Nebraska health care leaders warn rural care at risk without Medicaid rate increase

LINCOLN — Nebraska health care leaders warned Monday that rural health facilities are at risk of closing or cutting services unless lawmakers act to improve Medicaid payment rates, address workforce shortages and reduce red tape.

At a press conference, which included representatives from the Nebraska Hospital Association and Nebraska Rural Health Association, the group proposed several legislative steps in a “Roadmap to Strong Rural Health Care.”

“The goal of the rural roadmap is to provide relief now and to work towards stability and sustainability of our state’s rural health care system into the future,” said Jed Hansen, executive director of the Rural Health Association.

He outlined the importance of health care to rural Nebraska, both economically and in keeping rural populations healthy. On average, he said, 14% of jobs in rural Nebraska are tied to health care and every dollar spent in rural hospitals generates $2.30 of economic activity in the area.

“Beyond the dollars, every mile counts,” he said, adding that the farther people live from services such as emergency care, cancer treatment, maternal and primary care, the higher their mortality rates.

But Jeremy Nordquist, president of the Nebraska Hospital Association, said some five to seven rural hospitals are operating in the red and may be on the brink of closure. Others operate with very thin margins and small amounts of reserves, which can force them to make tough decisions about ending or curtailing services.

Ryan Larsen, CEO of Community Medical Center in Falls City, Nebraska, said his hospital already made the decision to stop providing labor and delivery services and to end services to inmates in the nearby county jail. Other services have been reduced, including the number of skilled care patients.

The Saunders Medical Center in Wahoo has been forced to use revenues from hospital services to subsidize long-term care services, said CEO Julie Rezac. She said she did not know how long that could continue. 

Jim Ulrich, CEO at York General Health Care Services, said hospitals have been struggling with sharply rising costs since the pandemic hit. Surveys by the hospital association have found that labor costs are up more than 20%, supply costs are 15% to 20% higher and drug costs increased more than 35% over the last two years. 

Yet 60% to 80% of rural hospital revenues come from Medicare and Medicaid, he said. Medicare, a federally run program for the elderly and disabled, increased its payment rates by 3.2% this year. Medicaid, a state-federal program for low-income people, increased its rates only 2% this year. 

At the same time, health care providers face workforce shortages that are especially acute in rural areas. Rezac cited projections that Nebraska will be short 5,435 nurses by 2025. She said 73 of Nebraska’s 93 counties have less than the national average ratio of registered nurses to patients, while nine have no registered nurses.

The group said several bills introduced in the Legislature this year would help protect rural health care. Among those is Legislative Bill 128, introduced by State Sen. Myron Dorn of Adams, which would boost Medicaid payments for hospitals by 9.6% in the fiscal year starting July 1 and by 7.7% in the following fiscal year. 

Other bills include: LB 219, introduced by Sen. Teresa Ibach of Sumner, which would increase interim payment rates for certain rural hospitals; LB 149, introduced by Sen. Mike Jacobson of North Platte, which would raise rates for inpatient psychiatric care and rehabilitation services; LB 586, introduced by Sen. Jana Hughes of Seward, which would fund additional clinical training sites for nursing students; and LB 610, introduced by Sen. Loren Lippincott of Central City, which would support career and technical education for high school students.