Southwest Nebraska medical center announces plans to close, blames uncertainty over funding

The uncertainty over federal Medicaid funding appears to have claimed its first victim in Nebraska.

Community Hospital in McCook announced Wednesday that it will close Curtis Medical Center in Curtis, winding down its services over the next several months.

"Unfortunately, the current financial environment, driven by anticipated federal budget cuts to Medicaid, has made it impossible for us to continue operating all of our services, many of which have faced significant financial challenges for years," Troy Bruntz, President and CEO of Community Hospital, said in a news release.

The budget reconciliation bill that the House of Representatives voted to approve on Thursday contains several provisions that experts say will slash Medicaid, which rural hospitals are more dependent on than their urban counterparts.

Earlier this week, during a Zoom meeting put on by the multi-state organization United Today Stronger Tomorrow, officials estimated that up to six Nebraska hospitals could be forced to close if the bill passes.

"We currently have six hospitals that that we feel are in a critical financial state, three that are in an impending kind of closure or conversion over to the rural emergency hospital model,” Jed Hansen, executive director for the Nebraska Rural Health Association, said during the meeting. "We would likely see the closures within a year to two years of once [the bill is] fully enacted.”

In a statement Thursday, the Nebraska Hospital Association said 44% of the state's rural hospitals are already losing money, and passage of the bill could lead to a $3.6 billion cut in funding to Nebraska hospitals over the next decade.

“Nebraska hospitals have been clear throughout this debate. This package will undermine health care in our state, hurt patients, and drive-up insurance premiums,” said Jeremy Nordquist, president of the Nebraska Hospital Association. “These changes will impose unprecedented cuts that threaten access to care, essential services, and the economic stability of hospitals across our region.”

“Nebraskans need to be aware that the day is coming when more than 70,000 citizens will lose Medicaid coverage, rural hospitals will be forced to eliminate service and some will close, and individuals and small businesses with commercial insurance will be forced to pay higher premiums to close the funding gap in our health care system,” Nordquist said.

But 1st District Rep. Mike Flood, who, along with Nebraska's other two representatives voted in favor of the bill, said the state will be somewhat insulated from the cuts.

That's because last month, Nebraska officials learned that the federal government had signed off on a plan to boost Medicaid reimbursements to rural hospitals.

Under LB1087, which the Legislature passed last year, the state's hospitals will pay a 6% tax on their net patient revenues to create a fund to get increased federal matching dollars for Medicaid.

Flood said Wednesday in an interview with PBS that the fund will amount to an additional $1 billion for the state's hospitals.

"That's a lot of money for a state with two million people," Flood said. "Now, will there have to be decisions made about how to properly use that money? Do we have to make sure that we don't have waste, fraud and abuse? Yes," he said.

"But we're talking about a system that is not getting shuttered. It is getting an increase. And, sure, somebody in one part of my state can say they have challenges. And I don't doubt that. But there's a lot of different reasons that those challenges come forward."