Plan to help hospitals announced

OKLAHOMA CITY (AP) -- Using $42 million in tobacco settlement money to bail out financially ailing rural hospitals was the<br>centerpiece of a program outlined Monday by Gov. Frank Keating.<br><br>Keating

Monday, November 29th 1999, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -- Using $42 million in tobacco settlement money to bail out financially ailing rural hospitals was the
centerpiece of a program outlined Monday by Gov. Frank Keating.

Keating proposed to tap most of the first $66 million full payment from the settlement that the state is expected to receive by April 15.

The Republican governor, who earlier proposed using all of the tobacco money for education-related programs, said there is "a
very urgent crisis that we need to address."

He said the closing of rural hospitals has drastic economic consequences since industry will not locate in areas without good health care. Also, he said, hospitals are typically among the largest employers in rural communities.

Under his plan, the $42.1 million would be used to increase the state reimbursement for Medicaid beneficiaries, a change that would
produce another $101 million in federal matching funds.

Keating called for reducing the allocation out of the tobacco money over five years, when the supplement for hospitals would be funded through the state's General Fund.

He proposed to remove the 12-day-per-year hospitalization limit for rural Medicaid patients and to raise limits on hospital visits and prescription drugs.

The Oklahoma Hospital Association has said 23 rural hospitals are at risk of closing, principally because Medicaid and Medicare
reimbursements are not keeping up with costs.

Oklahoma ranks 49th in the nation for Medicaid reimbursement, officials say.

The financial plight of rural Oklahoma hospitals has grown to the crisis stage, they say, because of limited Medicaid
reimbursement and federal cuts to Medicare.

At a news conference, Keating detailed several proposals designed to help rural Oklahoma, including his estate tax-cut plan,
proposed income tax credits to contractors willing to build homes in non-metropolitan areas and alternative regulation of the
telecommunications industry, which would lead to updated technology in smaller towns and cities.

The governor said a Southwestern Bell plan, tied to deregulation, would greatly enhance rural areas' telecommunication capability.

He also said a right-to-work law would benefit rural communities, noting that most border counties have a per capital income less than residents in counties of neighboring states.