Bill to repeal hospital rate regulation advances; causes controversy

CHARLESTON, W.Va. — Members of the Senate Health and Human Resources committee advanced a bill Tuesday afternoon that would stop the State Health Care Authority from regulating hospital rates in West Virginia.

Currently, only Maryland and West Virginia are the only U.S. states that have rate review.

“Just because West Virginia is only one of two states that still has rate review doesn’t mean it’s the right thing to do ecnomically for the state to do away with it,” said Health Care Authority Chairman Jim Pitrolo.

The West Virginia Hospital Association supports getting rid of rate review because the current healthcare model has made it more difficult for hospitals to see a profit.

“When we increase charges for certain services, that doesn’t turn into revenue,” said President and CEO of the WV Hospital Association Joe Letnaunchyn. “Medicare and Medicaid, PEIA, Tri-Care and other services; veterans affairs. We get a paid a non-negotiated rate set by the government.”

If rate review was to be eliminated, citizens and businesses across the state would be paying more for healthcare services, Pitrolo contended.

“I believe that this will cause cost increases; Affordable Care Act (Obamacare) requires them (businesses) to insure (employees),” he said. “You’re looking at millions of dollars of cost increases to citizens and businesses.”

West Virginia has required hospitals to submit requests for price hikes since 1985, but Letnaunchyn said too much has changed since then to continue what in his mind was an outdated process.

“It’s a process that was put in place in the 1980’s, and has really become a barrier for us,” he said. “As we move into the new payment environment with payment bundling, with binding hospital and physician services, we have to bill differently, act differently and operate differently than we did in the 80’s.”

Letnaunchyn further argued that hospital rates are already scrutinized heavily enough without more review from the Healthcare Authority.

“If they charge a four-percent increase and certain rates are a six-percent increase, the community knows that. We just don’t think we should go through the process with the agency where they can tell us what to charge.”

All but two hospitals in the state support repealing rate review. Raleigh General Hospital and Logan General Hospital had doubts about the bill’s effect on insurance contracts, said Letnaunchyn.

The full Senate floor will next address the bill.

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