HOUSE CONCURRENT RESOLUTION NO. 48

(By Delegates Spencer, Rowe, Seacrist, Hunt,

Staton, Amores and Beane)



Requesting the Joint Committee on Government and Finance to make a study of the economic impact of measures intended to promote economic preservation and provide regulatory relief for small and rural hospitals.

Whereas, The financial condition of some small and rural hospitals in this State over the past several years has, at best, been marginal and consistently deteriorating; and
Whereas, These hospitals provide the economic backbone of rural health care and lead other health care providers in uncompensated and charity care; and
Whereas, The value of these health care providers is significant by providing community access to a range of primary, obstetric, emergency and other health care services as well as employment of over six thousand West Virginia citizens frequently in the most economically deprived areas of the State; and
Whereas, Present state medicaid and managed care reimbursement policies provide substantial financial disincentives to certain not-for-profit small and rural hospitals, discouraging them from continuing to offer obstetric and other needed health care services in rural communities; and
Whereas, Recent independent studies indicate that some small and rural not-for-profit hospitals are operating with financially severe losses, are in a position of probable financial default, and face an increasing risk of closure within the next several years, and the seriousness of this matter is such that even minor changes in reimbursement could quickly wipe out existing cash balances; and
Whereas, Projected changes in reimbursement due to enactment of the federal Balanced Budget Act of 1997, will inevitably result in decreasing availability of federal health care dollars; and
Whereas, Additional projected changes in financing and delivery of health care services by state government may act to disproportionately exacerbate the financial instability of these hospitals, increasing the possibility of closure or reduction of services and employees, hindering future economic development; and
Whereas, An immediate need exists to develop consistent public fiscal and regulatory policy which fosters access to rural health care services for the direct benefit of the citizens of West Virginia; and
Whereas, Access to critically needed health care services in rural areas will be enhanced by development of public policy by this State which:
(1) Encourages stability and adequacy of payments to not-for-profit small and rural hospitals;
(2) Maintains access to essential services in rural communities including emergency and obstetric services;
(3) Recognizes that Mmedicaid disproportionate share payments are vital to the financial survival of not-for-profit small and rural hospitals;
(4) Recognizes the potentially severe net effect that Mmedicare, Mmedicaid and other payor reductions have on these hospitals; and
(5) Identifies and eliminates competing or conflicting policy decisions made by various state agencies affecting small and rural hospitals; therefore, be it
Resolved by the Legislature of West Virginia:
That the Joint Committee on Government and Finance is hereby requested to review, examine and study the preservation of and regulatory relief for small and rural hospitals; and, be it
Further Resolved, That due to the present or projected dire financial condition of certain small and rural hospitals, the Joint Committee on Government and Finance shall meet for the purpose of this study at any time both during sessions of the Legislature and in the interim as often as necessary; and, be it
Further Resolved, That the study mission of the Joint Committee on Government and Finance shall be to:
(1) Make an expedited investigation, study and review of the practices, policies and procedures the state Mmedicaid agency and public employees insurance agency relating to the payment policies and methodologies affecting small and rural hospitals and the financial effect of such policies and methodologies;
(2) Make an expedited investigation, study and review of statutory and regulatory requirements of state agencies including, but not limited to, the Department of Health and Human Resources and the Health Care Authority which unnecessarily add to the cost of or impede access to rural health care within this state and those statutory and regulatory requirements which foster and encourage the provision of rural health services;
(3) Recommend action to encourage and provide regulatory and other incentives to locally reconfigure the manner of delivering rural health care services. In instances in which acute care capacity is reduced, develop proposed statutory or other authority which allows hospitals to utilize excess capacity in a timely manner, omitting bureaucratic overkill, to deliver new or modified health care services which meet community needs while preserving local employment; and
(4) Develop other specific legislative initiatives to create public policy which preserves access to needed health services in rural areas, prevents closure and encourages preservation of not-for-profit small and rural hospitals and maintains an employment base for local communities; and, be it
Further Resolved, That the Joint Committee on Government and Finance report to the regular session of the Legislature, 1999, on its findings, conclusions and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it
Further Resolved, That the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.