Beshear, McConnell release list of 54 Ky. hospitals getting $383 million, 3/4 of it federal, settling their suit over state Medicaid rates

Owensboro Health Regional Hospital got the largest single check.

Gov. Andy Beshear and U.S. Senate Majority Leader Mitch McConnell have released a list of 54 hospitals in Kentucky that will get $383 million in state and federal money from the settlement of 13-year-old dispute about funding from the federal-state Medicaid program.

The settlement with the federal Centers for Medicare and Medicaid Services was negotiated by Democrat Beshear, with from Republican McConnell. It is a timely boon to hospitals, which struggled while the coronavirus pandemic kept them from doing elective procedures.

CMS will pay all but $93.9 million of the settlement, just under one-fourth of it. The three-fourths share approximates the overall federal share of Medicaid spending in Kentucky, a share that increased in 2014 with the expansion of Medicaid.

The administration of Republican Gov. Matt Bevin had budgeted $425 million in state funding to settle the case, Beshear noted in a news release Wednesday. 

“The funding is much-needed relief to our rural hospitals and health care workers that have been on the front lines helping to fight the global pandemic,” Beshear said. “The hard work from our office, along with support from Majority Leader McConnell and federal partners, has resulted in millions of dollars in savings to the state and immediate payment to our rural hospitals. We expect to be issuing checks as early as next week.”

McConnell said in the release, “In the midst of the coronavirus crisis, I’m proud to work with the Trump administration and Gov. Beshear to deliver urgently needed resources. . . . The medical professionals at our rural hospitals have shown their courage and dedication every day throughout this pandemic, and it’s my privilege to thank and support them.”

Not all the hospitals are rural, but the money is likely to mean more to rural hospitals, which are generally less financially stable.

At Pikeville Medical Center, Chief Executive Officer Donovan Blackburn was grateful: “I want to thank Gov. Beshear and Sen. McConnell for bringing a positive resolution to this longstanding issue. The $8,043,076 that our hospital will receive could not come at a better time, and will make a significant difference in our ability to deal with the ongoing pandemic and its financial impact.”

The dispute involved the state's method of setting reimbursement rates for acute-care hospitals in 2007-15. It went to court in 2013, and was pending before the Kentucky Supreme Court. 

"Following a request from the Beshear administration, Sen. McConnell’s office contacted senior officials at CMS and at the U.S. Department of Health and Human Services reiterating the importance of a quick and positive decision for Kentucky’s rural hospitals," the news release said.

The settlement was announced April 3. For a list of hospitals and amounts, click here. The largest single payment, almost $33.7 million, is to Owensboro Health Regional Hospital. St. Joseph Hospital in Lexington got $31.35 million. In Northern Kentucky, St. Elizabeth Medical Center and St. Elizabeth Florence will get $28.76 million and $10.42 million, respectively.