MFAR is Dead

At least for now.

The controversial Medicaid Fiscal Accountability Regulation, slated for implementation this fall over the objections of many health care stakeholders, will not move forward at this time.

In a tweet earlier this week, Centers for Medicare & Medicaid Services Administrator Seema Verma wrote that

We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study.  Therefore, CMS is withdrawing the rule from the regulatory agenda.

If implemented, opponents maintained, the regulation would have:

  • Deprived states of important, established policy-making prerogatives.
  • Created major new administrative burdens for state governments and hospitals.
  • Inappropriately regulated financing of the state share of Medicaid spending.
  • Introduced new, unspecified standards for state Medicaid programs.

While CMS maintained that MFAR would have enhanced the transparency of state Medicaid programs, the rule’s opponents maintained that it could lead to a major reduction of resources for serving the Medicaid population.

NASH was among those opponents, arguing that the regulation could have hurt private safety-net hospitals and others that serve low-income communities by inappropriately regulating how states can finance their Medicaid programs.  CMS proposed the rule last November and  submitted formal comments expressing its opposition in January and endorsed legislation to prohibit the rule’s implementation in July.

It is worth noting that in “withdrawing the rule from the regulatory agenda,” Verma did not preclude the possibility of reintroducing MFAR at some point in the future.

Learn more from article “Trump administration backing off Medicaid rule that states warned would lead to cuts” in the online publication The Hill.

 

Medicaid Enrollment on the Rise

More people are enrolling in Medicaid, and much of the increase is driven by the COVID-19 emergency.

Or so reports the organization Families USA in a new study.

According to the study,

Over half of the 38 states reporting monthly enrollment through May or later have seen greater than 7% growth in enrollment since February. For the eight states reporting August enrollment, their average enrollment growth since February is approximately 11%.

But the implications are even greater, according to the analysis, which found that in large part because of COVID-19 job loss,

Medicaid enrollment among the 38 states reporting has already increased by 4.3 million people and is poised to increase much more in the near future. Analysis by Health Management Associates projects that up to 27 million people will lose their job-based insurance this year and that Medicaid will see an increase in enrollment of up to 18 million people by the end of 2020, depending on the severity of the economic downturn.

Growing numbers of Medicaid patients can pose a challenge for many private safety-net hospitals because of the inadequacy of the reimbursement they receive from many state Medicaid programs.

Learn more in the Families USA report “Rapid Increases in Medicaid Enrollment: A Review of Data from Six Months.

Eliminate Medicaid DSH Cut, NASH Asks Congress

A Continuing Resolution to fund the federal government in FY 2021 should eliminate a cut in Medicaid disproportionate share (Medicaid DSH) allotments to the states, the National Alliance of Safety-Net Hospitals has written in a letter to congressional leaders.

The cut was mandated by the 2010 Affordable Care Act but has never been implemented.

In its letter to congressional leaders, NASH wrote that

The Medicaid DSH cut was predicated on the expectation that the Affordable Care Act would greatly reduce the number of uninsured Americans, and while it has, millions remain uninsured. Just this week the Centers for Disease Control and Prevention reported that the number of Americans without health insurance rose in 2019 – for the third consecutive year – and the job loss associated with COVID-19 is expected to continue this trend in 2020. As a result, private safety-net hospitals and others like them, serving communities with large numbers of low-income and uninsured residents, have never needed the resources afforded by Medicaid DSH more than they do today. Congress has always questioned the wisdom of this cut and has never allowed those cuts to go into effect. The most recent delay expires after November 30.

Learn more from NASH’s Medicaid DSH letter to congressional leaders.

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s September agenda were:

  • the coronavirus pandemic and Medicare
  • context for Medicare payment policy
  • report on the Protecting Access to Medicare Act of 2014’s changes to the Medicare clinical laboratory fee schedule
  • expansion of telehealth in Medicare
  • Medicare coverage for vaccines

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.  Because so many patients of private safety-net hospitals are insured by Medicare, MedPAC’s deliberations are especially important to those hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

NASH Asks Congress to Help Prevent Attempt to Undermine 340B

Pharmaceutical companies are attempting to prevent safety-net hospitals and others from receiving the full benefits of the section 340B prescription drug discount program and the National Alliance of Safety-Net Hospitals is asking members of the House of Representatives to sign a congressional letter to Health and Human Services Secretary Alex Azar asking to him intervene and stop the pharmaceutical companies.

In asking members of Congress to sign onto the bipartisan letter, NASH notes that

The 340B program is essential for private safety-net hospitals and others like them throughout the country, enabling them to obtain discounts on prescription drugs they dispense on an outpatient basis to qualified, low-income patients.  The program greatly enhances the ability of hospitals to serve their low-income patients and does not cost taxpayers a single dime, but in recent weeks several pharmaceutical companies have taken steps to prevent hospitals from receiving the prescription drug discounts that Congress clearly intended when it created the 340B program nearly 30 years ago.

Learn more about the 340B problem and what NASH and others are asking Secretary Azar to do to help in this NASH message to members of Congress.

 

CMS Finalizes FY 2021 Payments to Hospitals

Medicare has announced how it will pay hospitals for inpatient care in FY 2021 with publication of its annual inpatient prospective payment system regulation last week.

Among the changes announced by the Centers for Medicare & Medicaid Services:

  • A 2.9 percent increase in fee-for-service inpatient rates.
  • A compromise on its proposal to require hospitals to report their payer-specific negotiated rates with Medicare Advantage plans.
  • Changes in how Medicare will calculate Medicare disproportionate share (Medicare DSH) uncompensated care payments.
  • A much smaller cut than originally proposed in the pool of funds for Medicare DSH uncompensated care payments.  Medicare DSH uncompensated care payments are especially important to private safety-net hospitals.
  • Minor adjustments in the Medicare area wage index system.
  • Refinements in the Medicare graduate medical education program.
  • A new DRG for CAR T-cell payments and a new pathway to Medicare add-on payments for FDA-approved antimicrobial products.

Learn more from CMS’s fact sheet or see the final regulation itself.

340B Benefits in Jeopardy?

340B discounts appear to be in jeopardy as pharmaceutical companies make it more difficult for qualified hospitals to get access to discounted prescription drugs.

One pharmaceutical company reportedly will stop offering discounted drugs to contract pharmacies; another proposes limiting sales of certain medications; and yet others may require claims from contract pharmacies.

Providers that serve especially high proportions of low-income patients are eligible to participate in the 340B program, which provides discounts on prescription drugs that they dispense to outpatients.  Most private safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.  NASH has urged Congress to protect the program, doing so most recently in this July letter to Senate leaders.

Learn more about the challenges providers face in ensuring their continued access to discounted prescription drugs for their low-income patients in the Fierce Healthcare article “Drugmakers getting bolder in fight over 340B drug discounts.”

NASH Asks HHS for Provider Relief Fund Money for Private Safety-Net Hospitals

The federal government should direct CARES Act Provider Relief Fund money specifically to private safety-net hospitals, NASH wrote in a letter to Health and Human Services Secretary Alex Azar and Centers for Medicare & Medicaid Services Administrator Seema Verma.

Some private safety-net hospitals, NASH noted in its letter, have not received assistance from any targeted Provider Relief Fund distributions.  To rectify this, NASH urged administration officials to “…designate a portion of the remaining Provider Relief Fund money for this purpose…” and to distribute that money to

…hospitals eligible for the section 340B prescription drug discount program or those with a DSH patient percentage high enough to meet the threshold for 340B eligibility for disproportionate share hospitals and did not receive funding from any other targeted safety-net distribution.

See NASH’s letter here.

Loan Repayment Looms for Hospitals

Unless Congress intervenes, hospitals will soon begin repaying massive federal loans they received to help them cope with the COVID-19 public health emergency.

The loans, authorized by the federal CARES Act, were made through the Accelerated and Advance Loan Program, and in all, Medicare made nearly $100 billion in such loans to providers.  Under the legislation, Medicare was to begin recouping the loans 120 days after hospitals received them, with recoupment coming by Medicare ceasing to pay hospitals’ Medicare claims until the full amount of the loan was repaid.

Now the loans are coming due but hospitals are saying they are not ready to forego all of their Medicare revenue.

While some hospital groups have asked for 100 percent forgiveness for the loans, others are calling for a combination of extending the payback period and reducing the interest rate for those that fail to complete repayment in a timely manner.

In a letter to Senate leaders last month on behalf of private safety-net hospitals, NASH wrote that it

… urges you to forgive the federal Medicare revenue advanced to hospitals through the CARES Act’s Accelerated and Advance Payment Program. Because of the unprecedented length and persistence of this public health emergency, we believe many hospitals – especially safety-net hospitals – will never recover the revenue we have lost in recent months. Most of us expect to be able to restore financial equilibrium, but we will not be able to do so if we have this enormous debt hanging over our heads.

Both House Democrats’ HEROES Act and Senate Republicans’ HEALS Act attempt to address the loan situation – albeit in different ways – but neither calls for forgiving the loans entirely.

Learn more about the challenges hospitals face with their obligation to repay Accelerated and Advance Loan Program money and how Congress is looking at that challenge in this Washington Post article.

Feds Propose Changing Medicare DSH Calculation

Medicare DSH payments would reflect hospitals’ Medicare Advantage inpatient days under a new regulation proposed by the Centers for Medicare & Medicaid Services.

Under the newly proposed rule, the formula for calculating Medicare disproportionate share payments would incorporate hospitals’ Medicare Advantage inpatient days and not just their fee-for-service inpatient days.

Medicare DSH payments are made to hospitals that serve especially high proportions of low-income and uninsured patients and are intended to help them with the cost of providing those services.  All private safety-net hospitals qualify for Medicare DSH payments and consider the program an essential tool in their efforts to serve their communities.

The National Alliance of Safety-Net Hospitals will review the proposed regulation and model its potential impact on private safety-net hospitals.  As appropriate, NASH also will submit formal comments to CMS.

Go here to see the proposed regulation.