Delaware hospitals say a clause in a bill to create a board that reviews their budgets threatens the deal to tax them to get more federal Medicaid money. Photo by Anna Shvets/Pexels
If a bill establishing a state board to oversee hospital budgets passes as is, it could alter or kill the deal cut with those hospitals to pay a provider tax unlocking another $100 million for Delaware’s Medicaid program.
Brian Frazee, president of the Delaware Healthcare Association, warned the House Appropriations Committee that the requirement in House Bill 350 to immediately limit hospitals to charging no more than 250% of the Medicare rate for procedures put the Medicaid deal in danger.
Brian Frazee
Enacting that restriction would cause state hospitals to lose $360 million in revenues, he has said repeatedly.
If HB 350 passes, it would cause hospital to overspend the model by $80 million the deal they came up with to get more federal money for Medicaid, Frazee said Thursday morning.
“It would make our model unapproveable because we worked with the sponsor to come up with that,” Frazee said. “That’s the negotiation we had over the last year.”
Frazee said the hospitals had been talking to HB 350 sponsor and Speaker of the House Valerie Longhurst, D-Bear.
Things are moving quickly, he said, with productive conversations leaving the situation in a better place, he said, but he declined to share any specifics.
Dropping the 250% requirement would solve the hospital’s problem in the Medicaid deal, he said.
Hospital assessments
Sen. Sarah McBride, D-Wilmington, the sponsor of Senate Bill 13, which would authorize the hospital revenue assessments that would trigger additional money for Delaware Medicaid, said Thursday she was aware of the talks, but not the specifics, and is prepared to alter her bill to help.
She is not listed as a sponsor on HB 350 but does not see it as competing with her bill in any way.
Sen. Sarah McBride, D-Wilmington
“I believe that health care spending in Delaware is way too high,” McBride said. “We have to adopt policies that address the crisis of health care spending in Delaware.”
That crisis includes the state having to pay healthcare premium increases of 27% of for its own employees, which means the state will need to pump another $39.5 million into its budget just to pay its share of those premium increases.
HB 350 is based on Vermont’s Green Mountain Care Board, which oversees hospital budgets and much more. McBride said she had been in contact with legislators who felt like it was helping to reduce costs.
“I am without question sympathetic to the need to rein in health care spending in Delaware, and this proposal is one that’s been utilized in other states,” she said.
Hundreds of bills are introduced each year, McBride said.
“Our job as legislators is to make sure that the bills that we pass seamlessly interact with one another and both of these bills remain in a fluid legislative process,” she said. “I’m confident that we can ensure that SB 13 is able to be passed in a world where HB 350 passes as well.”
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McBride said she is more than willing to have conversations with all relevant groups and stakeholders about the two bills.
“If we need to update the language and SB 13 to reflect a world where HB 350 has passed, I’m confident we can we can do that, and I’m certainly willing to do that,” she said.
The proposed hospital assessment in SB 143 is set at 3.58% on hospital net revenues to get the $100 million from the feds.
The more the state can show in assessments, McBride said, the more federal money it qualifies for.
“That’s one of the conversations we’re gonna have to have over the course of the next several weeks as 350 makes its way through the legislative process,” she said. “We’re going to have to have a conversation with the hospitals about exactly what this looks like.
“I think it’s premature for me to speculate on what a final formula would look like, what what an amended SB 13 might look like. But I’m confident that there’s a path to yes, that we can maintain the spirit of SB 13 in an environment where HB 350 has passed.”
House Bill 350 has passed two House committees and been sent to the ready list for floor debate.
Senate Bill 13 is assigned to the Finance Committee there.
Betsy Price is a Wilmington freelance writer who has 40 years of experience, including 15 at The News Journal in Delaware.
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