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Seal of the Senate of the State of Texas
Welcome to the official website for the
Texas Senate
February 24, 2023
(512) 463-0300



(AUSTIN) — The industry group that represents rural hospitals says that recent state and federal reforms have stopped the epidemic of hospital closures in rural counties but there still remain pockets of the state without access to healthcare services. Tuesday, the Senate Finance Committee completed its first round of public hearings on the budget with a marathon session of public testimony. Initially scheduled for the week that Austin was closed down due to a severe ice storm, witnesses weren't deterred by the delay as hundreds showed up to offer testimony. Among these was John Henderson, the CEO and president of the Texas Organization of Rural and Community Hospitals, who told members that recent changes to Medicaid reimbursement rates have stopped the rash of hospital closings.

Henderson credited a 2019 bill, SB 170 by Lubbock Senator Charles Perry, that required that rural hospitals be fully reimbursed for services for Medicaid patients after treating these patients at a loss for many years. He said the change in reimbursement policy has been a great help. "We actually haven't had a rural hospital close in Texas in a little more than three years," said Henderson. "Y'all deserve credit for that." He also praised targeted rate increases for in-patient, out-patient, and obstetrical services contained in the 2023 proposed budget, though he did raise the concern that these new rates don't account for inflation and requested an additional $31 million to cover rising costs.

Between 2005 and 2020, 18 rural hospitals in Texas have closed outright and another six have reduced services to outpatient and emergency care only, according to the Rural Hospital Research Program at the University of North Carolina. These closures have left some entire counties without healthcare services, said Senator Robert Nichols of Jacksonville, who was elected to the Senate in 2006. "Since I've been in the Senate, I have lost four rural hospitals," said Nichols, who represents a district that spans much of east Texas to the Louisiana border. "In some cases they have no care in the county, so everybody has to go to the next county."

This isn't a problem that's limited to Texas, as rural counties nationwide have seen hundreds of hospitals reduce services or shut down entirely since 2010. To combat this, the federal government created the Rural Emergency Hospital designation for struggling hospitals, to allow them to switch to emergency-based care only while receiving federal subsidies to help keep them open. While this keeps a level of critical care in the community, it strains nearby hospitals that are still offering full service. "If they go to that status, then the bulk of nursing home care and inpatient care goes to the closest rural hospital and it puts a burden on them without increasing the dollars that they get," said New Braunfels Senator Donna Campbell, who herself is an emergency room doctor by trade. "I'm not sure what the answer is but we need try to make support our rural hospitals in every way possible." Henderson said that three or four hospitals in Texas have already switched over to REH status, the first hospitals in the nation to do so.

Though the immediate crisis may have abated, the loss of two dozen rural hospitals in Texas have left stretches of the state without any nearby non-emergency care. Brenham Senator and Health and Human Services Committee Chair Lois Kolkhorst authored a bill in 2019 that increased reimbursements for deliveries by $500, and asked Henderson how much that was helping hospitals maintain obstetrics services. "That certainly helped and what our members say is that it had a stabilizing but not necessarily a sustaining effect, so we've leveled off the number of rural hospitals that have stopped providing OB services, but there are still some pockets of the state that we refer to as OB deserts where you're still a long way from care when you go into labor. So there's certainly an opportunity there."

The Senate will reconvene Tuesday, February 28 at 11 a.m.

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.