Committee passes bill to phase in minimum hospital reimbursement levels amid insurer and employer concerns

Lawmakers and witnesses spent the bulk of a committee hearing debating HB 1930, a bill that would set a phased-in minimum reimbursement benchmark for commercial insurers to raise average payments to hospitals. Supporters said the measure would help financially distressed hospitals; critics warned it could raise premiums for employers and individuals.

Representative Wardlow, who helped shepherd the legislation, described the bill as a first step to address long-term hospital financing rather than relying on one-time state infusions. The measure creates a ramped minimum reimbursement schedule beginning at 45% of a defined benchmark and increasing over time; witnesses debated how the bill’s language would calculate and apply that benchmark.

Arkansas Blue Cross representatives David Mans and Alicia Barkmeier testified that earlier cost estimates they provided assumed a different interpretation of the bill and that under the current amendment—starting at 45%—the provision might not have a material premium impact in the first years. "If it's at 45% ... it might not have any meaningful revenue impact from the payers," Mans said, noting the company’s earlier figures were based on a different draft.

Randy Zook of the Arkansas State Chamber of Commerce testified the chamber is concerned about large premium increases for private employers and employees, citing figures that private employers could see double-digit percentage boosts. "If enacted, HB 1930 would have broad and costly consequences across the state," Zook said, and he warned smaller employers could drop coverage.

Representatives of QualChoice and other insurers described their own internal estimates. Jack Hopkins of QualChoice said the company’s analysis, using the Grama report and the insurer’s encounter data, showed a possible 30% medical unit cost increase for its plan under the bill’s earlier language.

Hospital leaders from across the state urged passage. Matt Troop, chief executive officer of Conway Regional Health System, said, "The data quite clearly shows that we are the most poorly paid state in the country." Brian Thomas, president and CEO of Jefferson Regional, described persistent operating losses and said hospitals had burned down reserves since the COVID-19 pandemic. Several hospital leaders said surrounding states pay higher rates for comparable services and urged lawmakers to move toward parity.

Committee members pressed insurers on the actuarial basis for their premium-increase estimates and on carve-outs in the bill. Witnesses and legislators noted the bill as amended excludes plans that serve state employees through the Employee Benefits Division (EBD), some marketplace plans and certain trusts; Representative Wardlow explained those carve-outs were intentional to avoid immediate, large impacts on state reserves and to allow a phased approach.

Committee action included an expungement motion to remove a prior amendment vote from the record and a grammatical amendment to clarify the higher-education carve-out. Representative Eubanks moved to expunge one recorded amendment vote and later moved the bill "do pass as amended." The committee approved the bill as amended by voice vote; the transcript records no roll-call tally.

Supporters said HB 1930 is a modest, phased first step to shore up hospital finances; opponents said the bill risks shifting costs to private employers and employees and urged broader solutions. Lawmakers and witnesses repeatedly said additional analysis of average commercial reimbursement rates and insurer actuarial modeling would be needed to estimate premium effects more precisely.