Tag Archives: Medicaid Expansion

No, Trump Hasn’t ‘Essentially Repealed Obamacare’

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https://www.politico.com/magazine/story/2017/12/20/trump-obamacare-mandate-repeal-taxes-216125

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Killing the mandate doesn’t gut the health care law. Most likely, it will muddle along, because the rest of it is broadly popular.

In July and again in September, Republicans narrowly failed to repeal the Affordable Care Act. But their newly passed tax legislation included a provision getting rid of Obamacare’s mandate requiring Americans to buy insurance, and President Donald Trump immediately declared victory in the partisan health care wars. “When the individual mandate is being repealed, that means Obamacare is being repealed,” he crowed at a Cabinet meeting on Wednesday. “We have essentially repealed Obamacare.”

Well, no. The individual mandate is only part of Obamacare. It wasn’t even included in the original health care plan that Barack Obama unveiled during the 2008 campaign. The mandate did become an important element of Obamacare, and the only specific element that a majority of the public opposed. But the more generous elements of the program—like a major expansion of Medicaid, significant government subsidies for private insurance premiums, and strict protections for pre-existing conditions—are still popular, and still the law of the land.

“The death of Obamacare has been exaggerated,” says Larry Levitt, who oversees health reform studies at the Kaiser Family Foundation. “Eliminating the mandate creates uncertainty, but all the benefits for people remain in place.”

The Republican ecstasy and Democratic gloom over the death of the mandate reflects the most consistent misperception over the seven-plus years of Affordable Care Act debates, the incorrect assumption that the “Obamacare exchanges,” where Americans can buy private insurance, are synonymous with Obamacare. The vast majority of Americans who get their coverage through Medicare, Medicaid or their employers shouldn’t be affected. Yes, killing the mandate could cause problems for the remaining 6 percent of Americans who have to buy insurance on the open market, but nearly half will remain eligible for subsidies that would insulate them from any premium hikes.

Repealing the tax penalties for Americans who don’t buy insurance would not repeal Obamacare’s perks for Americans who do—like the ban on annual and lifetime caps that insurers previously used to cut off coverage for their sickest customers, or the provision allowing parents to keep their children on their plans until they turn 26. And it would not repeal Obamacare’s “delivery reforms” that are quietly transforming the financial incentives in the medical system, gradually shifting reimbursements to reward the quality rather than quantity of care. The growth of U.S. health care costs has slowed dramatically since the launch of Obamacare, and the elimination of the mandate should not significantly affect that trend.

In fact, during the 2008 campaign, Obama was the only Democratic candidate whose health plan did not include a mandate, because he was the only Democratic candidate who thought the main problem with health care was its cost. “It’s just too expensive,” he explained at an Iowa event in May 2007. Insurance premiums had almost doubled during the George W. Bush era, and Obama believed that was the reason so many Americans were uninsured. He doubted it would be worth the political heartburn to try to force people to buy insurance they couldn’t afford.

But Obama eventually embraced the argument that a mandate was necessary to ensure that young and healthy Americans bought insurance. The fear was that otherwise, insurance markets dominated by the old and sick (who would enjoy the law’s new protections for pre-existing conditions) would have produced even higher premiums, and might scare insurers away from serving Americans who don’t get coverage through their jobs or the government. Killing the mandate will be a step in that direction, boosting Trump’s heighten-the-contradictions effort to sabotage the functioning of Obamacare to build support for a more sweeping repeal.

That effort has already produced some damaging results for the exchanges. Insurers have increased their premiums for 2018, repeatedly citing uncertainty over Trump’s efforts to blow up Obamacare as well as his decision to cut off promised payments to insurers who cover lower-income families. Several insurers left the exchanges even before the elimination of the mandate, and others could follow.

But the widespread warnings that wide swaths of America would have no insurers on the exchanges were wrong; there are zero “bare counties” with no insurers for 2018. And a Kaiser review found the exchanges have gotten more profitable for insurers this year,despite Trump’s efforts to damage them. This year’s enrollment period appears to have gone fairly well even though the Trump administration shortened it by half and slashed its promotional budget.

The fear is that eliminating the mandate could produce a “death spiral” for the exchanges, where higher premiums scare away healthier customers, leading to even higher premiums and even sicker customers—until eventually,the insurers decide to bail. It could also encourage insurers to try to lure healthier customers with cheaper but skimpier plans that don’t provide protections for pre-existing conditions, since those customers would no longer have to pay a tax penalty.

But it is also possible that younger and healthier customers who initially bought insurance because they were required to do so will now buy insurance because they want to; surveys show that more than 75 five percent of Americans covered on the exchanges are happy with their coverage. And as a political matter, repealing the unpopular mandate could make it even harder for Republicans to pass legislation repealing insurance protections, Medicaid expansions and the rest of Obamacare, because the rest of Obamacare is popular. It’s not surprising that Republicans managed to kill the law’s vegetables, but it won’t be as easy to kill dessert.

Trump thinks congressional Democrats will soon be begging him to come up with a replacement for Obamacare, and even many Republicans who don’t embrace that fantasy believe the demise of the mandate will ratchet up pressure for a permanent solution to a seven-year political war. It could happen. But there hasn’t been a lot of bipartisanship in Washington lately, and after the Doug Jones upset in Alabama, it seems unlikely that a Senate with one fewer Republican will be more amenable to a Republican-only repeal bill.

The most likely outcome seems to be at least a few more years of Obamacare muddling through, and at least a few more years of Obamacare political warfare.

 

Universal health care is doable for far less cost – but at a political price

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http://www.sacbee.com/opinion/california-forum/article189661334.html

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When the Legislature reconvenes and the campaigns for governor heat up next year, Californians will be hearing a lot – and a lot of hot air – about universal health care.

Making California the first state to guarantee health care for every resident has become a touchstone issue – and a divisive one – for the state’s dominant Democrats.

The state Assembly will take up – or possibly ignore – a universal health care bill that the Senate passed this year.

PASSING UNIVERSAL HEALTH CARE WITHOUT A SYSTEM OF PAYING FOR IT WOULD INVITE SCORN FROM THE MEDIA AND THE PUBLIC. BUT PASSING IT WITH IMMENSE NEW TAXES WOULD PUT DEMOCRATS IN POLITICAL JEOPARDY.

Assembly Speaker Anthony Rendon applied brakes to Senate Bill 562 in June, saying it “was sent to the Assembly woefully incomplete and has “potentially fatal flaws…including the fact it does not address many serious issues, such as financing, delivery of care (and) cost controls.”

That stance generated a torrent of personal invective from the measure’s advocates in the Democratic Party’s left – or Berniecrat – wing, driven by the California Nurses Association.

There’s a similar divide among the Democratic candidates for governor, with Lt. Gov. Gavin Newsom the most insistent advocate of expanding coverage.

Like Rendon, Newsom’s chief rivals, former Los Angeles Mayor Antonio Villaraigosa and Treasurer John Chiang, endorse universal health care in principle, but are leery about how it would be financed.

A Senate Appropriations Committee analysis pegs costs of universal coverage at $400 billion a year, but suggests that half could be covered by redirection of existing federal, state and local government health care spending.

It added that “about $200 billion in additional taxes would be needed to pay for the remainder,” but also noted that half or more of that burden could be offset by eliminating direct health care costs now borne by consumers and their employers.

To put that in perspective, even $100 billion in new taxes would be the equivalent of a one-third increase in the $300 billion a year now levied by state and local governments.

In theory – one advanced by advocates – the two-thirds “supermajorities” in the Legislature and the governor could levy new taxes of that magnitude.

In practice, however, even if the supermajorities survive the recent spate of sexual harassment resignations and next year’s elections, there’s virtually no chance of such a vote.

Rendon knows that passing universal health care without a system of paying for it would invite scorn from the media and the public, but passing it with immense new taxes would put some of his Democratic members in political jeopardy.

If, however, Democrats are serious about having universal health care insurance there’s another, perhaps easier, way to do it.

A new report from the federal government’s Centers for Disease Control says that with the advent of Obamacare, which expands the Medi-Cal program serving the poor and offers subsidies for others, California’s medically uninsured population has dropped from 17 percent in 2013 to 6.8 percent in 2017.

That means that there are about 2.7 million Californians still lacking some form of medical coverage, although many, if not most, receive rudimentary, albeit uncompensated, care in charity clinics and hospital emergency rooms.

As many as half of them would be eligible for government-paid or -subsidized care, and covering them is potentially doable under existing programs, according to Covered California, the state’s Obamacare implementation agency.

The remainder, mostly, are maybe a million-plus undocumented immigrant adults who are, by law, ineligible.

It’s not necessary for the state to seize control of California’s entire medical care system if the real bottom line goal is covering those undocumented immigrants. It could be done for about $10 billion a year, which is a lot less than $100 billion.

However, advocates would have to publicly acknowledge that covering them is what this conflict is all about and take whatever political heat it generates.

It’s a test of whether universal coverage is a real goal, or merely political symbolism.

Beyond Showmanship And Spite: Toward A Health Care “Grand Bargain”

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https://www.healthaffairs.org/do/10.1377/hblog20171116.24714/full/

Is a deal on health care possible? Conventional wisdom says no. “Repeal and Replace” is dead, and Republicans have moved on. So have many Democrats, toward pursuit of a single-payer plan that’s going nowhere on Capitol Hill but energizes the party’s core. Last month, President Donald Trump said he’ll “dismantle” the Affordable Care Act (ACA) on his own—and backed this up with executive orders that risk the stability of the insurance exchanges.

Democrats are angry that Trump and congressional Republicans want to repeal the ACA and roll back its expansion of health insurance coverage. Republicans are angry that Democrats pushed “Obamacare” through Congress on a party-line basis, and they see the ACA as big government running amok. Both parties are positioning themselves for primaries, and neither shows much interest in the risky work of compromise.

We’re alarmed. One of us is a Cato Institute-friendly “free-market”eer who wrote a book arguing (tongue in cheek) that Medicare is the work of the Devil. The other helped to develop President Barack Obama’s 2008 campaign health plan and believes that failure to ensure everyone’s access to health care is an assault on human decency. But we’ve come together because we believe that failure to resolve the present impasse will have hugely destructive consequences for millions of Americans’ access to health care—and for our national confidence in our political system’s capacity to function.

Designing A Deal

President Trump has cut off cost-sharing reduction subsidies to insurers and issued a directive to allow coverage options less comprehensive than the ACA requires—measures that threaten to unravel the individual and small-group markets by incentivizing younger and healthier people to exit. Meanwhile, the uncertainty that besets federal funding under the ACA for Medicaid expansion poses huge fiscal risks for states, as does Congress’s failure, so far, to renew funding for the Children’s Health Insurance Program (CHIP). And over the longer term, soaring private and public spending on medical services that deliver doubtful value erodes US productivity and well-being.

We think a bipartisan “grand bargain” to stabilize the US health care system is feasible—if key decision makers can move beyond showmanship and spite. To this end, we outline a deal that: honors but balances the competing values at stake, steadies both market and public mechanisms of medical care financing, and puts the nation on a path toward sustainability in health spending.

Our grand bargain builds on federalism. Vastly different values, priorities, and interests stand in the way of nationwide health policy uniformity. Allowing states to sort out controversial matters within broader limits than the ACA now imposes would permit creative policy alternatives to unfold and encourage local buy-in. We needn’t and shouldn’t mandate definitive answers to bitterly contested questions that can be reasonably negotiated at the state or local level. Instead, we should open political and market pathways for the emergence of answers to these questions over time.

Moving to this long game will require all sides to pass on their pursuit of a quick political win. Doing so is the key to moving from cycles of backlash and volatility to a system that builds confidence and delivers high-quality, compassionate health care to all.

The Long Game: Seven Steps Toward a Compromise that Can Work And Endure

With these basic principles in mind, we propose the following seven steps:

Moving Beyond Maximalism—Medicaid Rollback And “Medicare for All”

Republicans should end their campaign to roll back the ACA’s Medicaid expansion, and Democrats should stand down on their quest for single payer. Both pursuits inspire true believers but will go nowhere on Capitol Hill for the imaginable future.

State Flexibility

Give states more flexibility to design their Medicaid programs and to govern their insurance exchanges. One approach would be to simply allow states complete flexibility to design their own coverage rules. Alternatively, we could give states more flexibility but ensure, via federal law, that Medicaid and plans sold on the exchanges provide affordable access to effective preventive, diagnostic, and therapeutic services. States could also be allowed but not required to offer a public option through their exchanges. Instead of an all-or-none answer to the public plan question, the nation would have a framework for market-driven, state-by-state resolution. Similarly, states should be allowed to decide whether to prohibit, permit, or require enrollment of Medicaid beneficiaries in private plans. Finally, when it comes to care that serves culturally contested purposes—including, but not limited to, gender reassignment or confirmation and late termination of pregnancies for nontherapeutic reasons—states should be given autonomy to go their own ways. More federalism will achieve greater stability than would temporary nationwide imposition of one or another approach by whichever party happens to hold the electoral upper hand.

Health Savings Accounts That Appeal To Everyone

An expanded role for tax-protected health savings should have bipartisan appeal. We propose that every lawful US resident be auto-enrolled in a health savings account (HSA), funded through a refundable tax credit, scaled to income and family size. People could opt out but would lose this credit if they did. Few would do so, enabling HSAs to become a means for pursuing both market discipline and social equity.

Repeal The Individual Mandate

Sacrilege, you’re surely thinking, if you’re a Democrat who’s spent seven-plus years defending the mandate, the ACA’s most disliked element. But the mandate isn’t needed to keep healthy people in community-rated risk pools—it’s the intensity of the incentives, whether framed as penalties or subsidies, that matters. Even the mandate’s most outspoken economist-defender, Jonathan Gruber, concedes that high-enough subsidies for the purchase of insurance can substitute for it.

Such subsidies could be supplied in conservative-friendly fashion by allowing all who buy coverage on the exchanges to put HSA funds (including the tax credit we urge) toward their premiums. Sign-up for coverage could also be made more user-friendly through auto-enrollment, subject to opt-out, in “silver” plans (for tax filers who aren’t otherwise covered and aren’t Medicaid eligible). A more robust approach might condition the refundable HSA tax credit on tax filers’ purchasing insurance (or not opting out of auto-enrollment).

Congressional Authorization Of Funding For Both The ACA’s Cost-Sharing Reductions And CHIP

There is bipartisan support for restoring the ACA’s cost-sharing reduction subsidies and extending CHIP. Although annual appropriations are the norm, Congress should guarantee funding for the cost-sharing reductions for a two-year period, with automatic renewal for an additional two years if per capita subsidies rise by no more than the Consumer Price Index (CPI) during the prior two years. By so doing, Congress can reaffirm its authority over appropriations while helping to stabilize markets for individual coverage. Likewise, Congress should renew CHIP’s funding for several years—we urge three as a compromise—to both stabilize state budgets and secure health care for the millions of children who depend on this program.

The “Long Game”—Reining In Medical Spending

A long-term effort to contain spending growth is essential for US fiscal stability and consumer well-being. The ACA created a framework for doing this. The Independent Payment Advisory Board (IPAB) can limit Medicare spending, subject to congressional veto, if growth exceeds target rates. And the 40 percent “Cadillac tax” on high-cost private health plans will cover a rising share of the private market as medical costs increase. Together, these policies have the potential to contain clinical spending by capping demand. But there’s bipartisan opposition to both. The IPAB, which hasn’t yet been established, and the Cadillac tax, now delayed until 2020, are fiercely opposed by stakeholders with lots to lose, and they’re at high risk of repeal.

A grand bargain should follow through on both of these strategies, plus add similar restraints on Medicaid spending and on the amounts spent to subsidize coverage through the exchanges. Most other nations employ global budgeting to control health spending. For reasons of federalism, public philosophy, and market structure, global budgeting isn’t an option for the US. But a coordinated scheme of restraint, based on the best available behavioral and economic modeling, could apply similar braking power to our entire health economy. There’s plenty of room for argument about design details (that is, should per capita growth targets be based on the CPI? The CPI plus 1 percent?) and methods of restraint (that is, the IPAB approach? Spending caps for public programs? The Cadillac tax versus caps on tax deductibility of insurance premiums?). Continued bipartisan evasion will only make the problem worse.

Pursuing Therapeutic Value

Much more must be done to use health care resources wisely as constraints tighten. Tying financial rewards closely to clinical value via paymentpractices, market exclusivity policies, and other incentives will be critical—and will require the clearing of legal and regulatory obstacles. Voluntary action must also play a role: The grand bargain we’ve sketched here creates myriad opportunities for providers, patients, and insurers to gain by insisting on value from a sector of the economy that too often fails to deliver it.

To be sure, politics could foil all efforts to forge compromise. But there is a way forward. Our proposals achieve much that is important to both the ACA’s fiercest critics and staunchest defenders. They work in concert to address the political and market crises that immediately threaten our health care system, while laying the foundation for a long-term approach to control medical spending’s unsustainable growth.

Medicaid Expansion Has Improved the Financial Outlook for Safety-Net Hospitals

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http://www.commonwealthfund.org/publications/issue-briefs/2017/nov/financial-impact-state-medicaid-expansion-safety-net-hospitals

Abstract

  • Issue: Safety-net hospitals play a vital role in delivering health care to Medicaid enrollees, the uninsured, and other vulnerable patients. By reducing the number of uninsured Americans, the Affordable Care Act (ACA) was also expected to lower these hospitals’ significant uncompensated care costs and shore up their financial stability.
  • Goal: To examine how the ACA’s Medicaid expansion affected the financial status of safety-net hospitals in states that expanded Medicaid and in states that did not.
  • Methods: Using Medicare hospital cost reports for federal fiscal years 2012 and 2015, the authors compared changes in Medicaid inpatient days as a percentage of total inpatient days, Medicaid revenues as a percentage of total net patient revenues, uncompensated care costs as a percentage of total operating costs, and hospital operating margins.
  • Findings and Conclusions: Medicaid expansion had a significant, favorable financial impact on safety-net hospitals. From 2012 to 2015, safety-net hospitals in expansion states, compared to those in nonexpansion states, experienced larger increases in Medicaid inpatient days and Medicaid revenues as well as reduced uncompensated care costs. These changes improved operating margins for safety-net hospitals in expansion states. Margins for safety-net hospitals in nonexpansion states, meanwhile, declined.

Background

Through their missions or legal mandate, safety-net hospitals provide care to all patients, regardless of their ability to pay.1 They include public hospitals, which are often providers of last resort in their communities; academic medical centers, which combine their teaching function with a mission to serve vulnerable populations; and certain private hospitals.

Safety-net hospitals deliver a significant level of care to low-income patients, including Medicaid enrollees and the uninsured, typically providing services that other hospitals in the community do not offer — trauma, burn care, neonatal intensive care, and inpatient behavioral health, as well as education for future physicians and other health care professionals. They are also an important source of care to uninsured individuals who are ineligible for Medicaid or subsidized marketplace coverage because of their citizenship status.2

Several studies have suggested major reductions in uncompensated care and improved financial status at safety-net institutions in states that expanded Medicaid compared to those in states that did not expand.3,4 However, these results were based on interviews with a limited number of safety-net health system executives and staff. Our analysis expands on this research by examining changes in key financial metrics — that is, uncompensated care, Medicaid costs and revenues, and total hospital margins–across safety-net hospitals nationally using standardized data.

When compared to other short-term acute care hospitals, hospitals that met our safety-net hospital criteria had substantially higher Medicaid revenue and uncompensated care levels than non-safety-net hospitals. Safety-net hospitals, however, had lower operating margins (Exhibit 1).

Below we discuss findings on the impact of the Affordable Care Act’s (ACA) Medicaid expansion on safety-net hospitals’ financial status. The ACA allowed states to expand Medicaid eligibility to nonelderly adults with incomes up to 138 percent of the federal poverty level. The reduction in the number of uninsured under the ACA coverage expansions was expected to reduce the uncompensated care that hospitals provide, thus improving their financial status. As of 2015, 31 states and the District of Columbia had expanded Medicaid, while 19 states had not.5

We measure changes in the financial status of safety-net hospitals in states that expanded Medicaid prior to 2015 (326 hospitals) versus safety-net hospitals in states that did not expand or expanded in 2015 or after (268 hospitals). (See “How We Conducted This Study” for complete methods.)

Key Findings

Our analysis of Medicare cost report data for federal fiscal years 2012 and 2015 shows a sizable contrast in financial performance between safety-net hospitals in states that expanded Medicaid under the ACA and those in states that did not. Performance metrics included the following:

    • Hospital operating margins.6 Operating margins improved for safety-net hospitals located in Medicaid expansion states compared with declines for those in states that did not expand. From 2012 to 2015, operating margins for safety-net hospitals in Medicaid expansion states increased from –3.2 percent to –2.1 percent in 2015 (Exhibit 2, Appendix A). In contrast during the same period, operating margins for safety-net hospitals in nonexpansion states declined from 2.3 percent to 2.0 percent. Largely accounting for this difference were increased Medicaid revenues and reduced uncompensated care costs. Even after expansion, safety-net hospitals’ operating margins in Medicaid expansion states were lower than those in nonexpansion states.
    • Medicaid inpatient days. From 2012 to 2015, safety-net hospitals in Medicaid expansion states experienced larger growth in Medicaid utilization than those in nonexpansion states (Exhibit 3). During the study period, Medicaid inpatient days in expansion states rose 13.5 percent. In comparison, Medicaid inpatient days in nonexpansion states fell slightly, by 0.9 percent.
    • Medicaid revenues and costs.7 The rise in use of safety-net hospitals in Medicaid expansion states resulted in these hospitals’ increased Medicaid revenue and costs compared to a slight decline in nonexpansion states (Exhibit 4). From 2012 to 2015, safety-net hospitals’ Medicaid revenues as a share of net patient revenues rose 12.7 percent in Medicaid expansion states. In contrast, during the same period, safety-net hospitals’ Medicaid revenues as a share of net patient revenues declined 1.8 percent in nonexpansion states. However, safety-net hospitals’ profit margins on Medicaid patients fell from 6.8 percent to 0.7 percent in expansion states, suggesting that the revenues received for newly eligible patients did not keep pace with the higher cost of treating these patients.
    • Uncompensated care costs.8 In 2012, safety-net hospitals’ uncompensated care costs as a percent of total hospital operating costs equaled 6.7 percent in expansion states compared to 5.7 percent in nonexpansion states (Exhibit 5). By 2015, however, the safety-net hospitals’ share of uncompensated care declined to 3.5 percent in expansion states, or a reduction of 47.4 percent. By comparison, in nonexpansion states that year, uncompensated care costs as a share of total hospital operating costs fell to 5.3 percent, a 7.8 percent reduction.

Discussion

These data suggest that the Medicaid expansion created by the ACA had a significant positive financial impact on safety-net hospitals in states that expanded Medicaid eligibility relative to those in states that did not expand. Safety-net hospitals in expansion states saw larger increases in Medicaid patient volume and revenue, reduced uncompensated care, and improved financial margins compared to safety-net hospitals in nonexpansion states. Although our study’s results are specific to safety-net hospitals, other studies have found similar trends across all hospitals in expansion and nonexpansion states.9

The improved financial stability of safety-net hospitals could allow these hospitals to continue expanding outpatient capacity, invest in strategies to improve care coordination, hire new staff, and develop better infrastructure to monitor costs.10 Such investments can also help prepare hospitals for new payment arrangements that may require them to assume more financial risk for patient care and outcomes. Improvements not only benefit the institutions and Medicaid patients but the communities these hospitals serve.

Current attempts to repeal the ACA aim to eliminate the Medicaid expansions over time and curtail Medicaid spending by more than $800 billion over 10 years. The Congressional Budget Office estimates that about 14 million people could lose their Medicaid coverage by 2026, which would have an adverse effect on safety-net hospitals in those states. Specifically, safety-net hospitals’ gains in reduced uncompensated care and improved overall financial margins could be lost in the future.

 

Hospital revenue cycles improving, but denials are up

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https://www.healthcaredive.com/news/hospital-revenue-cycles-improving-but-denials-are-up/511014/

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Dive Brief:

  • Recycle cycle performance for hospitals and health systems is improving, but there are still major risks. These risks include increased denial write-offs, bad debt and inefficiencies, such as the costs associated with collecting from patients, according to Advisory Board’s recent Revenue Cycle Survey.
  • A median 350-bed hospital lost $3.5 million in increased denial write-offs from payers over the past four years, according to the report.
  • Jim Lazarus, national partner of technology at Advisory Board, said revenue cycle benchmarks are “encouraging,” but they also show “the risks of complacency.”

Dive Insight:

Advisory Board’s biennial survey reviewed four critical performance indicators. The researchers found mixed results. Denials remain an issue for hospitals, which wrote off 90% more uncollectable denials compared to six years ago.

The report also highlights downstream challenges. The median hospital successful denial appeals rate over the past two years:

  • Dropped from 56% to 45% for commercial payers
  • Fell from 51% to 41% for Medicaid
  • Increased from 50% to 64% for Medicare and Medicare Advantage

Advisory Board predicted that denials will remain an issue as an increasing number of them “are based on medical necessity rather than technical or demographic error.”

James Green, national partner of consulting at Advisory Board, said hospitals and health systems need strategies to address denials proactively.  “The wide range of denials performance among health systems — spanning 3% of net patient revenue between high and low performers — amounts to a $10 million swing for a median 350-bed hospital. Appeals are becoming increasingly difficult, so health systems should focus on approaches such as improved documentation and authorization processes,” said Green.

Another issue for health systems and hospitals is cash flow. In a bit of good news, the median performance for net accounts receivable days improved 8% between 2015 and 2017. However, Advisory Board warned the gains may be partially caused by write-offs and other factors, which can reduce accounts receivable and pose other challenges.

In another bit of good news, expanded coverage via the Affordable Care Act reduced hospital bad debt. However, that is offset by more and higher patient deductibles. Hospitals in Medicaid expansion states performed better regarding less bad debt, but high-deductible health plans (HDHP) increased unpaid patient obligations across all states regardless of whether they expanded Medicaid.

A recent Kaiser Family Foundation study found that the average deductible for people with employer-based health insurance increased from $303 in 2006 to $1,505 in 2017.

Advisory Board said the increase of HDHPs shows hospitals and health systems need to focus on patient collections, particularly at the point of service (POS). The report said a median 350-bed hospital could increase collections from $800,000 to nearly $3 million by improving POS collections. Advisory Board added that systems that collect upfront often give patients discounts, which result in a 90% increase in POS collections compared to those that do not offer discounts.

The cost of collections is an issue that continues to plague health systems. The median cost to collect has remained at 3% over the past four years, but that is higher than what it cost a decade ago. Advisory Board said reducing those costs are critical given the softening hospital margin trends in the past year. Health systems have also not realized cost improvements despite consolidation and centralized revenue cycle functions.

“While, for example, patient access is difficult to centralize, other functions present good opportunities, such as coding, billing, collections, denials and payer contracting, especially given their high operational costs for these functions,” said Christopher Kerns, executive director of research at Advisory Board.

Lower reimbursements and inpatient services coupled with a payer push for more outpatient services and patients taking on more responsibility for out-of-pocket costs is causing hospitals and health systems to figure out ways to survive. While Advisory Board mentioned suggestions to improve revenue cycle, some systems have instead decided mergers and acquisitions and divestitures are a better way to go.

Going those routes to improve financial footing has their own set of barriers. For instance, mergers and acquisitions reduce expenses for hospitals, but they can also cut revenue and hurt margins in the first two years, according to a recent report by the Deloitte Center for Health Solutions, in collaboration with Healthcare Financial Management Association.

As the Advisory Board report shows, there is some good news concerning hospital revenue cycles. However, hospitals must continue to improve patient collections as well as reduce payer denials — in a cost-effective manner — if they can expect to remain viable.

 

How the elections could put the brakes on anti-ACA plans

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https://www.axios.com/how-the-elections-could-put-the-brakes-on-anti-aca-plans-2508099820.html

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The most important issue in an election is sometimes, but seldom, the factor that actually determines the outcome of the election. That’s what we saw happen in Virginia this week. Health was the top issue in the Virginia race, according to exit polls, but it was only one of many factors that drove the election.

The bottom line: The election may have been more of a referendum on President Trump than health care — but the results in Virginia and in the Maine referendum on Medicaid expansion will still have a practical impact on what happens next, including the appetite for Affordable Care Act repeal and for cutting Medicaid to pay for tax cuts.

The details: Voters in Virginia named health care as far and away their top issue in the election in the network exit poll. It’s not surprising that the issue was at the top of their minds; they have been hearing all about the ACA in the news for months and about Medicaid expansion in their state.

Yes, but: Notably, the exit poll did not include the economy on the list of issues voters could choose. Fox News did ask about the economy and, as the chart shows, it and health were statistically tied in their poll.

Between the lines: When voters rank health care as a top issue in an election, it does not necessarily mean health care drove their vote. Voters’ views of the candidates themselves are generally a bigger factor. The candidates were also proxies for voters’ feelings about President Trump, and many more voters in Virginia said they were voting to express opposition to Trump than their support for him (34% vs. 17%).

Most voters who chose health care as their top issue in Virginia voted for Northam, possibly signaling that Democrats may be able to campaign on health care and the ACA in upcoming elections.

What to watch: The Maine vote on Medicaid expansion was a different story. Maine voters cast their ballots on a specific referendum to expand the Medicaid program, and it won resoundingly. The result speaks to a lesson learned in the repeal and replace debate: Medicaid and Medicaid expansion are far more popular than Republicans seem to think they are, largely because Medicaid now covers 74 million Americans and matters to a broad cross section of the American people.

The impact: The immediate political implication is that it will be much tougher to cut Medicaid to help pay for tax cuts. Another lesson is that expanding Medicaid could be a winner in other states, especially with the federal government picking up 90 percent of the costs and the Trump administration ready to let red states put a conservative stamp on their programs. Medicaid is not Social Security or Medicare yet, but politically it is a lot closer than Republicans may realize.

A lot can and probably will happen between now and 2018. But for now, the prominence of health care in the Virginia election could throw a scare into moderate Republicans about continuing to pursue ACA repeal. And the Maine referendum on Medicaid expansion could make them more cautious about cutting Medicaid.

Virginia’s Electoral Changes Boost Medicaid Expansion Odds

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This week’s groundswell of political change in Virginia has improved the odds of Medicaid expansion becoming law there. The long-stalled liberal priority gained new life after Democrats nearly wiped out Republicans’ overwhelming majority in the House of Delegates.

For years Medicaid expansion, a key part of former President Barack Obama’s health care law, has been a non-starter in the Old Dominion. Republicans, who controlled two-thirds of Virginia’s House seats, have fiercely rejected expansion. Democrats have only made perfunctory pushes on the issue since 2014, when they lost a months-long showdown with the GOP.

That all changed Tuesday as Democrats won at least 15 House seats. Control of the chamber is still up in the air as a couple of close races have yet to be called — an outcome few but the most optimistic Democrats were expecting.

Democratic House Leader David Toscano said the election has “totally changed the dynamic” on Medicaid expansion, shifting it from a lost cause to something with serious momentum.

“It’s not dead on arrival anymore,” he said.

Toscano said expansion is by no means guaranteed but he believes Democrats could swing the needed handful of Republicans even if the GOP maintained slight control of the House.

Democratic Gov.-elect Ralph Northam, who made Medicaid expansion a part of his campaign platform, said Wednesday he’s eager to work with GOP lawmakers to get it approved. Republican state Sen. Emmett Hanger has previously expressed support for expansion. That theoretically provides enough votes to get it passed in the narrowly spilt state Senate.

But Republican leaders in both chambers said Thursday the election has not changed their opposition to the expansion. They say it would be fiscally irresponsible, even with the federal government promising to cover most of the new costs.

“Free and guaranteed money from Washington is neither free nor guaranteed,” said Parker Slaybaugh, a spokesman for Republican House Leader Kirk Cox.

Supporters of Medicaid expansion, including the state’s hospitals and much of the medical community, say it will boost the state’s economy in addition to helping poor people. Julian Walker, spokesman for the Virginia Hospital and Healthcare Association, said his group “stands ready to work” with lawmakers “to enhance coverage and alleviate the impact of uncompensated care of the state.”

The issue is gaining traction outside of Virginia.

In a public referendum Tuesday, Maine voters defied their state’s Republican governor and decided they wanted to expand Medicaid to some 70,000 citizens. Maine would join 31 other states in expanding the program. Similar referendum campaigns are planned in at least three other states.

At the federal level, Republicans have had little success trying to undo Medicaid expansion, despite President Donald Trump’s campaign promises to “repeal and replace” his predecessor’s law. GOP bills that would have repealed Medicaid expansion and limited future federal financing for the entire Medicaid program failed to pass Congress and drew opposition from some Republican governors.

Overall, about 11 million people in the country have gotten health coverage through the expansion of Medicaid.

Medicaid Is Great, but Rural Maine Needs Hospitals, Too

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This week Maine voted to become the 32nd state to expand Medicaid despite opposition by Gov. Paul LePage, who had vetoed five previous expansion bills passed by the state legislature and has now threatened to block the results of the ballot initiative. Unless Mr. LePage succeeds, about 80,000 more Mainers will be eligible for coverage, a victory in an unsettling year for health care in America.

With the Affordable Care Act under constant threat from the Trump administration and out-of-pocket costs rising faster than wages, health care topped the list of the most important issues facing Americans this year.

However, Maine and other rural states face a health care crisis that Medicaid expansion can’t fix on its own. It’s not about affordable coverage; it’s about access: For too many rural areas, doctors and hospitals are scarce.

In the postwar era, America made hospital construction and modernization a priority. On Aug. 13, 1946, Harry Truman signed the Hill-Burton Act,giving communities grants and loans for hospital construction. By 1975, almost one-third of American hospitals owed their creation to the law. Financing for Hill-Burton health care construction ended in 1997, but one rule from the original bill still applied: These hospitals had to give free or reduced care to people who couldn’t afford services. As rural areas aged and the population shrank because of manufacturing’s decline and the rise of a technology-driven economy centered on urban areas, hospitals struggled to stay in operation.

Under the Affordable Care Act, hospitals started shutting down at worrisome rates because of an increase in financial penalties for noncompliance with A.C.A. mandates, the cost of tighter reporting standards and smaller reimbursements for certain procedures. Since the A.C.A. became law in 2010, over 80 rural hospitals have closed nationwide. Maine alone has lost three hospitals in that time, about 10 percent of its rural total.

If closings continue at this rate, 25 percent of America’s rural hospitals will have disappeared in the decade after Obamacare’s passage. This does not take into account facility deterioration, doctor departures or department closures.

This is a big problem for Maine, which has the highest percentage of rural residents in the country, according to the most recent census data. Calais Regional Hospital in Down East Maine recently oversaw its last childbirth. The obstetrics department closed in late summer, forcing women in labor to drive 50 minutes to deliver their babies. Despite an opioid crisis that increases the chance of high-risk pregnancies, this same privately owned hospital shut down its pediatrics wing and intensive care unit in recent years, because of financial pressure from the management company halfway across the country in Tennessee.

This was hardly an isolated example in Maine. The town of Jackman closed its 24-hour emergency room in September, and Boothbay lost its only hospital in 2013. Rangeley, where my wife’s family lives, is an hour away from the nearest hospital and has no doctor in town.

Meanwhile, Maine Med in Portland, Maine’s largest city, is about to break ground for a $512 million addition just a few years after it finished a $40 million renovation. While rural Maine’s hospitals and departments are closing because of large losses, Maine Med had, for 2016, a $61 million surplus.

Medicaid expansion is a welcome source of new revenue to rural hospitals in Maine because more insured patients mean fewer uncompensated treatments. Still, it comes nowhere close to fixing the problem or, politically, putting any meaningful points on the Democratic scoreboard.

In 2016, Donald Trump won Maine’s rural congressional district by a 10-point margin and rural counties in America at large by a 26-point marginon a message of repealing and replacing Obamacare. As Maggie Elehwany of the National Rural Health Association said in an NPR interview this year, rural Americans voted for Mr. Trump in part because of health care. “They see their hospitals closing,” she noted. “And one hospital C.E.O. described it as a three-pronged stool. It’s the churches, the hospitals and the schools. If you lose one of those legs of that stool, the whole community collapses.”

Since President Trump hasn’t been able to deliver on any meaningful legislation to support rural voters, it is the Democrats’ time to deliver. One good step is a bill sponsored by the Democratic senators Tim Kaine of Virginia and Michael Bennet of Colorado called Medicare-X. It would give a public option to Americans in rural counties where limited competition has yielded higher-priced health insurance options.

It still doesn’t solve the heart of the rural problem. Democrats can’t just lower premiums and expand Medicaid. We must strengthen rural communities by making access to high-quality health care services a priority of any proposal. In any future legislation, we should demand grants for new hospitals, funds to modernize crumbling ones and financial incentives for top doctors to work in these areas. This will not only make rural communities healthier, but also more welcoming for growth and new business.

No person suffering from a heart attack should die because a hospital is too far. No pregnant mother should have to risk the health of her baby because she can’t make it to a delivery room in time. As Democrats, we believe that health care is a right. It would be a big mistake to expand health care insurance but offer no place to use it.

Maine Medicaid expansion vote seen as ‘Obamacare’ referendum

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The roiling national debate over the government’s proper role in health care is coming to a head in a state more commonly known for moose, lobster and L.L. Bean.

On Nov. 7, voters in Maine will decide whether to join 31 other states and expand Medicaid under former President Barack Obama’s Affordable Care Act. It is the first time since the law took effect nearly four years ago that the expansion question has been put to voters.

The ballot measure comes after Maine’s Republican governor vetoed five attempts by the politically divided Legislature to expand the program and take advantage of the federal government picking up most of the cost.

It also acts as a bookend to a year in which President Donald Trump and congressional Republicans tried and failed repeatedly to repeal Obama’s law.

Activists on both sides of the issue are looking at the initiative, Maine Question 2, as a sort of national referendum on one of the key pillars of the law, commonly known as Obamacare. Roughly 11 million people nationwide have gained coverage through the expansion of Medicaid, the state-federal health insurance program for lower-income Americans.

Republican consultant Lance Dutson called Maine’s initiative a national bellwether in which the needs of the people could trump political ideology.

A pillar of former President Barack Obama’s health care law faces a test in Maine, where voters will decide whether to expand Medicaid. If voters pass the initiative, Maine would become the 32nd state to accept the expansion. (Oct. 31)

“People believe there are good parts to Obamacare and bad parts to Obamacare. And without taking Medicaid expansion, we are leaving one of the good parts on the table while still suffering from the bad parts of it,” said Dutson, who supports Question 2.

Maine may not be the last state to put the Medicaid question before voters. Expansion proponents in Idaho and Utah have launched similar efforts in those states aimed at the 2018 ballot.

If the initiative passes, an estimated 70,000 people in Maine would gain health coverage. The issue is personal to many in an aging, economically struggling state with a population that is smaller than the city of San Diego.

Nature painter Laura Tasheiko got dropped from Medicaid three years ago after successfully battling breast cancer. Since then, she has relied on the charitable services of a hospital near her home in Northport, a seaside village of less than 2,000 people about 100 miles northeast of Portland.

She worries about having another serious health problem before she is eligible for Medicare when she turns 65 next year.

“Some of the after-effects of the chemo can be severe, like heart failure,” she said. “Having no insurance is really scary.”

Maine’s hospitals support the Medicaid expansion and say charity care costs them over $100 million annually. The initiative’s supporters have reported spending about $2 million on their campaign, with hundreds of thousands of dollars coming from out-of-state groups. By comparison, the lead political action committee established to oppose the measure has spent a bit less than $300,000.

Among those who say Maine will benefit from the expansion is Bethany Miller. She said her adult son, Kyle, needed Medicaid because he couldn’t afford subsidized monthly insurance premiums even though he was working.

She remembers watching as her son’s eyes went hollow and his body turned skeletal in the weeks before he died, at age 25, from a diabetic coma a year ago.

“He had a job, but he didn’t make enough money to pay for his basic needs and his insulin, and he couldn’t live without his insulin,” said Miller, who lives in Jay, a small paper mill town about 70 miles north of Portland.

LePage, a Trump supporter, is lobbying furiously against the initiative. He and other critics warn that the expansion will be too costly for Maine, even with the federal government picking up most of the tab. After 2020, the state’s share of paying for the expansion population would be 10 percent.

LePage warns that he would have to divert $54 million from other programs — for the elderly, disabled and children — to pay for Medicaid expansion.

“It’s going to kill this state,” he said.

LePage said he considers Medicaid another form of welfare and wants to require recipients to work and pay premiums.

Maine currently serves about 268,000 Medicaid recipients, down from 354,000 in 2011. LePage credits the drop to his administration’s tightened eligibility restrictions.

If Question 2 passes, the Medicaid expansion would cover adults under age 65 with incomes at or below 138 percent of the federal poverty level. That’s $16,643 for a single person or $22,412 for a family of two.

State Rep. Deborah Sanderson, a Republican, said Maine is already struggling to serve its rapidly aging population as nursing homes shutter and rural hospitals struggle.

“I get accused on occasion of trying to pit one population of folks against another,” she said. “It’s a case of only having a certain amount of resources to take care of a large number of needs.”

Finances are a concern in a state marked by factory closures and sluggish wage growth.

But with more people living on the margins, advocates of the expansion say that is all the more reason to extend the benefits of Medicaid. About 8 percent of Maine residents do not have insurance, a little less than the national percentage.

Democratic Sen. Geoffrey Gratwick, a retired rheumatologist, said he has seen many patients throughout his career who did not have health insurance and came to him with a disease already in its late stages. He voted for all five Medicaid expansion attempts.

“They are just as good people as you or I, but their lives will be shorter and they will be sicker,” he said. “Compassion, common sense and our economic interest demand that we get them the health care they need.”

Nathalie Arruda and her husband, Michael, are in that group that is sometimes without insurance. They live in the farming community of Orland, halfway between New Hampshire and the state’s eastern border with New Brunswick, Canada.

The couple run a computer business and rely on herbal teas and locally grown greens to stay healthy as they fall in and out of Medicaid eligibility. LePage restricted Medicaid eligibility for adults with dependents, like the Arrudas.

“There have absolutely been times when my husband or I have put off getting something looked at that we probably should have because we didn’t have coverage,” Arruda said.

In Miller’s view, her son would still be alive if LePage had signed one of the Medicaid expansion bills sent to him by the Legislature.

When Kyle turned 21, he was one of thousands who lost MaineCare coverage under the governor’s reforms. She said he juggled construction jobs but couldn’t afford his $80 subsidized monthly premium for private insurance.

He struggled to pay medical bills from emergency room visits, Miller said.

Before Kyle died last November, he had landed a steady job at a plastics factory that promised health insurance. He didn’t live long enough to get the coverage, falling into a diabetic coma.

“He started rationing his insulin so he could buy food,” his mother said. “And it cost him his life.”

Opioid Commission Unveils Blueprint To Fight Crisis, But Passes Funding Buck To Congress

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The group’s 56 recommendations include tightening prescription practices and expanding drug courts, prevention efforts, treatment access and law enforcement tactics.

President Trump’s bipartisan commission on the opioid crisis made dozens of final recommendations on Wednesday to combat a deadly addiction epidemic, ranging from creating more drug courts to vastly expanding access to medications that treat addiction, including in jails.

The commissioners did not specify how much money should be spent to carry out their suggestions, but they pressed Congress to “appropriate sufficient funds” in response to Mr. Trump’s declaration last week of a public health emergency.

The 56 recommendations — which covered opioid prescribing practices, prevention, treatment, law enforcement tactics and funding mechanisms — did not so much advocate a new approach as expanding strategies already being used.

Reaction from treatment advocates was mixed, with many expressing frustration that the commission had not called for a specific level of funding. Chuck Ingoglia, a senior vice president at the National Council for Behavioral Health, which represents treatment providers, said that his group agreed with many of the recommendations, but that the report “starves the country for the real resources it needs to save American lives.”

Although the commission did not put a dollar amount on its recommendations, it had specific ideas for how federal money should be funneled to states. Its top recommendation was to streamline “fragmented” federal funds for addiction prevention and treatment into block grants that would require each state to file only a single application instead of seeking grants from dozens of programs scattered across various agencies.

The commission also appealed to the Trump administration to track more carefully the huge array of interdiction, prevention and treatment programs it is funding and to make sure they are working. “We are operating blindly today,” its report said.

Regina LaBelle, who was chief of staff in the White House Office of National Drug Control Policy under President Barack Obama, said the recommendations recognized “the importance of proper and appropriate treatments” for addiction, particularly medications that help people avoid cravings and symptoms of withdrawal. But, she added, “There needs to be more funding for this.”

The head of the commission, Gov. Chris Christie of New Jersey, a Republican, suggested in a television interview Sunday that Mr. Trump would soon ask Congress to allocate far more money for fighting the nation’s addiction problem. “I would say that you’re going to see this president initially ask for billions of dollars to deal with this,” he said on ABC’s “This Week.”

The White House issued a statement thanking the commission and saying it would review the recommendations.

It is hard to determine how much money is truly needed. When Senate Republicans added $45 billion in addiction treatment funds to an Obamacare repeal bill that ultimately failed, Gov. John Kasich of Ohio, a Republican, said that amount was akin to “spitting in the ocean.”

Richard Frank, a health economics professor at Harvard Medical School who worked in the Obama administration, estimated that it could cost roughly $10 billion a year to provide medication and counseling to everyone with opioid use disorder who is not already in treatment. Treating opioid-dependent newborns, meeting the needs of children in foster care because of their parents’ addiction and treating hepatitis C and other illnesses common among opioid addicts would cost “many billions more,” Mr. Frank said.

Mr. Frank also cautioned that block grants would not work if the administration decided to include federal Medicaid funding for addiction treatment in them. “When one starts to carve out certain services as grants, as opposed to insurance funding, one undermines the insurance,” he said. “It is a method of killing Medicaid with 1,000 nicks.”

Some of the commission’s other recommendations included making it easier for states to share data from prescription drug monitoring programs, which are electronic databases that track opioid prescriptions, and requiring more doctors to check the databases for signs of “doctor shopping” before giving a patient opioids.

The commission encouraged the federal Centers for Medicare and Medicaid Services to review policies that it claimed discouraged hospitals and doctors from prescribing alternatives to opioids, especially after surgery. According to the commission’s report, C.M.S. pays a flat, “bundled” payment to hospitals after patients undergo surgery, which includes treatment for pain. Because they get a flat fee, hospitals are encouraged to use cheap products – and most opioid medications are generic and inexpensive.

“Purchasing and administering a non-opioid medication in the operating room increases the hospital’s expenses without a corresponding increase in reimbursement payment,” the report said.

More broadly, the report said the federal government as well as private insurers should do a better job of covering a range of pain-management and treatment services, such as non-opioid medications, physical therapy and counseling. And it recommended that the Department of Health and Human Services and other federal agencies eliminate any reimbursement policies that limit access to addiction medications and other types of treatment, including prior authorization requirements and policies that require patients to try and fail with one kind treatment before getting access to another.

One prevention measure the commission did not embrace is expanding syringe exchange programs, which public health experts say save money and lives by reducing the spread of H.I.V. and hepatitis C with contaminated syringes.

“I was hoping to see that in this report,” Ms. LaBelle said.

The commission’s members – Mr. Christie, Gov. Charlie Baker of Massachusetts, a Republican; Gov. Roy Cooper of North Carolina, a Democrat; Pam Bondi, the Republican attorney general of Florida; Patrick Kennedy, a former Democratic congressman from Rhode Island and Bertha Madras, a Harvard professor – all voted for the final recommendations, which came about a month later than expected.

His voice quaking with emotion, Mr. Kennedy said during the commission’s meeting Wednesday that Congress needed to appropriate sufficient funds for the initiative, suggesting at least $10 billion.

”This town doesn’t react unless it hears from real people“ who will vote in the next election, he said, nodding to guests who had testified about their families’ searing experiences with addiction, stigma, lack of treatment options and the refusal of insurance companies to cover treatment.

Mr. Kennedy also noted that insurance coverage is crucial to fighting addiction; in another commission meeting earlier this year, he took Republicans to task for working to repeal the Affordable Care Act and cut Medicaid.