W Virginia Hospitals brace for Costs of new Health Care Law

Bloomberg / BusinessWeek

West Virginia hospitals face uncertainty and hefty upfront spending as the federal health care overhaul begins to unfold, the head of their state association told lawmakers Monday.

Joseph Letnaunchyn, president of the hospital group, also warned of short-term drops in government reimbursement payments to hospitals, as scheduled under the new law. The chair of the state Health Care Authority, Sonia Chambers, echoed those concerns during the interim committee meeting Monday.

"It will be difficult for many West Virginia hospitals to sustain those reductions," said Chambers, whose agency regulates health care spending in the state.

But she and Letnaunchyn also sought to strike optimistic tones about the sweeping changes. Chambers cited its attempts to curb hospital readmissions forced by preventable infections. Letnaunchyn noted the more than 100,000 West Virginians who will eventually gain coverage, easing the hospitals' charity care costs.

"I contend that the glass is half-full rather than half-empty," Letnaunchyn told lawmakers. "We're just trying to tell you what the facts are from where we see them. We supported (health care reform) going in."

Those facts, he explained, include the price of required upgrades to health information technology systems. While the aim is long-term savings and improved patient care, some hospitals face devoting 35 to 40 percent of coming capital budgets to meeting that provision, Letnaunchyn said. Available federal funds will help, but only some, he said.

The impact of other provisions will depend on how officials write the rules that will carry them out, Letnaunchyn said. Awaiting those regulations, he said, creates a sense of uncertainty among hospitals that he likened to driving through fog.

Senate Minority Leader Mike Hall, R-Putnam, suggested that the overhaul will increase hospital costs by requiring them to hire additional staff to ensure they follow its many provisions.

"I'm speculating that it will cost millions and millions of dollars," Hall said.

Chambers said hospitals are already reporting information to regulators. But she noted that the overhaul could change. Among other factors, Republicans have vowed to seek the overhaul's repeal if they win control of Congress next month.

"I wouldn't be surprised if some of these provisions change year to year," Chambers said. "We're really going to have to wait and see."