U.S. Sen. Jerry Moran helps secure billions in Medicaid reimbursements

Stacey Saldanha-Olson |Topeka Capital-Journal

After a year's worth of work at the federal level, Kansas rural hospitals will get more Medicaid reimbursements, which will bring in billions over the next decade.

On June 24, U.S. Sen. Jerry Moran, R-Kansas, announced the Centers for Medicare and Medicaid Services approved Kansas’ application for Critical Access Hospitals and Rural Emergency Hospitals to get "enhanced payments" through the state’s provider assessment program. 

“Rural hospitals across Kansas will now be able to access additional federal dollars through the Medicaid program, helping strengthen our rural providers,” said Moran in a written statement. 

KanCare, the state's Medicaid program, is funded by the state and federal governments. Provider taxes have been part of the state's financing strategy for Medicaid since 2004, when the Health Care Access Improvement Program was created. In Kansas, the tax is imposed on a hospital's net inpatient and outpatient operating revenue.

While the tax is imposed by the state on health care providers, the revenue is ultimately returned to providers through Medicaid payments.

U.S. Sen. Jerry Moran lobbied for Kansas hospitals in Big Beautiful Bill

While the One Big Beautiful Bill Act was developed, Moran negotiated and worked to secure Kansas rural hospitals increased Medicaid reimbursements.

“During the consideration of last year’s Reconciliation Bill, I secured language to make certain Kansas rural hospitals could participate in the state provider assessment program and that the state’s application would remain eligible for consideration and approval," said Moran in a written statement. "This decision by CMS opens the program to more rural hospitals to participate, providing Kansas CAHs and REHs with more than $72 million a year, which will help bolster rural hospital stability in Kansas.”

How much more will Kansas hospitals get in Medicaid reimbursements?

Moran said the effort will generate more than $72 million a year for rural hospitals. Kansas also will get an increase in the Prospective Payment System hospital provider assessment rate. The rate doubled from 3% to 6%, which is expected to generate approximately $1 billion annually for Kansas providers. Those state providers will get increased Medicaid reimbursements over the next decade.

During the 2024 state legislative session, Kansas leaders passed a bill to increase the state provider tax for PPS hospitals, which CMS approved. This allows PPS hospitals to have higher assessment rates, which then allows them and other hospitals to get more federal Medicaid reimbursements.

The move came after a request by the Kansas Department of Health and Environment, which was made at the direction of the Kansas Legislature and Gov. Laura Kelly. While the Big Beautiful Bill capped state provider taxes at 3.5% for Medicaid expansion states, Kansas, a non-expansion state, is not subject to the federal cap.

"With base Medicaid payments falling well below the cost of providing care, this program is vital to helping hospitals both maintain their operations and sustain services such as obstetrics and behavioral health care. Kansas hospitals are grateful for the leadership of Senator Moran who championed this important outcome.”

Holton Community Hospital to reap Medicaid funding benefits

Among those who will receive increased federal reimbursements is Holton Community Hospital.

“We appreciate the efforts of Senator Moran and everyone who helped get the pre-print approved by CMS," Carrie Lutz, Holton Community Hospital CEO, said in a written statement. "For our Critical Access Hospital, this increase in Medicaid reimbursement for services provided is expected to generate just over $1 million in additional annual revenue. These resources will allow us to continue investing in the latest technology, equipment, and critical infrastructure needed to deliver high-quality care close to home.

"Strong rural hospitals are essential to strong rural communities. This approval demonstrates a commitment to preserving healthcare access in Kansas and provides important support that will benefit our patients, employees, and communities for years to come."

Kansas secures more Rural Health Transformation funding than expected

The Beautiful Bill established the Rural Health Transformation Program through CMS, which is a five-year $50 billion fund to provide states with funding to improve rural health care systems. Kansas applied to receive funding and got more than expected.

Kansas applied for $200 million from the fund but was awarded nearly $222 million, which will be administered by the Kansas Department of Health and Environment. Kansas received the sixth-highest award among all 50 states.

The almost $222 million will be put toward implementing the Kansas RHT Program in its first year. In the application, the state outlined a range of programs that it will use to achieve five rural health initiatives:

• Expand primary and secondary prevention programs.
• Secure local access to primary care.
• Build a sustainable rural workforce.
• Enable value-based care.
• Harness data and technology.

Stacey Saldanha-Olson is an enterprise reporter for The Topeka Capital-Journal. She can be reached by email at solson@usatodayco.com. Follow her on X @ssaldanhao.