Michigan House Speaker Matt Hall (R-Richland Township) announced legislation June 18 that would establish a hospital cost review board and create new health facility consolidation measures. The MHA believes these proposals would severely harm hospitals, jeopardize their financial viability and threaten access to care throughout Michigan.
Hospitals would be subject to the following new requirements from either the new board or other statutory language:
- Hospitals would be required to immediately reduce prices by 10% or would lose nonprofit status.
- Annual hospital price increases would be subject to board approval and would be limited to the rate of inflation or lower.
- No hospital would be allowed to control more than 8% of the statewide bed share, or 3% of statewide market share.
- No hospital would be allowed to control more than 15% of a state prosperity region bed share, or 15% of a state prosperity region market share.
- Mergers and acquisitions would be subject to board approval and would only be allowed to proceed if rates are reduced by at least 2%.
- Mergers and acquisitions would be subject to a new 12% tax on the purchase price.
- All hospital reimbursement would be capped at 200% of Medicare.
- Charges for cash pay patients would be capped at 150% of Medicare.
- The Board would be able to review any data related to budget, cost reports, executive compensation and utilization.
The proposed board would consist of five members, with the governor and each legislative quadrant leader appointing one member.
Many of the proposed requirements would affect healthcare providers across Michigan, including hospitals. The MHA issued a media statement following the speaker’s press conference announcement.
The MHA encourages hospitals, community stakeholders and members to share the MHA action alert and communicate with state lawmakers regarding the potential impact these proposals could have on communities, patients, healthcare workers and access to care. Michigan hospitals have the third-lowest prices relative to Medicare in the country and contribute nearly $11 billion in tax revenue. The financial pressures facing hospitals were underscored June 16 when the 101-year-old nonprofit Sturgis Hospital announced plans to close because of ongoing financial challenges.
Members with questions may contact the MHA advocacy team.