800 Hospitals Face Medicare Penalties

800 hospitals will see their Medicare payments reduced one percent this year because they are among the 25 percent of hospitals in the U.S. with the highest rate of hospital-acquired conditions.

Among the 800 hospitals are 110 that are being penalized for the fifth year in a row.

Medicare’s hospital-acquired condition reduction program tracks a variety of medical problems, including infections, blood clots, sepsis, hip fractures, bedsores, and others.  Every year, the 25 percent of eligible providers – the program excludes significant numbers of hospitals – are penalized even if their performance for hospital-acquired conditions is superior to the previous year.

Critics of the program say it creates unachievable goals and  penalizes hospitals that are doing an excellent job of reducing hospital-acquired conditions and that there is virtually no statistical difference in performance between some hospitals that are and some hospitals that are not penalized.  Program proponents maintain that all hospitals can and should do an even better job than they already are of reducing their patients’ hospital-acquired conditions.

NASH has long been concerned about the degree to which private safety-net hospitals are at a disadvantage in such programs because of the disproportionately large numbers of low-income patients they serve who pose special health and socio-economic challenges when hospitalized.

Learn more about Medicare’s hospital-acquired conditions reduction program, the penalties some hospitals face in the coming year, and the arguments for and against the program in the Kaiser Health News article “Medicare Trims Payments To 800 Hospitals, Citing Patient Safety Incidents.”

NASH Introduces New Name

In a news release issued earlier this week, the National Alliance of Safety-Net Hospitals introduced its new name.

The news release also outlines the reasons for the group’s evolution from the National Association of Urban Critical Access Hospitals to the National Association of Urban Hospitals to the National Alliance of Safety-Net Hospitals, defines what constitutes a private safety-net hospital, and offers a broad look at the group’s purpose and objectives.

Read the news release and see NASH’s 2019 policy agenda.

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.

NASH Registers Concerns Over Uncompensated Care Audits

The process the federal government is employing to audit the uncompensated care costs that hospitals report to Medicare is plagued with problems, the National Alliance of Safety-Net Hospitals has written in a letter to the Centers for Medicare & Medicaid Services.

Those problems could result in reduced Medicare disproportionate share hospital payments (Medicare DSH) to private safety-net hospitals in the future, NASH warned in the letter.

According to NASH, problems with the audits of hospitals’ Medicare cost report S-10 worksheets, where they report their uncompensated care, include inconsistencies in the methods auditors are using and the data they demand and unreasonable deadlines for submitting requested supplemental data.

To address these problems, NASH asked CMS to standardize the auditing process and to convey decisions about auditing standards, methodologies, and time frames to hospitals.

In light of these problems, NASH also asked CMS not to use audited data to calculate Medicare DSH uncompensated care payments for FY 2020.

The S-10 audits are so important to private safety-net hospitals because the uncompensated care reported on the S-10 is used in the calculation of participating hospitals’ Medicare DSH uncompensated care payments.  When auditors reduce eligible hospitals’ uncompensated care data, that will result in future reductions of the Medicare DSH payments hospitals receive.  Those Medicare DSH payments play a vital role in helping to underwrite the cost of the care private safety-net hospitals provide to uninsured patients, so any undeserved reduction in those payments could hurt those hospitals and result in reduced access to care in the communities they serve.

Learn more by reading NASH’s letter to CMS about current challenges with uncompensated care audits.

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.

 

Chatter About Medicaid Block Grants Grows

A week after a published report suggested that the Trump administration might be working on a plan to introduce Medicaid block grants, the Washington Post reports that those efforts are under way in earnest.

According to the Post,

A small group of people within the Centers for Medicare and Medicaid Services is working on a plan to allow states to ask permission for their federal Medicaid dollars to be provided in a single lump sum instead of the way they are currently awarded as a percentage of states’ total costs.

While many, including members of Congress, insist that the administration cannot move forward with such a proposal without legislation, others suggest that the administration may offer states the opportunity to participate in Medicaid block grants voluntarily, by seeking a federal waiver.  What remains to be seen is whether the prospect of greater flexibility to shape their own Medicaid programs is sufficient to entice states to participate in an approach that almost certainly would result in less federal money for those programs.

NASH is concerned about the prospect of Medicaid block grants and their potential impact on private safety-net hospitals and addressed this issue in its 2019 advocacy agenda, writing that

If the policy focus shifts from participants to spending, an effort could be undertaken to attempt to introduce a major Medicaid change that has been much-discussed in the past: Medicaid block grants. Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grant continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about what the administration is considering and how policy-makers, industry leaders, and others are reacting to the prospect of a push toward Medicaid block grants from the Washington Post story “The Health 202: The Trump administration is working on Medicaid block grants?

Proposed Public Charge Regulation Causes Confusion in Clinics, Elsewhere

A Trump administration proposal to redefine what constitutes a “public charge” is making life challenging for low-income immigrants and the clinics and other providers to which they turn for Medicaid-covered health care.

The proposed regulation from the Department of Homeland Security would establish new criteria for determining whether a person is a “public charge,” based on their participation in certain public programs, and therefore in jeopardy of losing their legal immigration status.

Some Medicaid patients who come to clinics ask if receiving Medicaid-covered services might jeopardize their legal immigration status; others fail to keep appointments or forego seeking care out of fear of the future implications.  Clinic operators walk a fine line between trying to provide the care their patients need and deciding how to answer patients’ questions honestly but without causing undue alarm.  Some choose not to address the issue at all; others seek to answer patient questions but only when asked; while still others provide information about the situation without being asked – doing so, they realize, at the risk of scaring off some of those patients.

Meanwhile, some legal experts believe that a new standard, if adopted, would not be retroactive and consider Medicaid enrollment prior to the regulation’s adoption.

The result is confusion and concern among providers, legal immigrants enrolled in Medicaid, and advocates.

Last month NASH wrote to the Department of Homeland Security to convey its objections to the proposed legislation, expressing concern about its potential impact on private safety-net hospitals and the patients and communities they serve.

Learn more about the proposed regulation and the challenges providers face as they await a decision on whether it will be implemented in the Kaiser Health News report “Providers Walk ‘Fine Line’ Between Informing And Scaring Immigrant Patients.”

NASH Comments Proposed Medicaid Managed Care Reg

 

The National Alliance of Safety-Net Hospitals has submitted formal comments to the Centers for Medicare & Medicaid Services in response to CMS’s proposed changes in federal Medicaid managed care regulations.

NASH’s letter addressed three aspects of the proposed regulation:  payment rate ranges, directed Medicaid payments, and Medicaid pass-through payments.  The overall theme underlying NASH’s comments was that the proposed changes represent positive steps but could be taken further to provide additional flexibility for state Medicaid programs to take stronger steps to ensure the ability of private safety-net hospitals to serve their communities.

NASH expressed support for CMS’s restoration of the use of actuarial rate ranges in setting Medicaid managed care rates but urged CMS to make those rate ranges even broader or even eliminate them provided that negotiated rates still meet formal criteria for actuarial soundness.

NASH endorsed CMS’s expanded parameters for the use of Medicaid directed payments through managed care but encouraged CMS to expand those parameters even further than it has proposed.

And NASH called on CMS to restore the ability of states to use pass-through payments in Medicaid managed care programs, as they can do through Medicaid fee-for-service programs, so long as those payments remain actuarially sound.  In 2016 a new Medicaid managed care regulation called for the phase-out of such payments over a period of ten years but NASH asked CMS to suspend that phase-out.

Learn more about NASH’s perspective by reading NASH’s comment letter to CMS in response to the proposed Medicaid managed care regulation.

End Run Around Congress for Medicaid Block Grants?

The Trump administration reportedly is considering introducing Medicaid block grants through regulations rather than legislation, according to published reports.

Those reports explain that the administration may seek to offer states an opportunity to apply to the federal government to use Medicaid block grants by obtaining section 1115 Medicaid waivers, a commonly used tool for states seeking exemptions from federal legislative or regulatory requirements.

As reported by the online publication The Hill,

…the Trump administration is now considering issuing guidance to states encouraging them to apply for caps on federal Medicaid spending in exchange for additional flexibility on how they run the program, according to people familiar with the discussions.

Proposals to implement Medicaid block grants have arisen periodically over the past decade but have never gotten beyond the discussion stage because of how difficult it would probably be to gain congressional approval for such a program.  This latest proposal would seek to circumvent that problem by making Medicaid block grants optional for states and permitting those states interested in using them to apply for a Medicaid waiver from Centers for Medicaid & Medicaid Services to do so.

It is not clear whether such an approach would be legal.

NASH has long been skeptical about Medicaid block grants, concerned that the manner in which such block grants are implemented could impose artificial limits on state Medicaid spending that could be especially harmful during economic downturns when Medicaid enrollment typically rises and the demand for Medicaid-covered services falls especially heavily on private safety-net hospitals.  NASH’s advocacy agenda for 2019 addresses this very issue, explaining that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grants continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about this latest proposal in The Hill article “Trump officials consider allowing Medicaid block grants for states.”