CHARLESTON, W.Va. — The workload for the West Virginia Health Care Authority could be changing.
One bill awaiting action from Governor Earl Ray Tomblin following Saturday’s close of the 2016 Regular Legislative Session would strip some Authority powers, while a second bill could add to the Authority’s responsibilities.
If Tomblin signs SB 68, the three-member Health Care Authority board’s rate review authority for hospitals will end on July 1.
“With this change, the hospitals are free to set whatever rate they’d like and they say it’s going to be that the marketplace is going to take care of it but, actually, competition doesn’t work in health care,” said James Pitrolo, HCA board chair.
In the Mountain State, hospitals must now submit rates annually through the Health Care Authority and, according to Pitrolo, those rates typically rise by anywhere from 2.5 percent to seven percent on average each year.
Health insurance companies then use those rates to negotiate discounted contracts.
Without such rate stability, “I believe it’s going to cause a direct impact on health care premiums. Health insurance premiums will go up,” Pitrolo predicted.
Currently, only Maryland and West Virginia have such rate review authority.
“It’s helped hold down hospital costs over the last several years,” Pitrolo said. “We always have believed that that’s an important protection for the citizens of West Virginia.”
Supporters of the legislation argued that the rate review method, in place since 1985, is outdated.
The final version of SB 597, which was originally introduced as a sweeping overhaul bill for the Health Care Authority, allows for cooperative agreements between teaching hospitals within 20 miles of each other.
The legislation, in the form the state Senate and state House approved Saturday, gives the Health Care Authority decision-making powers regarding reduced competition when such a cooperative agreement involves acquisitions or mergers.
“We’re willing to take on that responsibility. We have the ability to do that,” Pitrolo said, noting that the review process will be similar to the process the Health Care Authority follows when considering certificates of need for hospital projects.
The state attorney general would also have to concur with any approval decisions, if Tomblin signs the bill.
With it, such decisions will have to be reached by evaluating the potential benefits of such a proposed cooperative agreement weighing the following factors: enhancement and preservation of existing academic and clinical educational programs; enhancement of the quality of hospital and hospital-related care, including mental health services; preservation of hospital facilities in geographical proximity to the communities traditionally served by those facilities to ensure access to care; gains in the cost-efficiency of services provided by the hospitals involved; improvements in the utilization of hospital resources and equipment; avoidance of duplication of hospital resources; participation in the state Medicaid program and constraints on increases in the total cost of care.
If it becomes law, the legislation will exempt the proposed merger of Cabell Huntington Hospital and St. Mary’s Medical Center, which is pending, from existing antitrust laws.
In November, the Federal Trade Commission issued a filing opposing the merger because of concerns it could create a monopoly.
As of Tuesday, there were no indications of which way Tomblin could go with either bill.