Nebraska senators Brian Hardin, Mike Jacobson pitch Unicam bills on federal help for rural health care

State senators whose districts include western Nebraska's two largest hospitals asked a Unicameral committee Tuesday to advance their bills meant to protect or improve rural health care providers' precarious profit margins.

Leaders of rural hospitals and health care clinics joined in urging the Banking, Commerce and Insurance Committee to endorse Gering Sen. Brian Hardin's Legislative Bill 168 and North Platte Sen. Mike Jacobson's LB 527.

LB 168, like a similar Hardin bill in 2024, would forbid Medicaid-participating drug makers and their wholesalers from denying or hindering eligible hospitals' and health care providers' access to discounted drugs under a 1992 federal law.

In-person opposition to Hardin's bill was relatively muted during the bill's public hearing Tuesday.

But Jacobson said out-of-state drug manufacturers — accused during the hearing of running an "attack ad" against rural health providers — opposed LB 168 in a letter to the Banking Committee, which he chairs and on which Hardin sits.

Jacobson's own bill seeks to do for independent health care practitioners what his LB 1087, enacted in 2024, intends to do for hospitals: create a revolving pool of matching funds to secure higher federal aid in serving Medicaid patients.

No one opposed LB 527 in person, though one committee member called attention to the Trump administration's aggressive campaign against federal aid programs that at times has seemed to put federal Medicaid funds in its crosshairs.

LB 168

Hardin's bill, which has 11 rural and urban cosponsors, addresses the 340B Drug Pricing Program that Congress enacted to encourage doctors and hospitals to treat low-income and uninsured patients.

Drug manufacturers must sell most drugs at discounts through in-house hospital or community pharmacies exchange for access to Medicare and Medicaid markets, Hardin said in introducing LB 168 to the committee.

But drugmakers in 2020 began throwing up roadblocks to 340B discounts and pharmacies' access to eligible drugs despite the 1992 law, said Hardin and the bill's other supporters.

Some have more recently sought to replace direct discounts with rebate programs, they said, while also requiring health providers to turn over health data on patients using 340B-listed drugs.

Hardin said mostly rural health providers "are losing benefits that help their communities and their patients" while drugmakers are "selfishly pocketing additional billions of dollars each year while hurting the nation's safety net."

He cited Nebraska Hospital Association statistics that 54% of the state's 25-bed-or-less "critical access hospitals" are losing money.

But Hardin noted that Scottsbluff's Regional West Medical Center, which in recent years has been "hanging on by their fingernails," depends on 340B discounts for 6% of its bottom line. Their loss "would be devastating to the 1,100-plus hospital jobs" at Scottsbluff-Gering's largest employer, he said.

Rural health providers and pharmacies accounted for most of the 11 people who testified in favor of Hardin's bill.

Elizabeth Boalshively, a pharmacist at Henderson Health Care Services, said the 13-bed critical access hospital had to stop labor and delivery services after its 340B drug savings fell 37% from 2023 to 2024.

Most of the hospital's savings offsets costs of treating Medicaid patients, she said. It has 340B contracts with Walgreens in York and a Henderson pharmacy, but hospital leaders fear the latter "will be forced to close."

Representatives of Omaha's Boys Town National Research Hospital and OneWorld Community Health Center said the drugmakers' 340B stance hurts their ability to serve urban, low-income Medicaid patients.

OneWorld's "federally qualified health centers" reach outside Omaha to serve 53,000 Nebraskans across 22 counties, CEO Andrew Skolkin testified.

Nebraska Hospital Association President Jeremy Nordquist decried ads running in eastern Nebraska that he said "are from an East Coast organization" tied to the U.S. pharmaceutical industry.

The ads allege that Nebraska hospitals are using funds saved through 340B drug discounts "to fund health care for undocumented immigrants and transgender health care," he said.

No hospital in the state is doing so, but the ad's sponsors are targeting "hundreds of Nebraskans who sit on the boards of their local hospitals" and "implying that they're doing something nefarious with these dollars," he added. "That's ridiculous."

Katelin Lucariello, the Pharmaceutical Research and Manufacturers of America's deputy vice president for state policy, said her group is fighting back against "considerably weak oversight" of how 340B drug savings are being used.

Her testimony opposing LB 168 took aim at "pharmacy benefit managers," which along with "other middlemen" control 79% of all Nebraska pharmacies that supply the discounted drugs under contracts.

Meanwhile, the 340B program has become a "profit generator for large-chain pharmacies" that supply the discounted drugs, she added.

PhRMA recognizes "the unique need of rural health providers," but LB 168 would restrict manufacturers from the ability to impose reasonable conditions" under the federal law, Lucariello said.

Leah Lindahl, the Health Care Distribution Alliance's vice president of state government affairs, said drug wholesalers shouldn't be included in LB 168. They work under contracts with manufacturers, who tell them how to deliver 340B drugs, she said.

LB 527

Jacobson said he modeled his LB 527 on LB 1087's use of a nominal 6% "provider assessment" on hospitals' gross income. Funds raised by last year's law are meant to rotate between hospitals and the state as up to $1 billion a year in extra federal Medicaid funds comes into Nebraska.

Unlike all-federal, senior citizen-focused Medicare, Washington and the states share funding for Medicaid for eligible lower-income Americans.

LB 527, if passed, would charge a 6% assessment on non-Medicare premiums written under a health maintenance organization "certificate of authority."

That would start a parallel cycle of payments and repayments to access more federal Medicaid dollars, this time benefiting providers of "physical health services" outside hospitals in counties with less than 100,000 population.

LB 527's "fiscal note" from the Legislative Fiscal Office estimated that the bill would secure $239.2 million in additional federal Medicaid support in 2026-27.

Rural health care and labor and delivery services would be the target of those new funds, Jacobson said. So would rural providers that operate a "primary care medical home," such as nursing homes.

"We know we have challenges with access to care in Nebraska, especially in rural Nebraska," he said. "We have primary care deserts and maternity care deserts," the latter covering more than half of the state's 93 counties.

Committee member Sen. Merv Riepe of Ralston, a retired hospital administrator, told Jacobson he's "a free-market kind of a guy" who sees even greater dependence on federal Medicaid help "as a road to trouble."

As with LB 1087, "these are dollars we don't have today and these are dollars that are going to help improve the processes and the care that's out there," Jacobson replied.

But Omaha Sen. George Dungan asked Nordquist, the state hospital association president, how Medicaid help from Washington might be disrupted if Trump's White House tries to renew the surprise freeze on federal aid payments it ordered Jan. 27.

"What happens if Medicaid just stops and we implement this program?" Dungan said.

"I would say we're in no worse position than we would be if we didn't receive the funds," Nordquist replied.

So many states rely so deeply on federal Medicaid help, especially in the Southeast, "that Congress could not pull the rug out from these programs without Medicaid across the country collapsing," he added.

But Nordquist, one of seven people testifying in LB 527's favor, noted that the U.S. Center for Medicare and Medicaid Services shut down its payment portal for about 12 hours Jan. 28 after a White House memo the previous night announced the aid freeze.

The White House announced Jan. 29 that its aid-freeze notice had been rescinded. Two federal judges since have blocked the plan's implementation following separate lawsuits.

Trump later announced that he would "love and cherish Medicaid," Nordquist told the Banking Committee.

Jacobson said during LB 527's hearing that Nebraska is still waiting for CMS to give final approval to higher Medicaid hospital reimbursements for Nebraska under LB 1087.