Committee debates Medicaid rate increase for obstetric care; measure amended then fails

The Joint Labor, Health & Social Services Committee considered a bill to raise Medicaid payments for obstetric care and for critical access hospitals but ultimately voted it down on Oct. 16.

The bill (26LSO134) would have raised physician reimbursement for obstetric and gynecologic services to a percentage of the Medicare rate and increased Medicaid cost coverage for critical access hospitals with labor-and-delivery services. The Legislative Service Office (LSO) summary and Medicaid staff said the draft included an appropriation request — about $200,000 general fund and matching federal funds for professional services and about $8.3 million general fund plus matching federal funds targeted to critical access hospital inpatient cost coverage.

Why it mattered

Proponents said the measure would shore up services in rural Wyoming where hospitals have closed labor-and-delivery units and births have declined in many communities. Jacques Beveridge, an OB/GYN who testified for the bill, said the proposal "takes a step in the right direction" and would help retain physicians and the teams that support deliveries. Jesse Springer, interim state Medicaid agent, told the committee that the department had already separated critical-access hospitals that deliver babies into a payment group and that "currently, we're covering 72% of cost at critical access hospitals that deliver babies." He also said the physician side of maternity is generally paid at 100% of Medicare today and that a 5% bump would be a modest incremental increase.

What supporters and analysts said

- Jacques Beveridge, OB/GYN: "I am not sure that the 5% is enough... I would encourage to look more at a higher number." (testimony) - Jesse Springer, interim state Medicaid agent: "We're covering 72% of cost at critical access hospitals that deliver babies." (technical briefing) - LSO summarized the draft: physicians would be reimbursed at a stated percent of Medicare for maternity services and critical access hospitals providing labor and delivery would be reimbursed at 100% of allowable cost under Medicaid; the draft included reporting requirements and biennial appropriations language.

Questions and points of contention

Committee discussion focused on scale and targeting. Medicaid staff warned that increasing payments for larger hospitals or out-of-state deliveries would be far more expensive than focusing on critical access hospitals. Committee members and providers raised malpractice, workforce and volume concerns: smaller hospitals face fixed costs and low delivery volume, which makes sustaining 24/7 obstetric coverage difficult. LSO and Medicaid staff said the state could set a higher percentage but the overall cost would rise proportionally.

Amendments, motion and vote

- Representative Clauston successfully moved an amendment changing a technical payment line to prevent a secondary calculation that would have attempted to pay 105% of billed customary charges; that amendment passed by voice vote. - The bill was moved by Senator Scott and seconded by Representative Yen. After debate, the committee proceeded to a roll-call vote. The recorded tally was 6 in favor and 8 opposed; the bill did not pass.

Outcome and next steps

Because the vote failed, the committee did not send the draft forward as written. Medicaid staff noted the department has undertaken other measures within existing authority (for example carving out and increasing postpartum coverage and creating a special critical-access payment group) and is preparing a CMS rural health transformation application due Nov. 5. Multiple witnesses urged a package of actions — insurance adjustments, liability relief, training/residency support and targeted payment increases — rather than a single fix.

Ending

Committee members said they will continue the conversation in future meetings; the transcript records the bill debate, the appropriation estimates presented by LSO and the 6-8 roll-call outcome.