones we've already vetted to save them some
Representative Denise Garner
Unverified
1:13:09
time okay perfect thank you thank you all representative corner thank you madam chair and this question is for you uh quickly if is this the time and place to ask about our home and the passes an update there or will we have another meeting for that or it's not really
at this point that's okay yep I'll get with y'all but I do have some questions about how the passes and our home are affecting
Medicaid services and if that's working thank you thank
Senator Jim Petty
Unverified
1:13:39
madam chair so I want to go back just a little bit and and representative mix was kind of touching on the subject a little bit and that is this wage report that sets the rates I suspect I know the answer to this question but have we I mean looking at data from for various reasons from surrounding states
the numbers don't make sense and so have we had do we have an opportunity to have someone look into that at the federal level so we can maybe get some sort of adjustment maybe there's an outlier maybe there's an outlier in Arkansas I mean, do we have that opportunity, and have we done that in
Speaker 105
1:14:23
the past? The answer is yes. Unfortunately, we have a game of votes that matter at the federal level. Many of the states that benefit greatly from an area wage index have a lot more population,
which means they have a lot more members of Congress than Arkansas does. So even when you put West Virginia, Arkansas, Alabama, Kansas, Mississippi, the states that don't have a better wage index altogether, we can't climb that hill to where we have more than half of the 435 votes that we need in Congress to change the net neutrality provision of the area wage index policy at the federal level. We get it that we've got two senators just like every other state, but you still have that other chamber where you've got to get over that vote threshold.
So you've got just a very logical numbers game problem, even with all the states sort of circling together. We can't come up with a number of congressional votes, even though our entire congressional delegation is supportive
Senator Jim Petty
Unverified
1:15:27
of us in this manner. Follow up. So it's not just a simple analysis of the wage, so to speak. It's the do math, it
sounds like. But we really, when they do make an adjustment, do they continue to make adjustments, you know, for the haves and make that gap between the haves and the have-nots even farther?
Speaker 105
1:15:49
yes unfortunately states like arkansas that are pretty efficient in our care that have done more with less for a very long time we get punished for our efficiency in the area wage index game okay thank you thank you representative rye
Representative Johnny Rye
Unverified
1:16:08
yes thank you madam chairman now i want you to straight me out on this one. Okay. Texas, how much is the rate? $18,000? Arkansas is $8,000?
Speaker 183
1:16:19
Maybe they need to be looking at what we're doing here. Thank you.
Speaker 184
1:16:23
Okay. If it's okay, Sheena, if you'll join
Representative Mary Bentley
Unverified
1:16:28
us, Sheena Olson from Children's, we had that on there. If you guys will all stay where you're at, we're about to finish this. I appreciate your patience. I think it's been very helpful for our committee get to hear from everyone so um i know maybe you'll know i asked to have an audit included in our packet today to um from children's recently so i think it's perfect timing as we've
looked and seen i was uh just saw on the paper this past week where el dorado is having to combine with baptist to survive so we see a lot of our our small hospitals struggling but somehow children's is not so some of the information we've seen today probably will bring some revelation to that I have some more questions I have for Senator Mann. I mean, Secretary Mann before we leave. Sorry about that. But I just wanted to give you an opportunity. Sheena, if you had something you'd like to say about children's at this point, or if members have questions, we can ask those as well. But I wanted to give you an opportunity, since we had you on there, to come and speak.
Speaker 186
1:17:25
Thanks. Thank you. Sheena Olson, Arkansas Children's Vice President for Government Relations. I don't have anything specific. I think that we are, I think that they've already pretty much illuminated the differences between a pediatric healthcare system that has very few Medicare patients and is more a Medicaid patient-based and payer mix versus the adult care hospitals that are very different in all of their patient mix and who they see and the community patients and things.
So I'm here to be helpful. All right,
Representative Mary Bentley
Unverified
1:18:00
I'll start with questions. If any other members might have some questions. So, Secretary Mann, as we look at the per diem rate, is that anything in statute? Is that CMS-driven? So where does the rate that we get for our
per diem rate come from? Yeah,
Speaker 19
1:18:15
thank you for the question. I believe it's driven by our state planning calculations. It does have a tendency to change at times. I can pull a specific formula for you.
Representative Mary Bentley
Unverified
1:18:27
Okay, I think that might be helpful for members. so we could see what drives the difference between the per diem rates on there. Because I'm just, honestly, just as a person who loves
transparency and loves all of our hospitals to be successful across the street, I have heartburn. I want to see that children, when I look at their audit,
and they've got a 10% increase, and I have hospitals that are barely surviving. And when I look at the per diem rate, it just, anyway, it would be helpful for us to know where that came from and why. I just didn't know if it was in state statute
or not, but it's by rules. So, anyway, okay.
Does anybody else have any other questions before we end the day? All right. Thank you all so very much. I think it's been very helpful, very eye-opening, will make us better ambassadors as we move forward to help our hospitals across the state. So thank you all very much for being here today. We appreciate it. Oh, wait, wait, wait, wait, wait. Secretary Mayhem knew we needed that one more thing. Thank you. We need our update of our reimbursement rates for Living Choices and Assisted Living. Thank you very much. Yes, ma'am. Thank you.
Speaker 24
1:19:29
for the opportunity. Before you is our monthly letter and it was dated March 3rd. We are in the process of doing our cost reporting for the past 12 months that ended on 1231 of 25. In the letter it's dated March 3rd. We had no current updates but I do need to update you that one assisted living has announced its closure. They announced it on 313 so we are working with them. It will be closing in the next 30 days can you tell us
Representative Mary Bentley
Unverified
1:19:58
which one that is or is it public knowledge yet
Speaker 190
1:20:02
well they said they did send it to us so it is i would think that
Speaker 19
1:20:07
it would be public um i'm looking for the name thank you here comes director hill he can probably tell you the name we all need help thank you i know where it's located i
Speaker 194
1:20:20
just don't know the name morning madam chairman um the facility that is closing is the pillars of the community located and cross it and cross it okay yes
Representative Mary Bentley
Unverified
1:20:27
ma'am thank you so much i appreciate you guys an update um on them so we'll have a we'll have a plan together to help those patients move to another place so
Speaker 194
1:20:40
that yes ma'am we have nine clients that are living choices waiver clients in the facility our dhs staff our field nurses our rns that work with them on an individual basis are working with the community with the facility and the facility itself is also working with the families and all of its residents to transition to a location of their choice, whether that be another assisted living, back to another HCBS service, to any other institution that is appropriate for their setting.
Representative Mary Bentley
Unverified
1:21:06
Thank you. Thank you all very much. We appreciate it. Sorry, we have
Representative Howard M. Beaty, Jr.
Unverified
1:21:14
one quick question. Representative Beatty. Thank you, Madam Chair. With the Piddler's notice that we received and a lot of calls from constituents and concern in the community uh as well as several providers uh on on
the reimbursement rate do we think when will we have that that updated rate study
Speaker 198
1:21:36
thank you representative the current cost reporting
Speaker 194
1:21:39
period will run through april 30th we are working with our providers to to get those cost reports returned it can be a delay if they are tardy on getting those to us by the end of the 90
Speaker 198
1:21:52
day statutorily required reporting period uh to get that in our expectation is that with timely reports being returned they are compiled as they come in and so it's not a it's not a matter of our our buyers and staffer which is our contracted actuarial service that puts this together for us
they take that data as it comes in real time and puts it on a i call it a spreadsheet puts it into their programs to begin the cost reporting process and so the anticipation is if we can get those returned to us by april 30th that we would have a report generated for secretary's office for review prior to the end of the fiscal year thank you uh
Representative Howard M. Beaty, Jr.
Unverified
1:22:29
second question kind of a follow-up how many of the service providers have closed in the in the last last year i believe in the last 12 months this
Speaker 24
1:22:44
is the first one i know there have been some chows or change of ownerships but i'm not we can i can confirm it but i don't believe in the past 12 months we've had any that have closed all right you said that
Representative Howard M. Beaty, Jr.
Unverified
1:22:56
there were nine that were under living choices at at this facility yes sir there are nine clients under our
Speaker 202
1:23:02
waiver program at the facility all right thank you senator gilmore thank you madam chair and
Senator Ben Gilmore
Unverified
1:23:13
just to follow up to that thank you all for being here
um i know in the past with these rate studies there's been difficulty in getting these entities to submit not just timely but to just submit right and so i see you nod in your head in agreement to that um has this facility always filed timely and or do you have that off the top of your head
Speaker 194
1:23:38
and have they participated previously? Yes, sir. They have participated center. Um, to my knowledge, my recollection, we've not had a difficulty with this facility reporting timely. Uh, it was not one of our, um, stragglers last year. Okay, perfect. That's
Representative Howard M. Beaty, Jr.
Unverified
1:23:52
what I need to hear. Thank you. Anyone else? Representative Beatty. Just while, while we have the secretary at the table um our our state cms plan uh maybe a year ago a little bit longer we were told that you were working on a new plan um and where do we
Speaker 25
1:24:22
stand on that may i ask specifically for assisted living sir or something
Representative Howard M. Beaty, Jr.
Unverified
1:24:26
in no the the overall plan for the um
the waiver plan we talked about that at one time and and i just kind of see where
Speaker 24
1:24:35
we stood on that yes sir so we are in the process of drafting and trying to look at what we do in the next iteration of the waiver it does expire later this year we will be um preparing and bringing before y'all some options and some some considerations to do the next waiver
Representative Howard M. Beaty, Jr.
Unverified
1:24:52
and at what point will we see that
Speaker 24
1:24:55
probably not until um the summer till the
Representative Howard M. Beaty, Jr.
Unverified
1:24:57
summer yes sir so i mean my question is that
we we've heard the the thunder but kind of ready to feel a little rain see what it looks like yes sir i understand
Representative Mary Bentley
Unverified
1:25:12
thank you all right thank you very much this meeting is adjourned Thank you.
Agenda
A. Call to Order
B. Overview of Department of Human Services (DHS) Hospital Spending [Exhibits B1-B3]
C. Update of Reimbursement Rates Under the Living Choices Assisted Living Waiver Pursuant to Act 213 of 2022, Section 15 [Exhibits C1-C2]
D. Other Business
E. Adjournment
Documents
Speakers
Representative Mary Bentley
Unverified
Speaker 12
Speaker 15
Speaker 19
Speaker 24
Speaker 31
Representative Matt Brown
Unverified
Speaker 35
Speaker 37
Representative Rick Beck
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Speaker 25
Senator Fredrick J. Love
Unverified
Representative Jessie McGruder
Unverified
Senator Jim Petty
Unverified
Speaker 93
Representative Denise Garner
Unverified
Speaker 98
Speaker 105
Speaker 106
Speaker 120
Senator Dan Sullivan
Unverified
Speaker 104
Speaker 127
Speaker 134
Representative Aaron Pilkington
Unverified
Speaker 149
Representative Johnny Rye
Unverified
Speaker 154
Speaker 156
Speaker 117
Representative Stephen Meeks
Unverified
Speaker 170
Speaker 107
Speaker 84
Speaker 183
Speaker 184
Speaker 186
Speaker 190
Speaker 194
Speaker 197
Speaker 198
Speaker 202
Senator Ben Gilmore
Unverified