SENATE BILL REPORT

SB 6132

BYSenators Deccio and Johnson

Requiring that department of social and health services fully cover the cost of services provided under medical assistance programs by hospitals.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):January 12, 1988

Senate Staff:Scott Plack (786-7409)

AS OF JANUARY 13, 1988

BACKGROUND:

The state medical assistance programs reimburse rural hospitals for patient care based on a prospective payment system.  The result is a level of payment that is often less than the actual cost of providing care to these patients. 

According to DSHS, reimbursement currently averages between 80 percent and 85 percent of actual costs for the state Medicaid program and between 38 percent and 40 percent for the other state medical assistance programs.  State medical assistance programs account for an average of 11 percent of total hospital revenues.

The current prospective payment system creates financial burdens for some rural hospitals and has contributed to the overall financial instability of the rural hospital system.

SUMMARY:

DSHS is required to pay rural hospitals for actual costs associated with providing care to state medical assistance patients.  Actual costs are determined from the federal Health Care Financing Administration Medicare Cost Reports.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 8, 1988