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Nearly 60% of Nebraska’s smaller rural hospitals operate at a loss, hospital association says. Pending legislation could help.

By: - January 29, 2024 7:09 pm

(Win McNamee/Getty Images)

LINCOLN — A new survey of Nebraska hospitals showed that about half were operating in the red, and the share was even more dramatic, nearly 60%, for small rural hospitals.

Driving that financial picture, says the Nebraska Hospital Association, which released the survey results, are rising workforce and pharmaceutical costs, along with reimbursement coverage gaps from Medicaid and Medicare.

At risk if the trend continues unaddressed are cuts ranging from patient medical programs to staff support services such as child care, hospital representatives said during a news conference Monday.

Laura Gamble, CEO of Pender Community Hospital, said, for example, her hospital does not make money on the child care center it subsidizes but might have to do without “if we can’t meet our bottom line.” 

Chad Van Cleave, vice president of finance for Columbus Community Hospital, said the gap between costs and federal Medicaid reimbursements has continued.

“The cost shift is real,” he said, adding that it has exacerbated in the last few years.

Nebraska Hospital Association President Jeremy Nordquist (Courtesy of Nebraska Hospital Association)

The association and its members are advocating for the adoption of the Hospital Quality Assurance and Access Assessment Act, currently before the Legislature as Legislative Bill 1087, which could lead to up to $1 billion more in federal funds for Nebraska hospitals, said Jeremy Nordquist, president of the Nebraska Hospitals Association.

The Nebraska Department of Health and Human Services and the Governor’s Office are working with the association to help obtain the higher reimbursement for Medicaid and Medicare patients, said Nordquist. DHHS would have to apply to the federal government to join the program, which has participation from 44 other states, he said.

Nordquist said hospitals are willing to pay an assessment of up to 6% of the hospital’s total revenue to participate. No additional state funds would be required under LB 1087.

The bill, introduced by State Sen. Mike Jacobsen of North Platte, has a public hearing scheduled for Friday.

The hospitals association says that inadequate Medicaid reimbursement, combined with medical inflation, have forced Nebraska hospitals to eliminate or reduce needed services, especially in rural communities. 

Nordquist and representatives of the hospitals say LB 1087 could help stop that loss and lead to improvements.

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Cindy Gonzalez
Cindy Gonzalez

Senior Reporter Cindy Gonzalez, an Omaha native, has more than 35 years of experience, largely at the Omaha World-Herald. Her coverage areas have included business and real estate development; regional reporting; immigration, demographics and diverse communities; and City Hall and local politics.

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