Hospitals, payers to team to reduce costs following Medicaid cuts

While Washington, Iowa and Tennessee battle for continued Medicaid reimbursements for emergency care, Oregon is cutting its Medicaid payments to hospitals by 15 percent this month, according to The Lund Report.

The weak economy made reducing hospital payment rates "unavoidable," Dr. Bruce Goldberg, director of the Oregon Health Authority, said, according to the article. Thanks to the funding cuts, urban hospitals are starting to collaborate with managed care plans to reduce costs and utilization.

For instance, the majority of hospitals in CareOregon's network already have active contracts using the new rate structure. And those not using the new rates are having contract talks with the state's largest insurer.

Oregon Health & Science University is one such hospital that has agreed to the new contract rates from CareOregon, notes The Lund Report. Legacy Health System, meanwhile, entered a new contract arrangement with Tuality Health Alliance.

"I know that hospitals need to stay in business; so do the managed care plans," Goldberg told The Lund Report. "We need to create a climate where the hospitals and the health plans can work together."

Other hospitals facing hefty Medicaid cuts may have to embrace this collaborative climate in order to continue providing care and serving their healthcare communities.

For more information:
- read The Lund Report article