HOT SPRINGS -- House Speaker Matthew Shepherd says he is concerned about funding for rural health care and hospitals.
"We are taking steps to try to address the issue, and there is a lot of factors that are at play," he said Wednesday in response to a moderator's question during a legislative panel discussion at the Arkansas Rural Development Conference at the Oaklawn Event Center.
Shepherd, R-El Dorado, said one factor is the covid-19 pandemic "really turned the world upside down as far as health care goes.
"But another part of that is that our providers received an increased reimbursement rate during covid that now is going back, and it is reverting back and essentially they are having to offset some of those additional reimbursements [and] now it's time to come and pay those back and so it is creating a crunch, on particularly our rural health care providers," he said.
Hospitals received advanced Medicare payments early during the covid-19 pandemic and are receiving lower Medicare reimbursements in order to pay back that money to the federal government, state Department of Human Service officials have said.
Shepherd said state lawmakers have set aside $60 million for a fund to tap to try to help rural hospitals at a point of potential closure. So far only $6 million of the federal American Rescue Plan funds have been spent to keep a hospital in Ouachita County afloat.
In September, the Legislative Council voted to authorize the state Department of Human Services to transfer $6.07 million in federal American Rescue Plan funds to Ouachita County Medical Center in Camden with the aim of helping the hospital avoid closure soon.
At that time, the council voted to send a separate request by North Arkansas Regional Medical Center in Harrison for $10 million in federal American Rescue Plan funds to its Performance Evaluation and Expenditure Review Committee for further review. Eight other hospitals applied for federal American Rescue Plan funds ranging from $1.5 million to $10 million last fall, and more hospitals are expected to seek funding, state Department of Human Services spokesman Gavin Lesnick said Thursday.
Shepherd said Wednesday that "We have $54 million left and what we have done with the governor's office, and I guess [the state Department of Human Services] has been part of that, is various hospitals have submitted their financial information.
"One of the things that we are looking at is if they are asking for state funds and we are going to consider providing those types funds we need to look at their books and we need to know, No. 1, are they really at the point that they do need that assistance and, secondly, how are they operating."
Shepherd said anytime government provides some assistance there is always going to be potential naysayers about how those operations are being run and whether something else could be done.
"We are taking a really close look at that, and we are in ongoing discussions with the governor's office and leadership on both ends," he said.
REVIEW OF FINANCIAL CONDITION
While the state Department of Finance and Administration has not contracted with any companies to review applications for federal American Rescue Plan funds, the New York-based Alvarez and Marsal company was secured in 2022 to review the financial condition of several rural hospitals, department spokesman Scott Hardin said Thursday.
The finance department contract with Alvarez and Marsal is for $1,323,655 from Jan. 1, 2023, to June 30, 2023, and $997,371 of that total has been distributed to the company to date, he said.
The aim is for the company to provide a final report on the financial status of several rural hospitals to the Legislative Council next month, Hardin said, but as to whether there will be a request for a new contract with the company is yet to be determined..
As for El Dorado's hospital, Shepherd said a local group has entered into an agreement to purchase the hospital in El Dorado. The University of Arkansas for Medical Sciences is going to operate the hospital and the state is providing some assistance to that.
In this year's regular session, the Legislature set aside $12 million in state-restricted reserve funds for UAMS to support the new South Arkansas Regional Hospital in El Dorado. These funds will cover the hospital's operational expenses associated with the acquisition and extend specialty care services in the area, according to UAMS.
Shepherd said the "local dollars going into that are about three to one compared to the state investment, and I think it is illustrates just the fact that whether it is at the state or local level that there are probably going to be more and more instances where at all levels we have to take a really concerted look and effort to retain our rural hospitals and to maintain some potential access to those services."
For example, he said keeping the hospital open in Camden was particularly critical due to the defense contracting industry and its jobs in East Camden, and the potential for more economic development in that area, "but if there is no hospital within 40 miles of those facilities then that could be a potential concern.
"Worried is probably not the right word," Shepherd said about his concern about rural health care and hospitals.
"I think that we have to just keep our eye on it and work with our health care providers to provide that sustainability," he said.
Rep. Howard Beaty, R-Crossett, said "I think we all should be worried about the current level or status of health care in our communities.
"Rural hospitals right now are still recovering from the effects of covid on their operations," he said at the Arkansas Rural Development Conference. "I still think the biggest setback we have in rural health care is under-utilization by the community, so folks in this room need to be cheerleaders for your rural hospitals and to work with them, and I know we do."
Beaty said "I think we have strong health care providers in those communities, but there is a strain on that sector and I think that's something that we at the Legislature ... are going to have to continue to work with and deal with those issues as they come up."
Asked whether he agrees with some conservatives that rural hospitals have an expense problem and are not spending their money correctly, he said hospital operations had to change during the covid-19 pandemic.
"The increases we saw just in the inputs on the labor side for hospitals [and] the supply side, so there were definitely issues that were raised and changed the funding model for rural health care," Beaty said. "A community that utilizes their hospital and they understand that what they have is of the same quality that they may have in a more urban area, I think that's some of the issue."
The pay raises for nurses and the traveling nurses to attract and maintain levels in rural communities have been a major issue for rural health care, Beaty said.
"But I do think the communities are working to address those issues, and I think we'll have some solutions to work with," he said.
Meanwhile, Arkansas' Medicaid program is amid an expected decline its beneficiaries in the next several months, which could impact rural hospitals.
MEDICAID CASES CLOSED
Earlier this month, the state Department of Human Services reported the cases of 72,802 Medicaid beneficiaries in Arkansas were closed at the end of April because they either didn't return requested information necessary to determine their eligibility or are no longer eligible for Medicaid.
The closed cases include 44,667 Medicaid beneficiaries whose coverage had been extended previously because of the special eligibility rules during the federal public health emergency and 28,135 other Medicaid beneficiaries whose coverage was closed as part of normal operations, Lesnick said earlier this month. The reasons for ending the Medicaid coverage varied among these groups.
These figures reflect the first month of Medicaid eligibility re-determinations as part of the department's six-month campaign to unwind Arkansas' Medicaid rolls following the end of the continuous coverage requirement that was in effect during the federal government's public health emergency, the department said..
The continuous coverage requirement prevented the state Department of Human Services from removing most ineligible individuals from Medicaid, but normal eligibility rules resumed April 1, according to the department. The requirement meant that no Arkansans could be removed from the Medicaid rolls for a change in income or eligibility until the federal public health emergency ended, and cases could be closed only if individuals moved out of state, died, were incarcerated or requested their coverage end.
The state Department of Human Services "is moving swiftly to dis-enroll individuals who are no longer eligible to ensure that Medicaid resources go to beneficiaries who truly need them, and this will continue in the coming months as the unwinding progresses," the department said earlier this month. The Medicaid program's enrollment totaled 1.06 million May 1 and Medicaid's enrollment totaled 1.13 million April 30.
According to the Department of Human Services, Arkansas' Medicaid rolls increased by more than 230,000 during the covid-19 pandemic, and "We expect total enrollment to continue to decline as we reevaluate eligibility and we will report the numbers each month during the process."