Today, Governor Andy Beshear signed House Bill 75 into law.

That begins tonight's legislative update.

House Bill 75 is designed to inject federal funding into Kentucky hospitals by expanding the Medicaid hospital rate improvement program.

The move boost Medicaid payment rates for outpatient procedures performed at hospitals.

State Representative Brandon Reid of Hodgenville sponsored House Bill 75.

He said the bill builds on work that was done in previous legislative sessions.

Governor Beshear said House Bill 75 will help improve health outcomes across Kentucky.

HB 75 is aimed at improving access, access to quality health care for each and every Kentuckian, as well as serving as a lifeline to rural hospitals serving communities throughout our Commonwealth.

With HB 75 now granting access to hospitals to be reimbursed for outpatient services, hospitals will be able to harness federal resources while using no state funds.

This measure simply builds on the legislation we approved in 2019 with Representative Bam Carney in 2021 with HB 183.

And if we want to bring more jobs and good paying jobs across the Commonwealth like we are doing right now, we've got to ensure that we have solid, reliable access to health care in each and every one of those regions.

A press release from the Kentucky House Majority Caucus said 38% of Kentucky's hospital facilities are in jeopardy of shutting down.

House Bill 75, is designed to help.

There was an emergency clause in the legislation, which means the bill will take effect immediately.

The Kentucky Hospital Association says this measure is desperately needed to help keep hospitals afloat.

It comes as rising supply, labor and drug costs as well as workforce challenges are proving difficult for the health care industry.

Our Laura Rogers has more on the support for House Bill 75.

Kentucky hospitals are facing financial challenges.

Last year, 2022 was the worst financial year on record for our hospitals since before COVID.

A report by national consulting firm Kaufman Hall found the median operating margin across the state at -2%.

As expenses outpaced revenue.

38% of Kentucky hospitals are at risk of closure.

For hospitals are struggling now, as all industries are, is just inflation in general.

Two workforce challenges to advancing equipment needs are their replacement and technology that is very demanding and health care.

The Kentucky Hospital Association says amending the hospital rate improvement program will help.

That's very, very much needed and especially will provide needed relief to our rural hospitals.

The program allows hospitals to draw more federal funds so that Medicaid reimbursements are closer to the commercial rate.

And it's really helped us be able to have money to infuse into the hospitals to combat the inflationary pressures we have.

It is previously only included inpatient care, but will now cover outpatient services as well.

This is critical to make sure that our rural hospitals, as well as some of our urban hospitals, are able to sustain the services and the level of services they have right now to serve all Kentuckians, but also the Medicaid patients.

We all know that more care is moving to the outpatient setting as you have technology advances.

So that's going to be very, very critical for them to keep their doors open, to maintain services in their communities.

Equally important to maintaining those services, navigating workforce challenges by offering competitive wages.

We are open 24, seven, seven days a week, whether we see one patient or a thousand at day.

And we have to have the staff.

Medicaid reimbursements don't cover the full cost of care for those patients.

Sherrod hopes that federal funding to make up for that will help ease financial concerns for Kentucky hospitals.

This kind of gives some fuel to get through that because the challenge in hospitals is we can't just raise our rates.

Know we have fixed rates.

Many without this change probably might not have been able to keep their doors open.

And at the end of the day, people need to realize that if hospitals can't have the finances to stay open, you know, that's a loss of access.

For Kentucky Edition.

I'm Laura Rogers.

According to a press release from the Kentucky House Majority Caucus, Medicare and Medicaid represent more than 70% of the coverage for patients and rural hospitals.