More Medicaid Matching Funds for Only Partial Medicaid Expansion?

The federal government is considering providing an unusual amount of federal Medicaid matching funding for only partial state Medicaid expansion.

At least that’s what Centers for Medicare & Medicaid Services administrator Seema Verma told a health care conference in Georgia last week.

The state of Georgia has proposes partially expanding its Medicaid population.  Under the Affordable Care Act, states that fully expand their Medicaid programs under the terms established by the 2010 health care law receive nine dollars in federal matching funds for every one dollar they spend on their Medicaid expansion population.  States that only partially expand their Medicaid programs, on the other hand, currently are eligible to receive only their usual federal matching rate:  generally one federal dollar for every state dollar, with states with higher poverty rates receiving as much as slightly more than three dollars for every state dollar they spend.

Last week, however, CMS’s Verma said that when Georgia submits its Medicaid waiver application to CMS seeking only partial expansion of its Medicaid program, the federal agency will consider providing Affordable Care Act-level Medicaid matching funds rather than the traditional federal Medicaid matching rate.

Such a policy shift could be very beneficial for private safety-net hospitals in states that have not expanded their Medicaid programs, extending coverage to some of the currently uninsured, low-income residents of the communities in which those hospitals are located.

Learn more about the Georgia plan for partial Medicaid expansion and the possibility of CMS treating it like an Affordable Care Act Medicaid expansion in the Atlanta Journal-Constitution article “Trump official open to increased funding for Georgia Medicaid waiver.”

Uninsured ED and Inpatient Visits Down Since ACA

Uninsured hospital admissions and emergency department visits are down since passage of the Affordable Care Act.

And Medicaid-covered admissions and ER visits are up, according to a new analysis.

The report, published on the JAMA Network Open, found that ER visits by uninsured patients fell from 16 percent to eight percent between 2006 and 2016, with most of this decline after 2014, while uninsured discharges fell from six percent to four percent.

The rate of uninsured ER visits declined, moreover, at a time when overall ER visits continued to rise.

While the Affordable Care Act is likely the cause of most of these changes, other contributing factors include the emergence of urgent care facilities, telemedicine, and free-standing ERs as well as new payment models and rules.

The study’s findings are especially good news for private safety-net hospitals because they care for so many more low-income patients than other hospitals and have benefited from the Affordable Care Act’s expansion of access to insurance, whether through Medicaid expansion or the private health insurance market.

Learn more in the JAMA Network Open article “US Emergency Department Visits and Hospital Discharges Among Uninsured Patients Before and After Implementation of the Affordable Care Act.”

NASH Asks Grassley, Senate Finance Committee to Delay Medicaid DSH Cut

Delay or eliminate the FY 2020 Medicaid disproportionate share payment cut, NASH has asked Senator Charles Grassley in a recent letter.

The cut, mandated by the Affordable Care Act but delayed three times by Congress, was envisioned as an appropriate response to what was expected to be a significant decrease in the number of uninsured Americans as a result of the 2010 health reform law.  In his news release, Senator Grassley, chairman of the Senate Finance Committee, notes that Congress has delayed implementing this Medicaid DSH cut three times and needs to address the issue definitively.

In its letter, NASH maintains that the Affordable Care Act has not reduced the number of uninsured Americans as much as anticipated, leaving private safety-net hospitals and others still to provide significant amounts of uncompensated care to their low-income and uninsured patients and therefore still in need of their full Medicaid DSH payments.

NASH also argues that uncertainty in the health care arena today – legislative and judicial challenges to the Affordable Care Act, states changing the eligibility criteria and benefits of their Medicaid programs, the instability of health insurance marketplaces, and more – makes this an inappropriate time to reduce payments to safety-net hospitals, possibly jeopardizing access to care in low-income areas as a result.

Learn more by reading Senator Grassley’s news release and NASH’s letter to him.

ACA Repeal Would Drive Up Uninsured, Uncompensated Care

At the same time that the Trump administration announced that it has asked a federal court to repeal the entire Affordable Care Act, the Urban Institute has published a report detailing the potential impact of the health care reform law’s repeal.

According to the Urban Institute report, repealing the entire Affordable Care Act would add almost 20 million Americans to the ranks of the uninsured.  Medicaid and CHIP enrollment would fall by 15.4 million people and millions of others would lose the tax credits they used to purchase insurance.  Some would purchase insurance with limited benefits and individual plan premiums would rise while others would go uninsured.

In addition, repeal of the Affordable Care Act would lead to an 82 percent increase in hospital uncompensated care, to more than $50 billion.  About half of the states would see the amount of uncompensated care provided by their hospitals double, the Urban Institute estimates.

Repeal of the Affordable Care Act would pose an especially great financial challenge for private safety-net hospitals because they care for so many Medicaid- and CHIP-covered and low-income patients who might lose their coverage if the reform law is repealed.

Learn more from the Healthcare Dive article “Killing ACA would lead to huge spikes in uncompensated care” and from the Urban Institute report State-by-State Estimates of the Coverage and Funding Consequences of Full Repeal of the ACA.

 

Trump Budget Brings Bad News for Private Safety-Net Hospitals

The FY 2020 federal budget proposed by the Trump administration this week would bring pain for private safety-net hospitals if adopted.

Highlights of the proposed spending plan include:

  • More than $135 billion in cuts in Medicare uncompensated care payments (Medicare DSH) and Medicare bad debt reimbursement over the next 10 years.
  • Continued extension of Medicare site-neutral payment outpatient policies.
  • $48 billion in cuts in graduate medical education spending over the next 10 years.
  • $26 billion in new Medicaid disproportionate share (Medicaid DSH) cuts.
  • Repeal of the Affordable Care Act’s Medicaid expansion and all funding to pay for that expansion.
  • Support for legislation to introduce Medicaid block grants and limits on spending per recipient.
  • New restrictions on the 340B program.

Responsibility for adopting a budget rests with Congress, not the president, and this proposed budget is considered unlikely to gain much support in Congress.

As appropriate, NASH will engage in advocacy in support of the needs of the nation’s private safety-net hospitals.

Learn more about the administration’s proposed budget from numerous media reports or by going directly to the source:  fact sheets the White House has prepared offering budget highlights and the budget document itself.

 

Hospital Groups Join NASH in Calling for Delay of Medicaid DSH Cuts

Seven hospital trade groups have written to congressional leaders asking them to delay Affordable Care Act-mandated cuts in Medicaid disproportionate share hospital payments (Medicaid DSH) that are scheduled to take effect in October of this year.

Their letter echoes a long-time advocacy priority of the National Alliance of Safety-Net Hospitals.

In their letter the groups, led by the American Hospital Association and the Association of American Medical Colleges, write of the underlying rationale for the Affordable Care Act mandate for Medicaid DSH cuts that

…the coverage rates envisioned under the ACA have not been fully realized, and tens of millions of Americans remain uninsured. In addition, Medicaid underpayment continues to pose ongoing financial challenges for hospitals treating our nation’s most vulnerable citizens.

NASH has long advocated such delaying Medicaid DSH cuts, most recently in comments to Congress in response to the proposed State Accountability, Flexibility, and Equity for Hospitals Act.

Delaying Medicaid DSH cuts also is identified as an advocacy priority of private safety-net hospitals in NASH’s 2019 policy and advocacy agenda.

States Taking Different Paths to Pay for Medicaid Expansion

With the federal share of Medicaid expansion falling to 90 percent next year, states that expanded their Medicaid programs under the Affordable Care Act are now exploring new ways to raise the money to pay for the 10 percent for which they will soon by responsible.

Some are implementing hospital or insurer taxes while others are increasing existing taxes on hospitals and health insurers.  New Hampshire is directing part of the proceeds from a liquor tax for this purpose and other states have introduced cigarette taxes.  Some are charging premiums to Medicaid beneficiaries and introducing Medicaid work requirements so they can reduce overall enrollment.  Many are using money from their general revenues.

This all comes at a time when many states are finding that their budget situations have improved and are better than they have been in years.

Learn more about how states are dealing with this challenge, and whether they are finding that it is worth it, in the Washington Post article “States scramble to head off future Medicaid shortfalls.”

MACPAC: Slow Medicaid DSH Cuts

Slow the pace of scheduled cuts in Medicaid disproportionate share hospital payments (Medicaid DSH), the non-partisan agency that advises Congress and the administration will tell Congress in its next report of policy recommendations.

The Medicaid and CHIP Payment and Access Commission voted 16-1 recently to recommend to Congress that Medicaid DSH cuts, mandated by the Affordable Care Act but delayed three times by Congress, be reduced in size and spread out over a longer period of time.

Currently, Medicaid DSH allotments to the states are scheduled to be reduced $4 billion in FY 2020 and then $8 billion a year in FY 2021 through FY 2025.  MACPAC recommends that the cuts be reduced to $2 billion in FY 2020, $4 billion in FY 2021, $6 billion in FY 2022, and $8 billion a year from FY 2023 through FY 2029.

MACPAC commissioners also voted to urge Congress to restructure the manner in which Medicaid DSH allotments to the states are calculated based on the number of low-income individuals who reside in the states.

Most private safety-net hospitals receive Medicaid DSH payments and consider them a vital resource in helping to underwrite the uncompensated care they provide to uninsured patients.  NASH supports delaying the implementation of Medicaid DSH cuts and reducing the size of the cuts once implementation begins, doing so most recently in a letter to Senator Marco Rubio in response to Mr. Rubio’s introduction of Medicaid DSH legislation.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program.

Learn more about MACPAC’s actions on Medicaid DSH in the Fierce Healthcare article “MACPAC calls for Congress to delay cuts to safety-net hospitals.”

NASH Comments on Proposed Medicaid DSH Revamp

In mid-December, Senator Marco Rubio (R-FL) introduced the State Accountability, Flexibility, and Equity (SAFE) for Hospitals Act, which seeks to restructure the federal Medicaid disproportionate share hospital payment program (Medicaid DSH).  Hospitals that care for especially large numbers of Medicaid, low-income, and uninsured patients often receive supplemental payments, called Medicaid DSH payments, from their state government to help underwrite costs associated with such patients for which they are not reimbursed.  Medicaid DSH payments are funded in part by the federal government and in part by the individual states.

As part of his introduction of his bill, Senator Rubio contacted many stakeholder groups and invited them to review and comment upon his proposal.

Among the groups contacted was the National Alliance of Safety-Net Hospitals, and last week, NASH wrote to Senator Rubio to convey its views.

Instead of addressing specific aspects of the proposal, NASH offered three principles it believes should guide any effort to modify the Medicaid DSH program.  Those principles are:

  • Delay the scheduled Medicaid DSH cuts. (Significant reductions of Medicaid DSH allotments to states, mandated by the Affordable Care Act but delayed three times by Congress, are scheduled to take effect in FY 2020.)
  • Any changes in Medicaid DSH must reflect the role Medicaid DSH plays in state Medicaid programs.
  • Any changes in Medicaid DSH must preserve states’ flexibility to use Medicaid DSH resources in the manner they believe best serves their individual Medicaid programs.

Learn more about the SAFE Hospitals Act from Senator Rubio’s news release outlining the proposal and learn about NASH’s response to his request for stakeholder input from the letter NASH sent to Senator Rubio last week.

 

CMS Introduces New Waivers

The Centers for Medicare & Medicaid Services has introduced four new “state relief and empowerment waivers” that are widely viewed as new vehicles for states to circumvent Affordable Care Act requirements to implement their own new approaches to health care.

  • Through “account-based subsidies” waivers, states may direct public subsidies into defined-contribution, consumer-directed accounts that individuals use to pay for health insurance premiums or other health care expenses.
  • “State-specific premium assistance” waivers enable states to create their own subsidy programs.
  • “Adjusted plan options” authorizes states to provide financial assistance for different types of health insurance plans, including short-term and other health insurance policies that do not meet Affordable Care Act benefits and coverage requirements.
  • “Risk stabilization strategies” waivers give states greater flexibility to implement reinsurance programs or high-risk pools.

These waiver options have been introduced not through regulations but through guidance published in the Federal Register.  States must apply for these waivers, which must meet section 1332 federal standards for  comprehensiveness, affordability, coverage, and federal deficit neutrality.

Learn more about state relief and empowerment waivers in this CMS fact sheet and this guidance that was published in the Federal Register.