NHHA LEGISLATIVE UPDATE



June 24, 2005

With the Legislature in its final days of the 2005 session, most of its business is concluded with the exception of the full House and Senate’s final votes on the State Budget. Conference Committee negotiations on the state budget were finalized this week.

Hospitals fared well this session with success in the priority areas we identified last fall. We had major victories on medical liability reform, small group insurance reform, prompt pay legislation and Medicaid.


MEDICAID
Early in the legislative session, hospitals faced a $38 million reduction in Medicaid payments. By the end of the budget deliberations, those cuts were scaled back to a reduction in outpatient hospital services of $6.5 million in each year over the next two years. At one time or another over the past four months, budget writers considered eliminating catastrophic payments, medical education payments (indirect and direct), capital payments and reducing outpatient hospital payments. The final budget goes to the full House and Senate next week.

In the end, the Legislature rejected cuts to catastrophic payments ($5 million), indirect medical education ($6 million), direct medical education ($1.7 million), and outpatient hospital payments ($13 million). Capital payments eliminated last year were not reinstated. The final result is a total 2-year reduction in outpatient hospital payments of $13 million. The Senate’s attempt to cap outpatient payments was defeated, along with their effort to allow the DHHS Commissioner to make further cuts without legislative approval. Critical Access Hospitals will be exempt from the reduction.


PROMPT PAY
The Governor has signed Senate Bill 78 - the prompt pay bill that goes into effect September 19, 2005. SB 78 addresses loopholes in the 4-year old law that allows insurers to pend claims with no accountability for the money owed to providers. Insurers will be subject to prompt pay requirements for pended claims as well as well as new claims. SB 78 remedies the burden placed on providers due to the insurers’ different interpretations of a “clean claim”. Finally, interest payments to hospitals on overdue claims will be automatic.
 

SMALL GROUP INSURANCE REFORM
The Governor will soon sign SB 125 - a major victory for hospitals, businesses and Governor Lynch. The bill eliminates medical underwriting and geographic rating for small groups and establishes a reinsurance pool to spread the cost for insuring individuals with catastrophic health issues.


MEDICAL LIABILITY REFORM
We scored a big victory with the passage of SB 214, the pretrial screening bill. Once signed by the Governor, SB 214 will go into effect in 60 days. SB 214 includes three provisions necessary for meaningful reform: that the panels be mandatory, that an appropriate standard of proof be met by the plaintiff, and that unanimous panel findings be admissible at trial. These reforms will encourage quicker settlements thereby lowering legal costs.



Go to http://www.nhha.org/nhha/state_law/bills.php to view the list of bills NHHA will be tracking in 2005.  Additional bills will be added as we become aware of them.