Committee clears bill to exempt Arkansas Surgical Hospital from hospital provider assessment after DHS says no CMS state-plan change needed

Representative Jonathan Acre presented House Bill 15-30 to the committee and introduced Brian Fowler, chief executive officer of Arkansas Surgical Hospital, who asked lawmakers to amend the hospital‑provider assessment program to grant his hospital an exemption.

"This year, that amount is just under $1,300,000," Fowler said of the hospital’s net loss from participation in the provider-assessment program. He told the committee Arkansas Surgical Hospital provides specialty surgical services statewide and is a for‑profit facility that, he said, pays significant state and local taxes but does not recover those costs through the supplemental Medicaid payments the assessment funds.

Fowler and Representative Acre described recent discussions with the Department of Human Services and said DHS and its secretary had assured them that the hospital’s exemption would not require an amendment to the state Medicaid plan and that the hospital’s waiver on file with the Centers for Medicare & Medicaid Services would not be disrupted.

Jodi Ann Tritt, executive vice president of the Arkansas Hospital Association, opposed the bill. Tritt said the provider assessment program was created in 2009 to shore up outpatient and inpatient payments during a period when state general revenue could not be increased, and that the program helps hundreds of hospitals. She warned the committee of federal scrutiny of provider taxes and said adjustments to the program could reduce federal funding. "The fear for us is that CMS ... will lose $400,000,000 in this program so that one hospital cannot pay $1,300,000," Tritt told the committee.

Acre and Fowler said the change would shift a modest shortfall across many participating hospitals instead of one hospital continuing to shoulder the discrepancy.

Committee members asked whether the hospital had been enrolled in the program previously; Fowler said Arkansas Surgical Hospital had participated for years but had not previously sought the exemption. Members also asked how the program calculates the supplemental distributions (based on Medicaid discharges rather than the type of service) and whether increasing Medicaid patient volume would close the gap — witnesses said specialty services tend to produce a larger gap between costs and program returns.

After the testimony, Representative Acre closed and moved the bill for a do-pass vote; the committee approved the motion by voice vote.