Committee advances bill clarifying pay for 'temporary hospitals' created during COVID-19

The House Insurance & Commerce Committee voted to pass Senate Bill 621, legislation clarifying payment obligations for facilities that were designated as temporary hospitals under the federal “Hospitals Without Walls” program during the COVID-19 emergency.

Sponsor Senator Missy Irvin said the bill responds to a gap in implementation of earlier state law and a prior executive order that allowed ambulatory surgery centers and similar facilities to convert temporarily to hospital status in emergencies. “If they're going to jump through all those hoops ... why would you participate in something that we need if you're not gonna get paid,” Irvin said, summarizing the sponsor’s concern about unpaid provider claims.

David Mans of Arkansas Blue Cross testified that roughly one to two ambulatory surgery centers in Arkansas participated and that the company had negotiated and paid some amounts but disputes remained. Mans told the committee a circuit court judge (Judge Fox, Pulaski County) ruled the facilities were entitled to hospital contracts but that the judge limited the effective contract date to July 28, 2021 and did not award retroactive pay; appeals were completed earlier this year.

Blue Cross described mediation and a court-ordered process that did not result in a full settlement and warned that retroactive payment would raise constitutional and contract issues, citing due-process and ex post facto concerns.

Senator Irvin said the bill is intended to clarify statutory language so that facilities that met federal and state designation requirements would be paid for services rendered under that temporary designation; committee members pressed for details including how many facilities were affected, where they were located, and whether Medicaid (including EBD/self-insured) had been excluded from coverage. Irvin said EBD/self-insured plans and Medicaid had been excluded earlier and that the bill’s fiscal impact did not include Medicaid.

Representative Baker moved to pass the bill; the committee approved the motion by voice vote.

The bill instructs insurers to recognize qualifying temporary-hospital designations and clarifies that payment is due for services provided under that designation going forward and, as discussed, may be applied retroactively to the effective date specified in state law as shaped by the courts. Sponsors said the measure is meant to align the statute with original legislative intent and the federal CMS program that authorized temporary hospital designations.

Opponents raised constitutional and contract concerns; Blue Cross cautioned retroactive awards and pointed to the Pulaski County ruling that limited effective contracts to the 07/28/2021 statutory effective date.