Q: The hospitals have just completed negotiations with insurers. What rate did they agree on?
Jim Reiter: Both sides have agreed on a 2.44 percent rate increase for hospitals, which still must be approved by the Health Services Cost Review Commission. The hospitals initially proposed a 2.97 percent increase and the insurers originally proposed a 1.58 percent increase. That’s higher than the 1.77 increase in the previous fiscal year. The 2.44 percent increase is also higher than the commission’s original recommendation of 1.91 percent.
Q: How did you manage to get insurers to agree on a higher rate increase than the commission recommended?
JM: The proposed rate increase includes a 0.44 percent increase for hospitals to reduce readmissions. If readmissions are reduced, it’s good for both sides. The insurers have less to pay for and it helps hospitals by cutting our costs. And, of course, it helps the patient.
The agreed-upon goal is a 10 percent reduction in readmissions. We think this sort of agreement might be useful for hospitals in other states. However, this agreement still has to be approved by the cost approved commission and the commission has requested extra time to review it. They will review it on July 7, which is technically after the fact. The new rates were supposed to implemented on July 1.
Q: That’s cutting it close.
JM: These negotiations go down to the wire almost every year.
Contact Jim Reiter at jreiter@mhaonline.org.
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