Hospitals that care for a large share of Medicaid, low-income and uninsured patients stand to receive less funding from the federal government after the D.C. Circuit reconsidered how Medicaid disproportionate-share hospital reimbursement is calculated.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed a lower court and reinstated a 2017 rule establishing that payments by Medicare and private insurers are to be included in calculating a hospital’s DSH limit, ultimately lowering its maximum reimbursement.
“By requiring the inclusion of payments by Medicare and private insurers, the 2017 rule ensures that DSH payments will go to hospitals that have been compensated least and are thus most in need,” Henderson wrote.
The case, brought by four children’s hospitals in Minnesota, Virginia and Washington and an association representing eight children’s hospitals in Texas, concerns the calculation of the uncompensated costs of treating Medicaid beneficiaries known as the “Medicaid shortfall.”
For instance, if a hospital spends $1 million on treating Medicaid patients who have no other healthcare coverage and Medicaid pays $600,000, then the Medicaid shortfall is $400,000. In some instances, Medicaid patients have additional third-party coverage such as Medicare or private insurance.
Hospitals cannot receive more money in Medicaid DSH payments than they spent to treat Medicaid beneficiaries or the uninsured. Part of the motivation behind that stipulation was to prevent hospitals from double dipping by collecting DSH payments to cover costs that had already been reimbursed. Previous cases also revealed that some states have made DSH payments to state psychiatric or university hospitals that exceed the net costs, or even total costs, of operating the facilities.
Providers successfully fought the 2017 rule that limited hospitals’ reimbursement. A federal judge sided with the hospitals that claimed the CMS overstepped its authority and essentially ignored payments by commercial insurers and Medicare. That was overturned Tuesday.
The Children’s Hospital Association of Texas said in a statement that it is exploring its options.
“We are disappointed with the result because it will reduce critical Medicaid funding to safety net providers like children’s hospitals,” the association said. “These hospitals are heavily reliant on Medicaid payments because between 50% and 80% of their inpatient days are covered by Medicaid. Children’s hospitals care for all children, and are, in fact, often the only place that children with complex conditions can get life-saving care.”
More than 70% of Virginia hospitals that garnish wages are nonprofit, and the money collected is only a tiny percentage of revenue.
Nonprofit hospitals in Virginia are more likely to garnish patients’ wages if they don’t pay their medical bills than for-profit hospitals in the state, and ultimately, the practice does little to drive revenue for those hospitals, according to a JAMA study published this week.
Researchers examined Virginia court records from 2017 that dealt with completed “warrant in debt” lawsuits, or cases where a party sues an individual for unpaid debt. They examined how hospital characteristics link to wage garnishments, and found that 71% of hospitals in Virginia that garnished wages were nonprofit.
A recent ProPublica report highlighted Methodist Le Bonheur Healthcare, which it said filed more than 8,300 lawsuits from 2014 through 2018. Methodist isn’t alone. The JAMA researchers unearthed more than 20,000 debt lawsuits filed by various Virginia hospitals in 2017; more than 9,300 garnishment cases took place that year, and almost three in four were liked to nonprofits.
Some even sue their own employees. Again looking at Methodist, ProPublica found the hospital has sued more than 70 of its employees for unpaid medical bills since 2014, including a suit brought against a hospital housekeeper in 2017 for $23,000 — $7,000 more than her annual salary.
Methodist responded by pointing out its considerable charity care, with community contributions estimated at more than $226 million annually. The federal government expects nonprofit hospitals to provide charity care and financial assistance since those hospitals are exempt from local, state and federal taxes.
WHAT’S THE IMPACT
Just five hospitals — four of them nonprofit — were responsible for more than half of the garnishment cases in the state, JAMA researchers found. Overall, 48 out of 135 Virginia hospitals garnished patient wages, amounting to 36 percent.
Despite the high prevalence of the practice, the money collected from garnishments comprised a minuscule share of hospital revenue. Hospitals that garnished wages collected annual gross revenue that averaged out to $806 million, while garnishments accounted for $722,342. That’s about 0.1% of gross revenue.
The garnishments, which ranged from $24.80 to $25,000, averaged $2783.15 per patient, researchers found.
According to a report filed by NPR, nonprofit Mary Washington Hospital in Fredericksburg was the hospital that sued the most patients in Virginia in 2017 — so much so that Fredericksburg General District Court reserved a morning each month to hear its cases.
The day after NPR published its report, Mary Washington announced its intention to suspend the practice of suing patients for unpaid bills, saying it was committed to a “complete re-evaluation of our entire payment process.”
The JAMA study found that, of those whose wages were garnished, Walmart, Wells Fargo, Amazon and Lowes were the most common employers.
THE LARGER TREND
Though researchers focused on Virginia, suing patients over medical debt is not a trend that’s unique to the state. Arizona hospitals have gone to court over personal injury claims, and Johns Hopkins Hospital in Baltimore, Maryland, was recently presented with a petition from citizens and unions to drop medical debt lawsuits.
Earlier this year, I shattered my elbow in a freak fall, requiring surgery, plates and screws. While I am a US citizen, several years ago I married an Englishman and became a UK resident, entitled to coverage on the British National Health Service. My NHS surgeon was able to schedule me in for the three-hour surgery less than two weeks after my fall, and my physical therapist saw me weekly after the bone was healed to work on my flexion and extension. Both surgery and rehab were free at the point of use, and the only paperwork I completed was my pre-operative release forms.
Opponents of the public option have funded an analysis that warns more rural hospitals may close if Americans leave commercial plans for Medicare.
With the focus on rural hospitals, the Partnership for America’s Health Care Future brings a sensitive issue for politicians into its fight against a Medicare buy-in. The policy has gone mainstream among Democratic presidential candidates and many Democratic lawmakers.
The estimate assumed Medicaid wouldn’t lose anyone to Medicare, and plotted out various scenarios where up to half of the commercial market would shift to Medicare.
The analysis was commissioned by the Partnership for America’s Health Care Future, a coalition of hospitals, insurers and pharmaceutical companies fighting public option and single-payer proposals.
In their most drastic scenario of commercial insurance losses, co-authors Jeff Goldsmith and Jeff Leibach predict more than 55% of rural hospitals could risk closure, up from 21% who risk closure today according to their previous studies.
Leibach said the analysis was tailored to individual hospitals, accounting for hospitals that wouldn’t see cuts since they don’t have many commercially insured patients.
The spotlight on rural hospitals in the debate on who should pay for healthcare is common these days, particularly as politicians or the executive branch eye policies that could cut hospital or physician pay.
On Wednesday, Sen. Elizabeth Warren (D-Mass.) seemingly acknowledged this when she published her own proposal to raise Medicare rates for rural hospitals as part of her goal to implement single payer, or Medicare for All. She is running for the Democratic nomination for president for the 2020 election.
“Medicare already has special designations available to rural hospitals, but they must be updated to match the reality of rural areas,” Warren said in a post announcing a rural strategy as part of her campaign platform. “I will create a new designation that reimburses rural hospitals at a higher rate, relieves distance requirements and offers flexibility of services by assessing the needs of their communities.”
Warren is a co-sponsor of the Medicare for All legislation by Sen. Bernie Sanders (I-Vt.), who is credited with the party’s leftward shift on the healthcare coverage question. But she is trying to differentiate herself from Sanders, and the criticisms about the potentially drastic pay cuts to hospitals have dogged single-payer debates.
Most experts acknowledge the need for a significant policy overhaul that lets rural hospitals adjust their business models. Those providers tend to have aging and sick patients; high rates of uninsured and public pay patients over those covered by commercial insurance; and fewer patients overall than their urban counterparts.
But lawmakers in Washington aren’t likely to act during this Congress. The major recent changes have mostly been driven by the Trump administration, where officials just last week finalized an overhaul of the Medicare wage index to help rural hospitals.
As political rhetoric around the public option or single payer has gone mainstream this presidential primary season, rural hospitals will likely remain a talking point in the ideas to overhaul or reorganize the U.S.’s $3.3 trillion healthcare industry.
This was in evidence in May, when the House Budget Committee convened a hearing on Medicare for All to investigate some of the fiscal impacts. One Congressional Budget Office official said rural hospitals with mostly Medicaid, Medicare and uninsured patients could actually see a boost in a redistribution of doctor and hospital pay.
But the CBO didn’t analyze specific legislation and offered a vague overview of how a single-payer system might look, rather than giving exact numbers.
The plight of rural hospitals has been used in lobbying tactics throughout this year — in Congress’ fight over how to end surprise medical bills as well as opposition to hospital contracting reforms proposed in the Senate.
And it has worked to some extent. Both House and Senate committees have made concessions to their surprise billing proposals to mollify some lawmakers’ worries.
The U.S. has a gun violence problem and a mental health problem. But conflating the two won’t solve either.
The big picture: The average person suffering from a mental illness is no more prone to violence than anyone without a mental illness, and mental-health advocates say exaggerating a link between mass shootings and mental illness can be stigmatizing and harmful.
Between the lines: “A very small proportion of people with a mental illness are at increased risk of violent behavior if they are not treated,” 2 former CEOs of Mental Health America wrote in Health Affairs in 2013.
Yes, but: Nearly two-thirds of gun deaths are suicides, and “mental illness is a very strong causal factor in suicide,” Duke University’s Jeffrey Swanson said.
Even if Congress did decide to further limit people with mental illness’ access to guns, they’ll quickly run up against the mental health system’s broader shortcomings.
Expanding coverage, lowering healthcare costs, central to Democratic agenda.
Tonight, Joe Biden, Kamala Harris, Cory Booker, Andrew Yang, Julián Castro, Tulsi Gabbard, Michael Bennet, Jay Inslee, Kirsten Gillibrand, Bill de Blasio take the stage for round two of the Democratic presidential debates.
Seven support Medicare for All. The others – Biden, Bennett and Inslee have come out in favor of a public option. Here, in no particular order, is a look at where each candidate stands on healthcare coverage.
As vice president to President Barack Obama, former Senator Joe Biden carries into this election the legacy of the Affordable Care Act. As president, Biden said he would protect the ACA and prevent further Republican attempts to dismantle it.
Unlike many of his Democratic rivals, Biden does not support full Medicare for All. Instead of getting rid of private insurance, Biden said he would build on the ACA through the Biden Plan to create a public health insurance option. As in Medicare, costs would be reduced through negotiating for lower prices from hospitals and other providers.
He also has a plan to increase the value of the ACA tax credits by eliminating the 400% income cap on tax credit eligibility and lowering the limit on the cost of coverage from 9.86% of income to 8.5%. This means that no one would spend more than 8.5% of their income on health insurance. Additionally, Biden would base the size of tax credits on the cost of the higher-tiered gold plan, rather than silver plan.
Biden also supports premium-free access to the public option for individuals in the 14 states that have not expanded Medicaid under the ACA. States that have already expanded Medicaid would have the choice of moving the expansion population to the premium-free public option, as long as the states continue to pay their current share of the cost of covering those individuals.
Biden also promises to stop surprise billing, tackle market concentration, repeal the exception allowing drug companies to avoid negotiating with Medicare over drug prices and limiting the launch price for drugs that face no competition, among other actions.
In his words: “When we passed the Affordable Care Act, I told President Obama it was a big deal – or something to that effect.”
California Senator Kamala Harris often refers to her mother’s diagnosis of colon cancer and her Medicare coverage for treatment as an example of why all Americans should have Medicare for All.
Harris is looking to eliminate premiums and out-of-pocket costs through government insurance that guarantees comprehensive care including dental and vision and coverage. Harris gives no estimate of the cost of universal healthcare, but says taking profit out of America’s healthcare system would save money.
Her Medicare for All plan, which is similar to Senator Bernie Sanders – would cover all medically necessary services, including emergency room visits, doctor visits, vision, dental, hearing aids, mental health and substance use disorder treatment, telehealth and comprehensive reproductive care services. It would allow the Secretary of Health and Human Services to negotiate for lower prescription drug prices.
As former Attorney General of California who won a $320 million settlment from insurers, Harris said she wants to take on Big Pharma and private insurers to lower the cost of prescription drugs.
She also has strong views on prosecuting opioid makers and for preserving women’s right to healthcare and protecting Planned Parenthood from the financial cuts and policies of the Trump Administration.
She would institute an audit of prescription drug costs to ensure pharmaceutical companies are not charging more than other comparable countries, a comprehensive maternal child health program to reduce deaths among women and infants of color, and rural healthcare reforms, such as increasing residency slots for rural areas with workforce shortages and loan forgiveness for rural healthcare professionals.
In her words on the ACA: “As someone who fought tooth and nail as Attorney General and as Senator to prevent repeal, that’s exactly what I will continue to do.”
Senator Cory Anthony Booker, first African-American Senator from New Jersey, and former mayor of Newark, is also a Medicare for All proponent.
He also wants to implement universal paid family and medical leave.
He supports lowering costs for prescription drugs by allowing Medicare to negotiate prices and by importing drugs from Canada and other countries, the latter a policy announced today by Health and Human Services Secretary Alex Azar.
He would also invest in ending the maternal mortality rate and work to reduce racial disparities in maternal mortality rates.
One of his big issues is expanding eligibility for long-term services and support for low and middle-income Americans needing care at home. He wants long-term care workers to be paid a minimum of $15 an hour.To limit the impact of the program on state budgets, the new costs associated with the expansion of Medicaid long-term care services and workforce standards would be financed entirely by the federal government in, effectively, a 100% match. The cost would be financed by making the tax code more progressive by reforming the capital gains, estate, and income taxes.
In his words: “Healthcare is a human right.”
Kirsten Gillebrand, U.S. Senator from New York, originally ran for a House seat in that state on a platform that supported the expansion of Medicare, a view she still holds, and in 2017 expressed support for Senator Bernie Sanders’ Medicare for All bill.
In May, Gillebrand reiterated her support, saying the best way to achieve a single-payer system is to let people buy-in over a transition period of about four to five years. She favors allowing a public option to create competition with insurance companies. Medicare needs to be fixed first so that reimbursement rates better reflect costs, she said.
In 2011 she helped pass the James Zadroga 9/11 Health and Compensation Act, which provides treatment to the first responders of the Sept. 11, 2001 terrorist attacks. The law provides health monitoring and services for 9/11-related health issues among those exposed to the debris and tainted air of the attack’s aftermath.
In her words: “Under the healthcare system we have now, too many insurance companies continue to value their profits more than they value the people they are supposed to be helping.”
Bill de Blasio
New York Mayor Bill de Blasio believes everyone, including undocumented immigrants, has a right to receive healthcare, and has repeatedly voiced his support for a national single-payer health plan.
He and rival Elizabeth Warren raised their hands during the first debate when asked if they supported Medicare for All.
One of his accomplishments as mayor was signing a bill into law that established a paid sick leave and safe leave plan for the city.
First unveiled in January, the program NYC Care, guarantees healthcare for the roughly 600,000 New Yorkers who aren’t currently insured, which de Blasio touted as the “most comprehensive health system in the nation.” He has indicated that NYC Care could become a model nationwide.
The plan encompasses primary and specialty care, pediatric and maternity care and mental health services. The idea is that NYC Care works on what de Blasio said was a “sliding scale,” in which people can essentially pay what they can for care. While the city already has a public option for healthcare, de Blasio said NYC Care will pay for direct comprehensive care for people who can’t afford insurance or who aren’t covered by Medicaid.
The program costs $100 million per year for the city — an investment the mayor expects will yield returns.
In his words: “If we don’t help people get their healthcare, we’re going to pay plenty on the back end when people get really sick,” he said recently on MSNBC’s “Morning Joe” broadcast.
Washington Governor Jay Inslee has planted a flag as “the climate change candidate” and in many ways he’s all in on that single issue, reasoning that things like healthcare policy “become relatively moot if the entire ecosystem collapses on which human life depends.”
That said, he has a strong case to make on healthcare by virtue of having just recently put his state’s money where his fellow candidates’ mouths are: in May he signed the country’s first public option into law in Washington.
Expect him to bring up that accomplishment — in which the state will contract with private insurers to create a public option that pays at Medicare plus 60 percent — in any conversation about healthcare, as he did in the first debate.
In his words: “We hope this will be a smashing success. We hope that it will give a shot of courage to other governors to move forward toward universal access. We were willing to take the leap and we’re gonna learn as we go along, I’m sure, and there will be some modifications. But we had to get started.”
Colorado Senator Michael Bennet supports a public option he calls Medicare-X. But where his plan stands apart from others is a strong focus on the rural-urban divide on access to care. He intends to create a healthcare policy that will ensure that all regions of the country are covered by available health plans, addressing what he calls a failure of the ACA exchanges.
His plan is unusually detailed and includes lowering prescription drug prices, closing existing gaps in care, and, yes, promoting telemedicine and other technology that can bolster rural healthcare. He also has provisions for combatting substance abuse, improving maternal and mental health, and bringing more support to senior caregivers.
In his words: “As president, I would build on the Affordable Care Act to cover everyone, rather than doing away with our current system. My Medicare-X plan gives every family the choice to buy an affordable public option or keep the plan they have today. It starts in rural areas, where there is very little competition and requires the federal government to negotiate drug prices. I have fought for this approach for almost a decade, because it is the most effective and fastest way to cover everyone and drive down costs.”
The former U.S. Secretary of Housing and Urban Development and San Antonio Mayor favors a Medicare for All, single-payer system.
To pay for the system, Castro has said he would raise taxes on corporations and on the wealthiest Americans — the “0.05, 0.5 or 1%,” he said.
While he favors a single-payer system, Castro said he would allow private insurance, saying that anyone who wants their own private insurance plan should be able to have one.
In his words: Castro said at an event in Iowa that, “The U.S. should be the healthiest nation in the world.”
Entrepreneur Andrew Yang of New York is founder of Venture for America, a two-year fellowship program for recent grads who want to work at a startup and create jobs in American cities.
He supports Medicare for All and has called the Affordable Care Act a step in the right direction that didn’t go far enough because access to medicine isn’t guaranteed and the incentives for healthcare providers don’t align with providing quality, efficient care.
Doctors are incentivized to act as factory workers, he has said, churning through patients and prescribing redundant tests, rather than doing what they’d prefer–spending extra time with each patient to ensure overall health.
Medicare for All will increase access to preventive care, bringing overall healthcare costs down. Cost can also be controlled directly by setting prices provided for medical services.
He cites the Cleveland Clinic, where doctors are paid a flat salary instead of by a price-for-service model. Redundant tests are at a minimum, and physician turnover is much lower than at comparable hospitals, he said.
And the Southcentral Foundation which uses a holistic approach to treat native Alaskans with mental and physical problems by referring patients to psychologists during routine physicals.
Also, the current system of employer-sponsored insurance prevents employees from having economic mobility.
In his words: “New technologies – robots, software, artificial intelligence – have already destroyed more than 4 million U.S. jobs, and in the next 5-10 years, they will eliminate millions more.”
Rep. Tulsi Gabbard of Hawaii is a military veteran who supports Medicare for All as a cosponsor of H.R.676, the Expanded & Improved Medicare for All Act.
But she is currently getting press for her lawsuit against Google claiming alleged election interference.
Following the first Democratic primary debate on June 26, many people searched her name, but “without any explanation, Google suspended Tulsi’s Google Ads account,” her office said in a statement, according to The Verge.
Tulsi claims the tech giant suspended her campaign’s Google Ads account just after that first debate.
Congress must act to prevent the tech giant from exerting too much influence, she claimed Monday on “Tucker Carlson Tonight.”
In her words: “This is really about the unchecked power these big tech monopolies have over our public discourse and how this is a real threat to our freedom of speech and to our fair elections.”