WV Senate Health and Human Resources Committee Passes SB-574

CHARLESTON, W. Va. — Departments and municipalities that still benefit from health insurance coverage for their employees through the West Virginia Public Employees Insurance Agency (PEIA) could face increased premiums if Senate Bill 574 passes in the 2022 legislative session.

Members of Senate Committee on Health and Human Resources engaged in a heated discussion at Thursday’s meeting on SB 574, which would allow PEIA administrators to negotiate the level of reimbursement to hospitals that provide inpatient care to non-public employed beneficiaries. This would ultimately increase the PEIA reimbursement rates paid to hospitals as part of a “take a bite of the apple” approach to save both hospitals and the PEIA program by West Virginia.

Jason Haught, Acting Executive Director of WV PEIA, was present at the committee meeting to answer questions from members. He was able to explain what this bill would mean for non-state entities if passed.

“We’re not talking about PEIA negotiating with hospitals in general,” Haught said of the bill. “This bill strictly deals with PEIA negotiations in a non-state pool for inpatient rates only, nothing else.” Hospitalization rates are currently not allowed to be negotiated in West Virginiahe added.

Haught said the current reimbursement rate for all state PEIA employees for a hospital stay is close to 60% of Medicare’s level. He prepared a tax memo for the committee, which included a projection of increased claims expenses for the non-state employee pool.


According to the tax memo summary, provided on the West Virginia Legislature’s website, the costs “will not affect the state.” Instead, the costs will be “borne by entities and/or members participating in the non-state plan,” which consists of those employed by counties and municipalities. The projected model shows that if the PEIA reimbursed state hospitals at 125% of Medicare reimbursement levels, instead of the current reimbursement level of 60%, annual claims expenses would increase by $11,478,773.

Haught said there were 14,800 policyholders included in the non-state employee fund with 30,600 members. The PEIA charges each county or municipality a certain fee to be included in the PEIA, and it is up to each county or municipality to determine the amount of contribution by its employees.

Chairman of the committee Michael J. MaroneyA — Marshall, and lead sponsor of the bill, asked Haught if he thought it was fair to say “that the state, through its laws, has subsidized cities and counties on the back of [commercial insurance] suppliers.”

Haught replied that he thought that was a fair statement.

Senator Ron StollingsD-boonadded that he was concerned that an increase in county or municipal rates would be financially detrimental, especially since some counties “cannot pay their jail bills”.

“There is no doubt in my mind that we need to find a real solution and that the hundreds of thousands of people who are paying are reimbursed at a fair rate. But… I’m not sure how big of an impact it will have on the overall picture,” Stollings said. “I just wonder if we’re aiming too low.”

Stollings then attempted to amend the bill to include not only non-state employees, but state employees as well. The amendment was rejected.

Dan LaufferPresident and CEO of Thomas Healthwas also present to answer questions from committee members.

He noted that hospitals face rising costs for supplies and staff. As is often the case, hospital staff will leave the state for larger paychecks elsewhere, creating a staff shortage in hospitals around the world. West Virginia.

“A problem that we have, obviously, if we’re getting less reimbursement, the fact that we’re getting reimbursement below cost, our ability to even recruit people becomes an issue because we can’t compete,” Lauffer said.

He explained that if a person were to be admitted to the hospital for an uncomplicated inpatient procedure, “the revenue generated from commercial insurance is approximately $10 – $12,000 for the hospital. With Medicare, it drops to $4,800and Medicaid is there $3,000 for this treatment. PEIA is less than that. He added that about 80% of care statewide is covered by Medicaid, Medicare or PEIA.

“There are not enough commercial payers in the market for us to cover our costs,” Lauffer continued. “Why can I say this? We filed chapter 11 a few years ago.

Jim Kaufmanpresident of the WV Hospital Associationwhile responding to a question from a committee member, said that at some point in the 1990s providers stopped seeing PEIA members due to low reimbursement issues.

“You can get to a point where individual hospitals start saying, ‘You know what, we can’t take this anymore,'” Kaufman said, discussing provider financial challenges. “I can’t say it was discussed among our board members. However, I wouldn’t be surprised if individual hospitals consider this. »

“I don’t think any provider wants to not serve their community,” he added. “However, you may come to a point financially where you cannot afford it.”

After discussion, where it was noted that this bill, if passed, is only a small step toward saving hospitals and the PEIA, committee members voted to move SB 574 to the max. Senate with the recommendation he passes.

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