Kentucky Hospital Association unveils report showing financial struggles of Kentucky hospitals

The Kentucky Hospital Association (KHA) hosted a press conference Friday to unveil a new report Code Blue: Many Kentucky Hospitals Struggling Financially Due to Health System Changes, which claims that the changes in the way hospitals are paid for providing care will result in a loss of almost $7 billion for Kentucky hospitals through 2024.

The new report notes that Kentucky’s rural hospitals have been hit hardest by these changes due to an average of 72 percent of all patients in those hospitals receiving Medicaid or Medicare benefits. This comes after a report from State Auditor Adam Edelen which showed rural hospitals have faced a difficult transition to the new managed-care system, dealt with costly technological advances and new electronic health records requirements, Medicaid expansion, Medicare payment changes and the Affordable Care Act rollout.

The KHA report details that hospitals are being forced to reduce costs to deal with the financial pressures detailed in the Auditor’s report. Many rural hospitals have had no choice but to reduce staff since employee wages and benefits typically make up 60 percent of a hospital’s expenses.

KHA President Mike Rust stated that the report makes a number of recommendations to state government to improve the situation, including:

• Standardizing the criteria used by the five Medicaid managed care organizations to determine medical necessity of health services
• Giving health providers the right to an external appeal of medical necessity service denials that result in reduced or no payments
• Standardizing policies and processes across the five managed care organizations
• Permitting hospital staff to determine which patients presenting to an emergency room have a non-emergency condition
• Strengthening oversight of provider networks

Rust stated that to ensure that hospitals remain economic contributors, policymakers must recognize the issues that hospitals are experiencing. KHA plans on continually surveying hospitals across Kentucky to see how they are doing and putting an emphasis on wellness, such as strong support for smoke free workplace legislation.