Category Archives: America’s Essential Hospitals

US Supreme Court overturns $1.6B 340B payment cut

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https://www.beckershospitalreview.com/legal-regulatory-issues/supreme-court-overturns-340b-payment-cut.html?utm_medium=email&utm_content=newsletter

The U.S. Supreme Court sided with hospital groups June 15 in a case challenging HHS’ 340B payment cuts. 

The case centered around whether CMS has the authority to make cuts to the program under its  Medicare Outpatient Prospective Payment System. Under the payment rule, HHS cut the reimbursement rate for covered drugs by 28.5 percent in 2018, but it later lowered the reimbursement rate cut to 22.5 percent. 

Under the 340B program, eligible hospitals can buy outpatient drugs at a discount. A hospital typically pays 20 percent to 50 percent below the average sales price for the drugs through the program. 

The Supreme Court reversed a federal appeals court’s 2020 ruling that HHS had the authority to make the $1.6 billion annual reimbursement cut.  

Justice Brett Kavanaugh, writing the opinion for the court’s unanimous decision, said that absent a survey of hospitals’ acquisition costs, HHS may not vary the reimbursement rate for 340B hospitals. 

“HHS’s 2018 and 2019 reimbursement rates for 340B hospitals were therefore contrary to the statute and unlawful,” he wrote. 
The American Hospital Association, Association of American Medical Colleges and America’s Essential Hospitals said in a joint statement emailed to Becker’s following the decision that they look forward to working with HHS and the courts to develop a plan to reimburse 340B hospitals affected by the cuts while ensuring other hospitals are not disadvantaged as they also continue to serve their communities.

House government funding bill gives providers relief on Medicare advance payments

Posted on by • Posted in America's Essential Hospitals, Cash Management, Cash Reserves, Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicare, Medicare Advance Payments, Medicare Disproportionate Share Reimbursement • Leave a comment

https://www.fiercehealthcare.com/hospitals/house-government-funding-bill-gives-providers-relief-medicare-advance-payments?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWTJZek56Z3lNV1E0TW1NMyIsInQiOiJKdUtkZE5DVGphdkNFanpjMHlSMzR4dEE4M29tZ24zek5lM3k3amtUYSt3VTBoMmtMUnpIblRuS2lYUWozZk11UE5cL25sQ1RzbFpzdExcL3JvalBod3Z6U3BZK3FBNjZ1Rk1LQ2pvT3A5Witkc0FmVkJocnVRM0dPbFJHZTlnRGJUIn0%3D

The House passed a short-term government funding bill that extends the deadline for providers to start repaying Medicare advance payment loans to the end of the COVID-19 public health emergency.

The bill that the House passed late Tuesday is a major win for provider groups who worried they could struggle to repay the Medicare loans starting in August. The bill still has to pass through the GOP-controlled Senate.

The continuing resolution, which funds the federal government through Dec. 11, also lowers the interest rate for payments made under the Medicare Accelerated and Advance Payment Program to 4%, down from 10.25%.

The Centers for Medicare & Medicaid Services (CMS) gave out more than $100 billion in advance payments in March to providers slammed by the pandemic. The payments are essentially loans which CMS recoups by garnishing Medicare payments to providers. That process starts 120 days after the first payment was received.

But the bill would give providers one year before Medicare can claim their payments.

It would also give providers 29 months since the first payment to fully repay the loan amount. Currently, CMS gives providers a year to fully repay.

In addition to the changes to the repayment terms, the bill also delays $4 billion in payment cuts to disproportionate share hospitals that were supposed to go into effect as part of the Affordable Care Act. The cuts will now be delayed until December.

The bill earned plaudits from the hospital industry, which has pressed Congress for help as providers are still struggling with the pandemic and could not afford to have Medicare payments become garnished.

“Our hospitals continue to suffer high costs and revenue losses associated with COVID-19, and they welcome the relief this continuing resolution would provide,” said Bruce Siegel, president and CEO of America’s Essential Hospitals, which represents safety net hospitals.

The Federation of American Hospitals said earlier this week before the House vote that the advance payment program is a “vital lifeline to hospitals and healthcare providers during the pandemic that has enabled hospitals and providers to maintain access to critical patient care. But the ongoing pressures of the current crisis required a revision of the repayment terms.”

The bill, which has approval from the White House, now heads to the Senate. The chamber must reach a decision on the legislation to avoid a government shutdown when funding runs out on Sept. 30.

 

 

 

 

CMS kills controversial Medicaid fiscal accountability rule

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Fiscal Accountability Rule, Medicaid Supplemental Payments • Leave a comment

https://www.healthcaredive.com/news/cms-kills-controversial-medicaid-fiscal-accountability-rule/585206/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-09-15%20Healthcare%20Dive%20%5Bissue:29671%5D&utm_term=Healthcare%20Dive

What You Need to Know About the Medicaid Fiscal Accountability Rule (MFAR) | KFF

Dive Brief:

  • CMS is axing its proposed Medicaid Fiscal Accountability Rule, agency head Seema Verma announced via Twitter late Monday afternoon, in a move quickly cheered by provider organizations.
  • The rule proposed last year would have increased federal oversight of how states fund their Medicaid programs and potentially resulted in funding cuts for the cash-strapped safety net insurance. Myriad providers, patient advocacy groups and lawmakers in both states and the halls of Congress opposed the rule as a result.
  • “We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study. Therefore, CMS is withdrawing the rule from the regulatory agenda,” Verma said.

Dive Insight:

MFAR was designed to increase fiscal transparency in the 55-year-old Medicaid program, but was quickly met with a firestorm of controversy, with even bipartisan House and Senate members raising concerns it could lead to states being forced to choose between program cuts or raising taxes to replace the lost funding.

One estimate, conducted by Manatt Health for the American Hospital Association, estimated the changes proposed in the rule would cut Medicaid funding by almost $50 billion annually, shrinking the program by 8%.

“Hospitals and health systems will be greatly relieved when the proposed rule is formally withdrawn,” AHA EVP Tom Nickels said in a statement.

Bruce Siegel, CEO of America’s Essential Hospitals, a lobby representing hospitals serving a disproportionate amount of vulnerable patients, called CMS’ decision “wise and welcome … especially as state budgets and providers strain under the heavy financial burden and economic fallout of COVID-19.”

Medicaid is jointly funded by the states and the federal government. Generally, CMS matches every dollar states spend at rates that vary depending on the state, its covered services and its population. There are no limits for how much federal funding a state can receive, and snowballing spending in Medicaid has resulted in concerns about cost control.

Medicaid spending swelled from $456 billion in 2013 to $576 billion in 2016, per CMS data, mostly due to an expanding federal share.

The most acute worries on the federal side stemmed from supplemental payments, or payments state Medicaid agencies give to providers for going above and beyond routine care, normally for high-need patients or those in underserved areas.

Supplemental payments to healthcare providers have increased from 9.4% of all other payments in 2010 to 17.5% in 2017, according to CMS, and are generally uneven across state lines, contributing to geographic funding disparities.

Oversight agencies, including the Government Accountability Office and the Office of the Inspector General, flagged the growth in payments and called for stronger Medicaid oversight in a series of reports from 2006 to 2015.

As a result, CMS proposed the MFAR rule in November 2019. If finalized, it would require states to report Medicaid payment and financing data at the individual provider level, instead of an aggregate, and establish definitions for “base” and “supplemental” payments. It would also have allowed CMS to sunset existing supplemental payment methodologies after up to three years, requiring states to get approval for a longer period, and close financing loopholes that might allow states to re-use federal Medicaid dollars to fund additional payments.

At the outset, CMS attempted to stamp out criticisms the rule could winnow Medicaid funding. “Alarmist estimates that this rule, if finalized, will suddenly remove billions of dollars from the program and threaten beneficiary access are overblown and without credibility,” Verma wrote in a blog post on the proposal in February.

But the rule received more than 4,000 public comments, most of them negative. The swirling concerns about unintended consequences, especially as COVID-19 exacerbates worries about care access, have now brought CMS back to the drawing board on Medicaid fiscal accountability.

As of late Monday, MFAR remained on the Federal Register.

Other actions from the Trump administration to overhaul Medicaid have faced similar backlash, including unpopular efforts to instill requirements linking coverage to work hours and an early 2020 push to cap federal funding for states in exchange for wider latitude in program administration.

 

 

 

 

Drug payment cuts to 340B hospitals spur debate on best path forward

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Big Pharma, District Court of Appeals, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Medicare, Medicare 340B Drug Discount Program, Out of Pocket Expenses, Pharmaceutical Industry, Safety Net Hospitals, Underinsured, Uninsured • Leave a comment

https://www.healthcarefinancenews.com/news/drug-payment-cuts-340b-hospitals-spur-debate-best-path-forward

340B hospitals breathing easier under Dem-controlled House

Hospitals say revenue from the 340B program is essential, while others contend the original law is being abused.

On August 3, an federal appeals court ruled that 340B hospitals will now be subject to Medicare cuts in outpatient drug payments by nearly 30%, reversing an earlier ruling calling those cuts illegal. The 2-1 decision by the U.S Court of Appeals for the District of Columbia Circuit essentially gives the Trump Administration and the Department of Health and Human Services the legal authority to reduce payment for Medicare Part B drugs to 340B hospitals.

HHS Secretary Alex Azar said the action means patients – particularly those who live in vulnerable areas – will pay less out-of-pocket for drugs in the Medicare Part B program. But providers, including the American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals, said the 340B decision will hurt hospitals and patients in these vulnerable areas.

Hospitals that serve large numbers of Medicaid, Medicare and uninsured patients were getting the drugs for a discounted price, but, getting reimbursed at the higher price, HHS pays all hospitals for Medicare Part B drugs. The hospitals, many of which are in the red or operating on thin margins, were using the pay gap in the price difference to cover operational expenses. HHS deemed it inappropriate that these facilities would use Medicare to subsidize other activities and initiatives, and the appeals court agreed.

As per the original 340B legislation, discounts on drugs can range from 13% to 32% off the average retail price for participating providers, but Medicare Part D sets reimbursement in an entirely different way, leading to the significant reimbursement discrepancies – until the ruling, which furthered HHS’ push to narrow the spread between acquisition price and reimbursement.

THE DEBATE

“The opportunity to exploit this buy/sell differential probably has something to do with the explosive growth there’s been in the number of participating institutions in 340B,” said Michael Abrams, cofounder and managing partner of Numerof and Associates. “According to the data I came across, discounted 340B purchases grew 23% from 2018 to 2019, and currently make up about 8% of the total of the U.S. drug market. So from my perspective this looks like a loophole that’s been used by a small number of large institutions, who in many cases don’t serve that many disadvantaged patients, but nonetheless serve enough to qualify for the 340B program and to purchase the drugs they buy at the discounted rate.”

Groups representing U.S. hospitals would disagree with that assessment, and, in fact, when the appeals court handed its ruling, the AHA, AAMC and America’s Essential Hospitals said 340B hospitals and their patients would “suffer lasting consequences.”

“The decision conflicts with Congress’ clear intent and defers to the government’s inaccurate interpretation of the law, a point that was articulated by the judge who dissented from the opinion,” the groups wrote in a statement. “For more than 25 years, the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services. Hospitals that rely on the savings from the 340B drug pricing program are also on the front-lines of the COVID-19 pandemic, and today’s decision will result in the continued loss of resources at the worst possible time.”

President and CEO of 340B Health Maureen Testoni also lamented the appeals court’s decision, calling the cuts “discriminatory.”

“These cuts of nearly 30% have caused real and lasting pain to safety-net hospitals and the patients they serve,” she said earlier this month. “Keeping these cuts in place will only deepen the damage of forced cutbacks in patient services and cancellations of planned care expansions. These effects will be especially detrimental during a global pandemic.”

Abrams contends that much of the confusion and legal wrangling can be attributed to the vagueness of the original 340B legislation, the stated goal of which was to “enable participating institutions to stretch scarce financial dollars.” With little else to go on in terms of the language, those on each side of the issue were able to interpret it in their own way, with participating institutions saying it’s within the bounds of the law to use that revenue stream to enhance their mission – another phrase that’s open to wide interpretation.

“There’s no question this is being put to uses that were never intended,” said Abrams, adding that the profits generated by the buy/sell differential often disappear into balance sheets with little to no accountability.

Hospitals, for their part, feel they’re under siege by HHS at a critical time for the healthcare system’s financial viability. Even before the COVID-19 pandemic, hospitals saw the migration of lucrative inpatient procedures, such as hip and knee replacements, to freestanding outpatient facilities, which in some cases are not owned by the hospital. That represents a significant loss of revenue. Factor in the lost revenue from cancelled or delayed elective procedures due to the coronavirus, as well as patients who are too cautious to enter the healthcare system, and hospitals are hurting. AHA President and CEO Rick Pollack said in July that half of all U.S. hospitals will likely be in the red by the end of the year.

A COMPLICATED PICTURE

Actions by the pharmaceutical industry are also adding to the complication. A recent statement from America’s Essential Hospitals alleges that recent actions by pharmaceutical manufacturers “hinder access to affordable medications for millions of people who face financial hardships and defy clear statutory requirements that they provide drugs to 340B Drug Pricing Program covered entities.”

The manufacturers have threatened punitive actions – including withholding 340B drugs to contract pharmacies – for failing to comply with reporting requirements that Essential Hospitals call “arbitrary.”

“These data requests have no clear link to program integrity,” the group said. “Rather, they seem to be little more than a fishing expedition.”

A concrete example can be found in AstraZeneca’s decision to refuse 340B pricing to hospitals with on-site pharmacies for any drugs that will be dispensed through contract pharmacies. In a statement this week, Testoni of 340B called this action an “attack” on the 340B program that will hurt healthcare institutions as well as low-income and rural Americans.

“We believe that refusing to offer discounts that the 340B statute requires is a violation of federal law,” said Testoni. “We are calling on Health and Human Services Secretary (Alex) Azar to exercise his authority to stop these overcharges before they cause permanent damage to the healthcare safety net.”

Abrams sides more with the appeals court decision, saying that requiring the pharmaceutical industry to sell drugs at a discount comes with significant regulation to ensure they do so – a stark contrast to the lack of regulation around the resulting revenue. Though another appeal certainly isn’t out of the question, Abrams expects participation in the program to shrink back to a level reflecting the size of the target populations.

“This is about helping disadvantaged patients get their drugs, and that should be the driving activity of the program,” he said. “I’m fine with HHS taking this problem on, because it was an abuse that was never intended in the original legislation. It just seems to me that HHS really wants the healthcare sector to deliver care that is more accountable both for efficient use of resources and outcomes.”

One person who disagrees is Circuit Judge Cornelia Pillard, who wrote the dissenting opinion in the appeals court decision.

“The challenged rules took a major bite out of 340B hospitals’ funding,” she said. “Often operating at substantial losses, 340B hospitals rely on the revenue that Medicare Part B provides in the form of standard drug-reimbursement payments that exceed those hospitals’ acquisition costs. 340B hospitals have used the additional resources to provide critical healthcare services to communities with underserved populations that could not otherwise afford these services.”

 

 

 

 

Cash-Pinched Hospitals Press Congress to Break Virus Fund Logjam

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Cash, Cash Reserves, Chronic Care Management, Chronic Conditions, Chronic Diseases, Coronavirus, Credit Quality, Credit Ratings, Crisis, Crisis Management, Deferred Healthcare, Dept of Health and Human Services (HHS), Economic Crisis, Economic Recovery, Economic Stimulus, Employer-Based Health Insurance, Health Insurance Coverage Adequacy, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Bankruptcy, Hospital Industry, Liquidity, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Out of Pocket Expenses, Preexisting Conditions, Safety Net Hospitals, Safety-Net Providers, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

https://news.bloomberglaw.com/health-law-and-business/cash-pinched-hospitals-press-congress-to-break-virus-fund-logjam

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Hospital groups are pressing Congress to put more money into a relief fund for hospitals and providers, even as labor data showed signs of a turnaround for the health-care industry last month.

Congressional leaders are at a standstill over the next coronavirus-relief package and it could be weeks until lawmakers vote on legislation. Hospital groups have said the $175 billion Congress already approved has been a crucial lifeline to keep hospitals from laying off more staff or potentially closing. Some are worried the money may start to run dry soon.

The coronavirus is prompting many Americans to delay health care, and further funding delays exacerbate the need for assistance, the hospitals warn. Some providers that shed jobs earlier in the pandemic have begun adding them back, but employment levels remain far below where they once were.

“The longer we are in the pandemic the more clear it becomes that this is not going to be a short-term issue,” Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals, said.

Leaders of both parties back more federal funding to help hospitals and doctors’ offices stay in business. Democrats proposed $100 billion for the industry, as hospital groups such as AEH sought, in virus-relief legislation (H.R. 6800) the House passed earlier this year. Republicans included $25 billion in their counterproposal.

The Health and Human Services Department has promised about $115 billion of the $175 billion in relief Congress approved this year to help health-care providers offset their Covid-19-related losses, according to agency data. That leaves the industry with about $60 billion left.

The U.S. exceeded 5 million confirmed Covid-19 cases Aug. 9, according to data from Bloomberg News and Johns Hopkins University, more than any other country. Almost 165,000 people in the U.S. have died from the virus.

Industry Impact

The health-care industry added more than 126,000 jobs in July, according to data released last week by the Bureau of Labor Statistics. Dentist offices and hospitals, the section of the industry that was laying off tens of thousands of people in April and May, accounted for more than 70,000 of those new jobs.

Still, there were 797,000 fewer health-care jobs compared to before the pandemic, according to BLS.

The virus hit parts of the heath-care industry unevenly. Large health systems such as HCA Healthcare Inc. and Universal Health Services Inc. posted better-than-expected profits for the second quarter of 2020.

Some hospitals that didn’t have much cash-on-hand to start the year are struggling with lower profits and may need added relief if the virus continues to keep Americans from seeking care, industry watchers said.

“No hospital is going to come out of this year better than they were in prior years,” Suzie Desai, senior director for S&P Global Rating’s Not-for-Profit Health Care group, said.

The federal relief funds helped buoy hospitals this year, hospital groups argue. The American Hospital Association estimates that without relief funds, hospitals margins would have been down 15% and could be down 11% at the end of 2020 if the virus continues to spread at its current pace.

The AHA estimated losses for the nation’s hospitals and health systems will reach $323 billion this year.

 

 

Rich vs. poor hospitals

Posted on by • Posted in 2020 Election Issues, Access, Access & Quality of Healthcare, Access to Capital, America's Essential Hospitals, Economic Stimulus, Health Policy, Medicaid, Public Health, Quality, Quality of Care, Safety Net Hospitals, Safety-Net Providers, Social Determinants of Health, The CARES Act, Underinsured, Uninsured • Leave a comment

https://www.axios.com/hospitals-coronavirus-inequality-segregation-f10c49eb-5ccc-4739-b2a9-254fd9a3d40e.html

Rich vs. poor hospitals | News Break

The inequalities in American health care extend right into the hospital: Cash-strapped safety-net hospitals treat more people of color, while wealthier facilities treat more white patients.

Why it matters: Safety-net hospitals lack the money, equipment and other resources of their more affluent counterparts, which makes providing critical care more difficult and exacerbates disparities in health outcomes.

The big picture: A majority of patients who go to safety-net hospitals are black or Hispanic; 40% are either on Medicaid or uninsured.

The other side: Wealthy hospitals, including many prominent academic medical centers, are “far less likely to serve or treat black and low-income patients even though those patients may live in their backyards,” said Arrianna Planey, an incoming health policy professor at the University of North Carolina.

  • An investigation by the Boston Globe in 2017 found black people in Boston “are less likely to get care at several of the city’s elite hospitals than if you are white.”
  • The Cleveland Clinic has expanded into a global icon for health care, but rarely cares for those in the black neighborhoods that surround its campus, Dan Diamond of Politico reported in 2017.

Between the lines: The way the federal government is bailing out hospitals for the revenues they’ve lost during coronavirus is exacerbating this inequality. More money is flowing to richer hospitals.

  • For example, the main hospital within University of Colorado Health has gotten $79.3 million from the government’s main “provider relief” fund — about the same amount as Cook County Health, Chicago’s public hospital system, which predominantly treats low-income black and Hispanic people. It has gotten $77.6 million from that pot.
  • The Colorado system, however, is sitting on billions of dollars in cash and investments that Chicago’s safety-net hospitals don’t have. Chicago has also seen a worse coronavirus outbreak.

The bottom line: Poor hospitals that treat minorities have had to rely on GoFundMe pages and beg for ventilators during the pandemic, while richer systems move ahead with new hospital construction plans.

 

 

 

 

Hospitals push for release of $50B more in COVID-19 funds

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Stimulus, Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Vulnerable Populations • Leave a comment

https://www.healthcaredive.com/news/hospitals-push-for-release-of-50b-more-in-covid-19-funds/579072/

COVID-19 Stimulus Bill: What It Means for States

Dive Brief:

  • The American Hospital Association is urging HHS to distribute at least $50 billion more in funding from the $175 billion allocated by Congress to hospitals as providers continue to wrestle with the challenges spurred by the outbreak of the novel coronavirus. 
  • More funds are “urgently needed” for the more than 5,000 hospitals and health systems AHA represents, the group wrote in a letter to HHS Secretary Alex Azar on Tuesday.
  • While AHA is calling for more money for all hospitals, it also wants a special focus paid to hospitals in hot spot areas and those serving a higher number of Medicaid and uninsured patients. 

Dive Insight:

AHA is requesting $10 billion for hot spot areas, $10 billion for hospitals with a larger share of Medicaid and uninsured patients and another $30 billion for all hospitals, including inpatient rehabilitation centers and inpatient psychiatric facilities.

Making substantial funds of money available will help facilities weather the pandemic and will “actually ensure they are able to keep their doors open,” AHA CEO Richard Pollack wrote. The second quarter is expected be the hardest hit to hospital operations.​

On Tuesday, the HHS Office of the Assistant Secretary for Preparedness and Response said it was making available another $225 million for health systems. That’s a drop in the bucket compared to the total federal funds that have already gone out the door. 

So far, the federal government has earmarked a total of $175 billion to disperse to hospitals and providers across the country. Only a portion of those funds have gone out. Initially, HHS sent out $30 billion directed to all eligible hospitals, based on Medicare fee-for-service. The criteria for funding faced criticism over seemingly giving an advantage to certain hospitals over others, such as those with many Medicaid patients.

Other more targeted tranches have followed, including $20 billion based on net patient service revenue. Disbursements of $10 and $12 billion were reserved for rural providers and hot spots, respectively.

AHA’s latest requests seems to acknowledge the concerns others have raised about providers with high Medicaid numbers.

Late last month, America’s Essential Hospitals, which represent safety net hospitals, said the administration should quickly move to dstribute more funding to facilities serving large shares of uninsured and Medicaid members.

“They continue to struggle with the heavy financial costs of this public health emergency and need relief now,” Bruce Siegel, CEO of AEH, said in a statement.

HHS developed funding formulas that rely heavily on a Medicare and net patient service revenue, so facilities that rely more on Medicaid as opposed to private insurers and Medicare, like pediatric hospitals, are at a disadvantage when it comes to receiving funds.

As such, AHA is calling for an additional $20 billion, divided evenly between hot spot hospitals and those with a large share of Medicaid patients.

“These hospitals care for the nation’s most vulnerable patients, who, largely as a result of underlying health conditions, have suffered disproportionately from the pandemic. They have been hospitalized at greater rates, and required more care and resources once hospitalized,” AHA said of hospitals with large shares of Medicaid patients.

 

 

 

Home of the Brave

Posted on by • Posted in 2020 Election Issues, Accountability, Achievement, America's Essential Hospitals, Brave, Bravery, Coronavirus, Cowardice, Credibility, Domestic Terrorism, Essential Businesses, Essential Workers, Ethics, Free Speech, Freedom, Freedom of the Press, Health Policy, Healthcare Providers, Infection Control, Infectious Virus, Judgement, Mission, Mission Critical, Mortality, Nurses, Oath to do no Harm, Pandemic, Partisanship, Personal Protective Equipment (PPE), Physician, Public Debate, Public Discourse, Public Good, Public Safety, Quarantine, Quick Fix, Rational Thinking, Recognition, Safety-Net Providers, Selflessness, Social Distancing • Leave a comment

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CMS pitches ramped up oversight of Medicaid payments, promises block grant guidance

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Block Grants, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.healthcaredive.com/news/cms-pitches-ramped-up-oversight-of-medicaid-payments-promises-block-grant/567135/

Image result for medicaid block grants

UPDATE: Nov. 13, 2019: This brief has been updated to include comments from provider groups.

Dive Brief:

  • CMS proposed a new rule Tuesday that would establish stricter requirements for states to report information on supplemental Medicaid payments to providers in a bid to clamp down on spending and promote transparency.
  • The agency will also soon release guidance on how states can test alternative financing approaches in the safety net program like block grant and per-capita cap proposals for “certain optional adult populations,” CMS Administrator Seema Verma said Tuesday at the National Association of Medicaid Director’s annual conference in Washington, D.C.
  • Later this year, CMS will also issue guidance on how states can promote value-based payments and social determinants of health factors in Medicaid, Verma said. The Center for Medicare and Medicaid Innovation is currently developing several new payment models to push providers to take on more risk for their patient populations in those programs.

Dive Insight:

The moves are in line with sweeping changes from the Trump administration moving more power to the states and asking more from recipients. The CMS administrator teased late last month the agency would soon release new guidance for states to inject flexibility into their Medicaid programs.

“We shouldn’t ration care but instead make how we pay for care more rational,” Verma said Tuesday. “Medicaid must move toward value-based care.”

Speaking to the Medicaid directors Tuesday, Verma said the changes are aimed preserving Medicaid for future generations.

“Going forward there will be no new [State Innovation Model] grants, no more open-ended one-off district waivers,” she said. “We must move forward with a more unified, cohesive approach across payers, across CMS, across states.”

The proposed rule, called Medicaid Fiscal Accountability (MFAR), will add more scrutiny to supplemental payments, which are Medicaid payments to providers in addition to medical services rendered to Medicaid beneficiaries, such as payments supporting quality initiatives or bolstering rural or safety net providers.

Some states rely heavily on these additional payments to offset low Medicaid reimbursement or support struggling hospitals. Provider lobbies did not take kindly to the new rule.

“We share the government’s desire to protect patients and taxpayers with transparency in federal programs, but today’s proposal oversteps this goal with deeply damaging policies that would harm the healthcare safety net and erode state flexibility,” Beth Fledpush, SVP of policy and advocacy for America’s Essential Hospitals, said in a statement.

AEH, which includes more than 300 member hospital and health systems, many of which are safety net providers, asked CMS to withdraw the proposal. The American Hospital Association told Healthcare Dive it was still reviewing the rule and declined comment.

However, government oversight agencies like the Government Accountability Office and the Office of Inspector General have recommended changes to these payments, which have increased from 9.4% of Medicaid payments in 2010 to 17.5% in 2017, according to CMS.

MFAR would also propose new definitions for “base” and “supplemental” payments in order to better enforce statutory requirements around and eliminate vulnerabilities in program spending.

Verma has long teased CMS support of block grants, an idea popular with conservatives, but Tuesday’s speech solidifies the agency’s support of such proposals. A handful of red states have been mulling over capped spending to gain more clarity around budgets.

In September, Tennessee unveiled its plan to move to a block grant system that would set a floor for federal contributions adjusted on a per capita basis if enrollment grows. Any savings would be shared between the state and the government.

Tennessee must submit a formal application to CMS to later than Nov. 20. If approved, it would become the first state to use a block grant funding mechanism in Medicaid. Additionally, Utah submitted a waiver application seeking per-capita Medicaid caps in June; Oklahoma Gov. Kevin Stitt, a Republican, is reportedly considering such a program; and Alaska and Texas have both commissioned block grant studies.

 

 

 

House committee to discuss DSH cut repeal next week

Posted on by • Posted in America's Essential Hospitals, American Hospital Association (AHA), Health Policy, Health System, High Deductible Health Plans, Hospital, Medicaid, Medicaid Disproportionate Share Reimbursement (DSH), Medicaid Upper Payment Limit, MedPAC, Short Term Health Insurance, Skinny Health Plans • Tagged • Leave a comment

https://www.modernhealthcare.com/government/house-committee-discuss-dsh-cut-repeal-next-week?utm_source=modern-healthcare-daily-dose-thursday&utm_medium=email&utm_campaign=20190530&utm_content=article1-readmore

The House Energy and Commerce Committee next week will consider a full repeal of the Medicaid disproportionate share hospital cuts, a sign that hospitals are getting closer to securing the top lobbying priority for safety net providers and academic medical centers.

The committee will hold a hearing next Tuesday on proposed legislation from Rep. Eliot Engel (D-N.Y.), whose home state gets the single largest so-called Medicaid DSH allotment in the country. In fiscal 2018, New York received $1.8 billion of the roughly $12 billion in annual federal payments.

Engel has pitched a full repeal of the cuts mandated by the Affordable Care Act, which are set to take effect Oct. 1. Should those cuts move forward, they would reduce federal DSH payments to states by $4 billion in fiscal 2020 and $8 billion in fiscal 2021. An aide to Engel said that a full repeal “provides the long-term solution.”

Medicaid DSH is the second-largest federal program to boost hospital Medicaid funding, representing about $12 billion in federal spending annually. It has been the subject of a political fight over proposed reforms to the program.

Last week, 300 of the 435 U.S. House of Representatives lawmakers sent a letter to the chamber’s leadership urging a two-year delay to the DSH cuts, and hinted that some in Congress believe the Medicaid DSH formulas need to be reconfigured, calling for a “sustainable, permanent” solution.

“This delay will ensure that hospitals can continue to care for the most vulnerable in our communities,” the lawmakers wrote, led by Engel and Rep. Pete Olson (R-Texas).

The amount the federal government pays out for DSH varies enormously across states and is mostly arbitrary, reflecting the caps set by Congress in 1992 instead of a relevant benchmark.

Florida, where about 3.3 million people are uninsured, gets the exact same federal DSH allotment as Connecticut, where about 245,000 people are uninsured.

Finance Committee Chair Chuck Grassley (R-Iowa) has said he wants to see a reset. Sen. Marco Rubio (R-Fla.), whose state has a strong vested interest in a formula change, has used the Sept. 30 deadline to push a proposal that would base the federal dollar allotment on a particular state’s share of U.S. citizens living below the poverty level.

But the major trade groups representing DSH hospitals continue to push for a simple delay, since their constituents include hospitals in all the states. Dr. Bruce Siegel, CEO of America’s Essential Hospitals, said at a briefing to House staff earlier this month that he’d be open to a formula change as long as hospitals don’t see cuts to existing funding. That means Congress would have to allocate even more money to the program.

House Speaker Nancy Pelosi (D-Calif.) said she backed another delay when she addressed American Hospital Association’s annual meeting in April. She noted that she wouldn’t back a program overhaul.

“We cannot support efforts that will reward states for not expanding Medicaid or simply take DSH money from some other state and give it to others,” she said. “Who thought that was a good idea?”

The DSH debate doesn’t fall along the lines of which states expanded Medicaid or not. Alabama and Missouri haven’t expanded Medicaid but receive high federal DSH allotments, and would likely lose money if Congress decided to redistribute the existing payments.

Although the policy rationale behind the ACA-mandated cuts was that Medicaid expansion would shrink hospitals’ need for DSH money, high-DSH expansion states such as New York and New Jersey aren’t giving an inch.

Siegel framed the debate over expansion states’ need as being “a little more complicated now” than in the early years of the ACA.

“I think the market has changed in the last eight years or nine years when we started down the road of Medicaid expansion,” he said at the Capitol Hill staff briefing.

He pointed to the slight rise in the uninsured rate recently, as well as the increase of high-deductible plans that put more fiscal burden on enrollees.

“We are frankly concerned about any moves to move us toward skinny health plans,” he added.

Enrollment in more bare-bones commercial plans doesn’t really affect the Medicaid enrollment, but he argued that expansion still brings Medicaid shortfall — which is the difference between Medicaid and Medicare reimbursement.

“If you have 70% Medicaid patients which some of our hospitals do, you are in a terrible disadvantage in terms of payment streams, with the shortfall becoming enormous for you,” he said.

There is another Medicaid program that can help hospitals with shortfall: the “upper payment limit” supplement for Medicaid fee-for-service. States can deploy UPL payments to hospitals in order to increase their reimbursement based on rates Medicare would have paid for the same treatment.

UPL is the largest Medicaid supplemental funding program, with about $13 billion in annual spending according to the Medicaid and CHIP Payment and Access Commission data from fiscal 2017.

The UPL program is also under scrutiny by MACPAC, whose analysts found that 17 states have overspent billions of these payments.