State Auditor Adam Edelen is conducting a financial stress test of Kentucky’s rural hospitals. He’s hosting a series of public meetings across the state this summer to get a better understanding of the challenges facing small, community hospitals.
"In a state in which 45 percent of people rely on rural hospitals for their hospital care, I think we have a moral and financial obligation to make sure we're doing everything we can to keep rural hospitals open," Edelen told WKU Public Radio.
Hospitals are expressing concerns about the expanding Medicaid rolls under the Affordable Care Act. Also, Kentucky’s transition to Medicaid managed care in 2011 is still presenting problems.
"We're still seeing no pay and slow pay issues that are constricting the cash flow of rural hospitals which is making it more difficult to keep their doors open," added Edelen. "Hospitals have also had to increase their administrative burden and that's something that can push a teetering hospital into bankruptcy."
Edelen cited the Nicholas County Hospital which declared bankruptcy and closed in May, laying off 80 employees.
The Auditor’s office is seeking the financial records of more than 60 hospitals in rural eastern and western Kentucky. Edelen plans to issue a report this fall to the governor and legislature.