Okla. Senate panel approves hospital fee extension

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OKLAHOMA CITY (AP) — Legislation that would extend a program that helps reimburse hospitals and other health care providers that provide Medicaid services was approved by a state Senate panel Wednesday.

The Senate Appropriations Committee's Subcommittee on Health and Human Services voted to extend the Supplemental Hospital Offset Payment Program through 2019. The measure now goes to the full Appropriations Committee for consideration.

Approved by the Legislature and signed into law by Gov. Mary Fallin in 2011, the program generates more than $420 million to reimburse hospitals and other health care providers for serving low-income children, seniors and disabled Oklahoma residents.

Its continuation has taken on more importance since Fallin decided to reject expansion of the state's Medicaid program that is allowed under the federal health care overhaul law, said Rep. Doug Cox, R-Grove, author of a similar bill in the House. The program is scheduled to expire in 2014.

"It's critically important now that we're not going to accept the Medicaid expansion," said Cox, an emergency room physician at Integris Grove General Hospital.

A provision of the federal health care law will decrease Medicare payments to the state by about $1.63 billion, money that would have been recovered by expanding Medicaid, Cox said.

"By not taking the Medicaid expansion, we're not going to be able to recoup any of that loss," he said.

Fallin announced in November that Oklahoma would reject the Medicaid expansion, citing the cost to both the state and federal governments. A report from the Kaiser Commission on Medicaid and the Uninsured estimated that expanding Medicaid would cost the state $689 million between 2013 and 2022.

Expanding Medicaid would have extended coverage to an estimated 200,000 low-income Oklahomans.

Supporters of the reimbursement program say that when uninsured and underinsured residents are unable to pay for their health care, the cost of those services are shifted to those who are privately insured. That leads to higher insurance rates for the insured and the private businesses that pay for the insurance.

The reimbursement program authorizes a fee of 2.5 percent on the net revenues of 77 Oklahoma hospitals to be used to draw matching federal Medicaid funds.

The fee generated about $154 million in 2012, money that was used to access an additional $269 million in federal matching funds for Medicaid providers.

About $336 million supports hospitals that provide Medicaid services, while the more than $80 million balance supports other health care providers including doctors, pharmacists and nursing homes.

The Oklahoma Hospital Association estimates that hospitals will be assessed $160 million under the program in 2013. The program helps bring Medicaid hospital payment rates up to the rates paid by Medicare and the amount it generates may vary from year to year.

The program is administered by the state's Medicaid provider, the Oklahoma health Care Authority, and is similar to reimbursement programs operated by many other states.

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