President Trump’s budget cuts target Medicaid, Medicare

https://www.healthcarefinancenews.com/news/president-trumps-budget-cuts-target-medicaid-medicare?mkt_tok=eyJpIjoiWVRnM01UZzNaR0V6TTJFNSIsInQiOiJ6aXpsQnNCRjhHdCs4SnN0UytlZnJVUlZUeFdreEZyQ2V6RWE0YklvYmFMOGJnbWpXT3ZHeG0rOHMwNkJPcE9rMUlGb3NzVkpId3NrZHNkZmR2VlZISXZCVGgrbU94cFV3aVlNR1NYamlhazF1R1kzaXd3RXVISm9OSGJoYmVrVCJ9

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Blueprint includes cuts for care in hospital outpatient departments, teaching hospitals and post-acute care providers, AHA says.

President Trump’s proposed $4.8 trillion budget slashes billions of dollars from Medicaid, food stamps and other safety net programs in an attempt to shrink the federal deficit.

Medicaid and the Affordable Care Act see about $1 trillion in cuts over the next decade, according to The Hill. The budget eliminates the enhanced federal match for Medicaid expansion enrollees. An additional $150 billion is expected to be shaved off of Medicaid from the implementation of work requirements, which is expected to result in people losing their healthcare coverage.

The “President’s health reform vision” to ax the Affordable Care Act takes $844 billion over 10 years from the ACA, the report said.

The decrease in federal spending on Medicare would total about $750 billion over 10 years, but that includes shifting two programs out of the budget. After accounting for those changes, the reduction is just over $500 billion, according to CNN. Much of that cut comes from reducing payments to providers.

The budget needs Congressional approval and is not expected to get past a Democratic-controlled House without changes.

House Speaker Nancy Pelosi tweeted: “The budget is a statement of values. Once again, the #TrumpBudget makes it painfully clear how little the President values the good health, financial security and well-being of America’s hard-working families.”

Ways and Means Committee Chairman Richard E. Neal, D-MA, said, “When I saw the President’s proposed budget today, I felt an immense sense of relief – relief that there is absolutely no chance of his ruthless cuts to critical programs ever becoming law. Slashing billions from Medicare and Medicaid will only make it harder for Americans to access the healthcare they need.

Cutting nutrition assistance and Social Security benefits for the disabled won’t enable people to get back on their feet financially.”

Senator Lamar Alexander, R-Tenn said, “Under the Constitution, it is Congress’ job to set spending priorities and pass appropriations bills, and as a member of the Senate Appropriations Committee, my priorities will continue to be making sure our national defense, national laboratories, the National Institutes of Health and national parks have the resources they need. I am encouraged to see the president is calling to end surprise medical billing.”

The budget adds money to the National Institutes of Health. The NIH will invest $50 million for new research on chronic diseases, using AI and related approaches, according to the White House briefing. It adds $7 billion over 10 years to fight opioid abuse and for mental health in the Medicaid program.

WHY THIS MATTERS

Cuts to Medicare and Medicaid mean uncompensated care to providers, or a reduction in the government payments.

The American Hospital Association said, “The budget request, which is not binding, proposes hundreds of billions of dollars in reductions to Medicare and Medicaid over 10 years.”

AHA President and CEO Rick Pollack said, “Every year, we adapt to a constantly changing environment, but every year, the Administration aims to gut our nation’s healthcare infrastructure. The proposals in this budget would result in hundreds of billions of dollars in cuts that sacrifice the health of seniors, the uninsured and low-income individuals. This includes the one in five Americans who depend on Medicaid, of which 43% of enrollees are children.

“In addition to the hundreds of billions in proposed reductions to Medicare, the blueprint includes cuts we strongly oppose for care in hospital outpatient departments, teaching hospitals and post-acute care providers. These cuts fail to recognize the crucial role hospitals serve for their communities, such as providing 24/7 emergency services. Post-acute cuts threaten care for patients with the most medically complex conditions.”

 

Fifth Circuit Appeals Court Strikes Down the Affordable Care Act’s Individual Mandate

https://www.commonwealthfund.org/blog/2019/fifth-circuit-appeals-court-strikes-down-affordable-care-acts-individual-mandate

The Fallout from Texas v. U.S.:

Yesterday, a three-judge panel from the Fifth Circuit Court of Appeals struck down the Affordable Care Act (ACA)’s individual mandate. The judges agreed with a lower court decision issued in the case, Texas v. U.S., in December 2018 that the individual mandate is unconstitutional but, unlike the lower court, did not decide that the rest of the ACA is also unconstitutional. Instead, the judges remanded, or sent back, the decision to the same lower court judge to consider. California Attorney General Xavier Becerra, who is leading the 21 Democratic state attorneys general defending the law, along with the U.S. House of Representatives, immediately announced he would appeal the decision to the Supreme Court.

Whether the Supreme Court will decide to take the case now or wait for the decision of Judge O’Connor’s, of the lower court, is uncertain. If the Court decides to take the case now, they could expedite the briefing process and issue a decision in 2020. If it does not take the case now, a ruling will be delayed until after the 2020 presidential election.

No one knows how the Supreme Court will ultimately rule. But we do know that if the Court decides to strike down the ACA, the human toll will be immense and tragic. The law has granted unprecedented health security to millions:

  • 18.2 million formerly uninsured people have gained coverage since 2010
  • 53.8 million Americans with preexisting health conditions are now protected
  • 12.7 million low-income people are insured through expanded Medicaid
  • 10.6 million people have coverage through the ACA marketplaces, 9.3 million of whom receive tax credits to help them pay their premiums
  • 5.5 million young adults have gained coverage, many by staying on their parents’ plans
  • 45 million Medicare beneficiaries have much better drug coverage.

Such a decision will also trigger massive disruption throughout the U.S. health system. The health care industry represents nearly 20 percent of the nation’s economy; the ACA has touched every corner of it. The law restructured the individual and small-group health insurance markets, expanded and streamlined the Medicaid program, improved Medicare benefits, and reformed the way Medicare pays doctors, hospitals, and other providers. It was a catalyst for the movement toward value-based care and established a regulatory pathway for biosimilars — less expensive versions of biologic drugs. States have rewritten laws to incorporate the ACA’s provisions. Insurers, hospitals, physicians, and state and local governments have invested billions of dollars in adjusting to these changes.

The law’s popular preexisting health condition protections have made it possible for people with minor-to-serious health problems to apply for coverage in the same way healthier people have always done. These protections have given the estimated 53.8 million Americans with preexisting health conditions the peace of mind that they will never be denied health insurance because of their health.

More than 150 million people who get coverage through their employers now are eligible for free preventive care, and their children can stay on their policies to age 26.

The wide racial and income inequities in health insurance coverage that have been partly remedied by the ACA would return. Hospitals and providers, especially safety-net institutions, would struggle with mounting uncompensated care burdens and sicker and more costly patients who are not receiving the preventive care they need.

The ACA tore down financial barriers to health care for millions, many of whom were uninsured for most of their lives. It has demonstrably helped people get the health care they need in states across the country. Research indicates that Medicaid expansion has led to improved health status and lower mortality risk.

To date, neither the Trump administration, which has sided with the plaintiffs in the case, nor its Republican colleagues in Congress have offered a replacement plan in the event the law is struck down. The historic progress made by Americans, particularly those with middle and lower incomes and people of color, could unravel. Voters are already telling policymakers they are worried about their ability to afford health care. Yesterday’s decision and the uncertain path forward to the Supreme Court is certain to escalate those worries. With the nation entering the 2020 presidential election year, the Supreme Court may decide to take up the case this term.

 

 

Hospital association: Wage index rule positive, but uncompensated care needs work

https://www.crainsnewyork.com/health-pulse/hospital-association-wage-index-rule-positive-uncompensated-care-needs-work?utm_source=health-pulse-tuesday&utm_medium=email&utm_campaign=20190805&utm_content=hero-readmore

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The Centers for Medicare and Medicaid Services on Friday unveiled its final rule on Medicare payment policies for hospitals under the inpatient prospective payment system for fiscal 2020. Though the Greater New York Hospital Association sees modifications to the agency’s proposal to address area wage index disparities as a boon, it’s not pleased with the outcome when it comes to uncompensated care.

“On a positive note, CMS modified its proposal to address wage index disparities between low and high wage index areas and will apply a uniform national budget neutrality factor to all hospitals instead of cutting only high wage area hospitals,” wrote Kenneth Raske, president and CEO of the association, in a letter to members.

The area wage index applies to the reimbursement of hospitals and raises or lowers Medicare payments to account for geographic differences in labor costs.

The final rule is designed to increase the wage index for hospitals with a value below the 25th percentile. Specifically, it will increase those hospitals’ wage indexes by half the difference between the otherwise applicable value for a hospital and the 25th percentile value across all hospitals. And there will be a 5% cap on any decrease in a hospital’s wage index from its final wage index for fiscal 2019 to mitigate significant decreases.

CMS’ previous proposal would have targeted only high wage index hospitals—such as those in New York—to address disparities. The modified provision will cost New York hospitals about $26 million, including fee–for–service and managed-care payments, less than half of what the original proposal would have cost them, a spokesman for the Greater New York Hospital Association said. Nationwide, the proposal will cost about $330 million.

Before the final rule, the New York congressional delegation took issue with the initial proposal to increase the wage index for hospitals that fall in the lowest 25th percentile of wage areas at the expense of hospitals that are above the 75th percentile of wages.

“CMS argues that its proposed changes to the area wage index seek to help rural hospitals, yet not one of New York’s rural hospitals—who face the same fiscal challenges as rural hospitals across the nation—would see a benefit from the policy,” the lawmakers wrote in a letter to CMS administrator Seema Verma. “Rather, states like New York with many hospitals that have legitimately high wages commensurate with market competition will be forced to transfer hundreds of millions in Medicare funding to a small handful of states.”

With the issue of wage index out of the way, state hospitals’ greatest concern may now be the finalized uncompensated care pool proposal. Raske noted the Greater New York Hospital Association has “fiercely opposed” the proposal.

“To mitigate the impact of the data issues and reduce the volatility in the uncompensated care distributions, GNYHA had recommended that CMS continue the fiscal year 2019 policy and base the distribution on a weighted average of low-income days and uncompensated care costs,” Raske wrote. “Instead, CMS finalized its proposal to base the distribution on 100% uncompensated care costs using 2015 data.”

In March the Greater New York Hospital Association called the proposal dangerous and said it would base distributions on bad debt and charity care data and cap the pool’s rate of growth, representing a $98 billion cut over 10 years. —Jennifer Henderson