Support for Bill to Save Dozens Of Rural Hospitals

A bill that would would require Medi-Cal to pay the actual costs of providing outpatient services in designated critical access hospitals, saw increased support this week. The result would be a boost for rural hospitals which would no longer lose money on Medi-Cal patients.

Senate Bill 1423, authored by Senator Brian Dahle (R-Bieber), would specifically would have each hospital designated by the department as a critical access hospital, and certified as such by the Secretary of the United States Department of Health and Human Services under the federal Medicare rural hospital flexibility program, to be eligible for supplemental payments for Medi-Cal covered outpatient services rendered to Medi-Cal eligible persons. Existing law conditions those payments on receipt of federal financial participation and an appropriation in the annual Budget Act for the nonfederal share of those payments, with supplemental payments being apportioned among critical access hospitals based on their number of Medi-Cal outpatient visits.

In layman’s terms, it means that rural hospitals that aren’t being reimbursed in full by Medi-Cal for outpatient medical care will, by law, be reimbursed in full via the bill.

Senator Dahle wrote the bill because of 37 rural hospitals in the state in financial distress caused by the Medi-Cal outpatient issue. Specifically, he aims for SB 1423 to also preserve acute care and emergency care for rural residents. Several high profile rural hospital closures or hospitals cutting back on services, such as the recent closure of Madera County’s only emergency hospital, fueled the urgency for the bill. While recent bills giving loans to halt hospital closures have been passed, none of them specifically focus on rural hospitals in the state.

“It’s disheartening to see that rural hospitals face the only options of either declaring bankruptcy or scaling back their services,” said Senator Dahle in a statement on Wednesday. “We cannot continue to ignore the needs of millions of Californians who rely on these critical access hospitals. It’s time for us to do better and ensure that these facilities have the resources they need to provide quality care to those who need it most.”

While the bill has not garnered significant support or opposition just yet, many medical experts are already praising it as a way to save rural hospitals.

“Rural hospitals are critical no matter which state you are in the country,” Bonnie Hines, a hospital accounting consultant, told the Globe. “And hospitals in rural areas, despite being smaller, have a harder time staying afloat. Rural counties don’t exactly have a lot of money or people, so funding and money coming in from patients is going to be way less. Hospitals in California have a bunch of added issues. Having a law to require Medi-Cal to pay for services in full in these rural hospitals is big.”

“And in bills and laws, rural hospitals or clinics or other medical facilities are often ignored. Or, if they are given money, it is very little compared to big city counterparts. And not just in total money. But also proportionately per patient. So a lot of hospital officials in these areas are backing bills like these to help save their hospitals. From what I’ve heard from colleagues in California, rural hospitals are very much in favor of this bill, so yeah, it is becoming more popular.”

SB 1423 is expected to be assigned to legislative Committees soon.