NAUH Asks Congressional Leaders to Delay Medicaid DSH Cut

Delay cuts in Medicaid disproportionate share (Medicaid DSH) allotments to states, NAUH has asked congressional leaders.

Medicaid DSH payments, which help private safety-net hospitals with the cost of caring for their low-income and uninsured patients, were slated for cuts under the Affordable Care Act in anticipation of a steep decline in the number of uninsured Americans.  While the reform law has helped millions obtain insurance, safety-net hospitals continue to serve large numbers of low-income and uninsured patients.  Recognizing this, Congress has twice delayed this Medicaid DSH cut but its moratorium on the cut ended on December 31.

Now, NAUH has asked the leaders of Congress to restore the Medicaid DSH cut delay as part of their current budget deliberations.

See NAUH’s letter to congressional leaders here.

Safety-Net Hospitals Under the Gun

Safety-net hospitals across the country – including private safety-net hospitals – face a new challenge:  adjusting to several cuts in the supplemental payments they receive from the federal government to help them serve the low-income residents of the communities in which they are located.

First there is a $2 billion cut in Medicaid disproportionate share hospital payments (Medicaid DSH).  These are payments made to hospitals that serve especially large numbers of low-income patients.  These payments help safety-net hospitals with the unreimbursed expenses they incur caring for such patients.  This cut, mandated by the Affordable Care Act but twice delayed by Congress, took effect on January 1.  In many states the value of Medicaid DSH cuts will exceed the reductions in uninsured care that hospitals have experienced since the Affordable Care Act made health insurance more widely available.

Second there is a 28 percent cut in Medicare payments for prescription drugs dispensed through the section 340B prescription drug discount program.  This cut, too, took effect on January 1.

Finally, federal funding has lapsed for the Children’s Health Insurance Program (CHIP) and for community health centers.

Safety-net hospitals are considering a number of moves to offset these losses.  Among them:  reducing or eliminating services, laying off staff, discontinuing the provision of transportation assistance, and eliminating post-discharge assistance to patients.  One safety-net hospital is even considering discontinuing providing chemotherapy to cancer patients because such drugs are especially expensive and often reimbursed through the 340B program.

These cuts have serious implications both for private safety-net hospitals and for the communities they serve.

Learn more about the cuts private safety-net hospitals face, their implications, and how they might respond to them in this Stateline article.

NAUH Seeks Action on Medicaid DSH, 340B

The National Association of Urban Hospitals has written to leaders of the House and Senate asking them to reverse implementation of Affordable Care Act-mandated cuts in Medicaid disproportionate share hospital (Medicaid DSH) allotments to state and to block implementation of a federal regulation that would reduce Medicare payments to qualified participants in the section 340B prescription drug discount program by 28 percent.

See NAUH’s letter here.

The Continued Need for Medicaid DSH

While the Affordable Care Act has greatly increased the number of Americans with health insurance and reduced the demand for uncompensated care from hospitals, many hospitals still see significant numbers of uninsured patients.

Some of those patients simply have not taken advantage of the health reform law’s creation of easier access to affordable insurance while others live in states that have not expanded their Medicaid programs.

Hospitals that care for especially large numbers of such uninsured patients qualify for Medicaid disproportionate share hospital payments, commonly referred to as Medicaid DSH.  The purpose of these payments is to help these hospitals with the unreimbursed costs they incur caring for such patients.

The Affordable Care Act calls for reducing Medicaid DSH payments to hospitals.  Many hospitals and hospital groups – including the National Association of Urban Hospitals – oppose this cut and are asking Congress to block its implementation.

The Commonwealth Fund recently published a commentary calling for delaying scheduled Medicaid DSH cuts.  Go here to see the article “Keep Harmful Cuts in Federal Medicaid Disproportionate Share Hospital Payments at Bay.”

 

MACPAC Meets

The non-partisan legislative branch agency that advises Congress, the administration, and the states on Medicaid and CHIP-related issues met recently in Washington, D.C.

The following is the Medicaid and CHIP Payment and Access Commission’s own summary of its meeting.

The December 2017 meeting of the Medicaid and CHIP Payment and Access Commission began with a brief update on the State Children’s Health Insurance Program (CHIP). Although federal funding for the CHIP expired at the end of September, legislation to renew funding was still pending in Congress. The Commission then heard from a panel discussing state tools to manage drug utilization and spending in Medicaid. Panelists included Renee Williams, director of clinical pharmacy services for TennCare; Doug Brown, Magellan Rx Management’s vice president for Medicaid drug rebate management; and John Coster, director of the Center for Medicaid and CHIP Services Division of Pharmacy at the Centers for Medicare & Medicaid Services. At the final morning session, Commissioners reviewed a draft March 2018 report chapter on streamlining Medicaid managed care authorities. The Commission voted to approve recommendations to Congress, but deferred action on a third recommendation for further discussion at its upcoming January 2018 meeting.

In the afternoon, MACPAC staff previewed highlights from the December 2017 MACStats: Medicaid and CHIP Data Book. MACStats pulls together Medicaid and CHIP data from multiple sources that often can be difficult to find. The collection is published annually and individual tables are updated throughout the year. The Commission then reviewed the draft March report chapter on telemedicine in Medicaid, and later in the day the Commission returned to the topic of prescription drugs, to explore potential recommendations on the Medicaid drug rebate program.

The final December sessions covered MACPAC’s annual analysis of disproportionate share hospital payments (a required element of its March reports), and findings from interviews with four states to better understand how they are implementing Section 1115 Medicaid-expansion waivers.

The following presentations, many with supporting documents, were offered during the MACPAC meeting:

  1. State Strategies for Managing Prescription Drug Spending
  2. Review of March Report Chapter: Streamlining Managed Care Authorities
  3. Highlights from MACStats
  4. Review of March Report Chapter: Telemedicine in Medicaid
  5. Potential Recommendations on Medicaid Outpatient Drug Rebates
  6. Review of Draft March Report Chapter: Analyzing Disproportionate Share Hospital Allotments to States
  7. Implementation of Section 1115 Medicaid Expansion Waivers: Findings from Structured Interviews in Four States

NAUH Asks Congress to Block 340B and Medicaid DSH Cuts

Pass legislation blocking cuts in Medicaid disproportionate share payments (Medicaid DSH) and Medicare payments made to qualified providers for prescription drugs under the section 340B prescription drug discount program, NAUH has asked the leaders of the House and Senate.

The 340B cut in question was adopted recently by the Centers for Medicare & Medicaid Services in a Medicare new regulation adopted in the fall.  The Medicaid DSH cut is mandated by the Affordable Care Act but has twice been delayed by Congress.

See NAUH’s letter to congressional leaders here.

NAUH Asks House to Renew CHIP and Delay Medicaid DSH Cuts

In a message sent to every member of the House of Representatives, NAUH conveyed its support for key provisions in HR 3922, the Championing Healthy Kids Act.

Those provisions include renewal of the Children’s Health Insurance Program (CHIP) and a two-year delay in implementation of mandatory cuts in Medicaid disproportionate share (Medicaid DSH) allotments to states.  NAUH asked House members to seek a bipartisan agreement to adopt and pay for these important measures.

See NAUH’s message to House members here.

House Members Seek Delay of DSH Cuts

221 members of the House of Representatives have written to House leaders asking them to delay cuts in Medicaid disproportionate share payments (Medicaid DSH) that are scheduled to begin on October 1.

The cuts, mandated by the Affordable Care Act, have already twice been delayed by Congress, both times for two years, and now, a majority of House members have written to House speaker Paul Ryan and minority leader Nancy Pelosi asking them to advance legislation to delay Medicaid DSH cuts once again.

The purpose of Medicaid DSH payments is to help hospitals that serve especially large numbers of low-income patients to absorb some of the losses they incur serving uninsured and underinsured people.  All private safety-net hospitals receive Medicaid DSH payments and NAUH recently wrote to House members asking them to sign this letter asking Mr. Ryan and Ms. Pelosi.

See the letter to House leaders here and see NAUH’s letter to House members here.

NAUH Urges House to Delay Medicaid DSH Cuts

The House of Representatives should delay the proposed implementation of major cuts in Medicaid disproportionate share (Medicaid DSH) allotments to the states.

The reduction of Medicaid DSH allotments, mandated by the Affordable Care Act, has already been delayed twice by Congress, and now, a bipartisan letter is being circulated among House members asking House Speaker Paul Ryan and House minority leader Nancy Pelosi to move legislation to delay the Medicaid DSH cuts again for another two years.

In its message, NAUH has asked House members to sign onto the letter, which is being circulated by Representatives Eliot Engel (D-NY), John Culberson (R-TX), and Steve Palazzo (R-MS).

All private safety-net hospitals receive Medicaid DSH payments and all consider them a vital source of revenue to help them serve the low-income residents of the communities in which they are located.

Go here to see NAUH’s message to House members.

NAUH Comments on Proposed Cut of Medicaid DSH Payments

NAUH has expressed its opposition to a proposed change in how the federal government allocates Medicaid disproportionate share (Medicaid DSH) funding to states.

In a formal comment letter to the Centers for Medicare & Medicaid Services, which proposed the change in state Medicaid DSH allotments, NAUH wrote that it opposed CMS’s proposed division of the cuts between so-called “low-DSH states” and “non-low-DSH states,” maintaining that non-low-DSH states would, under the CMS proposal, bear too great a share of the overall reductions of state Medicaid DSH allotments.

The Affordable Care Act requires a reduction of federal Medicaid DSH spending based on the expectation that improved access to health insurance would result in fewer uninsured Americans – as it has.  For the past several years Congress delayed implementation of this requirement but its most recent delay expires in 2018 and in July CMS published a proposed rule outlining how it would implement the statutory requirement.

NAUH’s objection is to how CMS proposes implementing that reduction.

See NAUH’s formal comment letter to CMS here.