Ohio House bill would get quicker payments to hospitals

Local News

COLUMBUS, Ohio (WDTN) – With hospitals struggling financially through the COVID-19 outbreak, a bill introduced before the Ohio Statehouse looks to alleviate some of those revenue pains by making insurance companies, Medicare and Medicaid pay their bills to hospitals quicker.

House Bill 691, which was introduced on June 8, focuses on getting prompt payment to hospitals by streamlining the processes between hospitals, insurance companies, Medicare and Medicaid. The bill’s sponsor, Ohio State Rep. Phil Plummer, said the COVID-19 outbreak forced hospitals to cancel elective procedures for several months, putting a major dent in their revenues. Speeding up payments for services already rendered, Plummer said, would help fill with revenue shortages.

“We want insurance companies to pay their bills to the hospitals,” Plummer told WDTN.com. “According to the Ohio Hospital Association, Ohio hospitals are owed over $10 billion in outstanding payments. We are simply saying, ‘pay your bills.'”

Experts say the healthcare industry runs on thin margins in general, meaning the COVID-19 outbreak is likely to put many hospitals in danger of closing. According to an analysis by the Ohio Hospital Association from 2018, 68 hospitals in the state were below a 2-percent operating margin while 52 hospitals were in the red, operating at or below zero percent.

“Two years later, with the pandemic, we are pretty certain that still stands,” John Palmer of the Ohio Hospital Association said. “They are in danger or financially challenged. It remains to be seen what the outcome will be.”

Palmer said Ohio is currently re-bidding with Medicaid. He said nearly 24 percent of hospital payments come from Medicaid payments, and re-negotiating with the program could get them on a faster track to get paid.

“There’s an opportunity there to look for inefficiencies and improvements,” Palmer said. “I think there’s a lot of good efforts underway.”

Plummer said insurance companies have a lot of leverage in the process already, and getting faster payments shouldn’t take much in concessions.

“The insurance companies control both sides of it,” Plummer said. “They have to approve the procedure before you do it and on the other side they can hold off paying by asking for documentation.”

Plummer said instead of insurance companies requesting more documentation or more information before processing a payment to the hospital, they would make that payment anyway while the hospitals send them the requested documentation.

The bill will also look at getting quicker payments from Medicaid, Medicare and other governmental entities. According to the OHA, Medicaid payments are 24 percent of hospital totals, while Medicare is 33 percent and employer/private insurance is 37 percent. Palmer said those entities make up 94 percent of hospital payments. The other six percent are payments from self-paid individuals, Veterans Affairs and the Bureau of Workers Compensation.

“(This bill) will draw them into the process so they’ll have to pay their bills more promptly as well,” Plummer said.

WDTN.com contacted the Ohio Department of Medicaid and the Ohio Association of Health Plans (OAHP). “OAHP is opposed to HB 691 as we believe it would further increase the cost of health care without improving the quality of health care for anyone,” said Lori Johnston, chair of the OAHP Board of Trustees. “HB 691 reduces health plans’ ability to ensure claims are eligible for payment. If checks and balances on payments and procedures are removed, health costs will skyrocket for everyone. No compelling data or studies have been provided to show the need for the changes proposed in the legislation. We look forward to further discussions on this issue.”

The legislation for House Bill 691 is available on the Ohio Legislature website.

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