MACPAC: Let’s “hit the pause button” on Medicaid Work Requirements

The non-partisan legislative branch agency that advises Congress and the administration on Medicaid issues will ask the administration to delay approving any more state Medicaid work requirements.

That was the decision reached by the Medicaid and CHIP Payment and Access Commission when it met last week.

MACPAC warned that the work requirement currently being implemented in Arkansas, the first state to introduce such a requirement, is flawed and needs further work before moving forward.  The agency also believes the federal government should increase its oversight of new Medicaid work requirements before additional states begin implementing similar, already-approved Medicaid work requirements.

MACPAC plans to convey its concerns in a letter to Department of Health and Human Services Secretary Alex Azar.

Medicaid work requirements pose a potential challenge for private safety-net hospitals because they could leave meaningful numbers of low-income residents of the communities those hospitals serve without health insurance.

Learn more about MACPAC’s objections to the manner in which Medicaid work requirements are being introduced in this Bloomberg Law article.

 

House Members Protest Site-Neutral Payment Proposal

138 members of the House of Representatives have written to Centers for Medicare & Medicaid Services administrator Seema Verma to protest CMS’s proposal to extend Medicare outpatient site-neutral payment policies to off-campus, provider-based outpatient departments specifically exempted from such policies by Congress under the Bipartisan Budget Act of 2015.

In questioning CMS’s rationale for the proposed policy, the House members wrote that

It is unclear how CMS has deemed all of the OPD [outpatient department] services at the grandfathered off-campus HOPDs [hospital outpatient departments] as cause of an unnecessary increase in volume of OPD services, and we ask you to provide clarity on this when making these payment changes.

The House members also wrote that

The agency has also proposed cutting payment to 40 percent of the current HOPD rate for grandfathered off-campus HOPDs that begin to furnish a new service from a clinical facility not offered prior to November 1, 2015 which could unfairly penalize grandfathered off-campus HOPDs that expand or diversify the critical services they offer to meet the changing needs of their patients.

In a formal response to the proposed regulation, NAUH expressed much the same sentiment, maintaining that the regulation, if adopted, could detract from the ability of private safety-net hospitals to serve their communities. See that letter here.

Go here to see the House letter.

“Public Charge” Proposal Raises Potential Issues for Safety-Net Hospitals

A proposal by the Department of Homeland Security could make it more difficult for some immigrants to stay in the U.S. permanently by scrutinizing more closely whether they might become a “public charge” if they remain in the country and rejecting those who appear likely to do so.

By “public charge” the draft Homeland Security regulation refers to people who might depend or come to depend heavily on government assistance if they remain in the country.

If implemented, such a regulation might discourage immigrants from enrolling in government health care programs, which could endanger their health and make it more difficult for urban safety-net hospitals to serve their communities, many of which have large numbers of immigrants.  The regulation also might encourage some people to drop out of government programs that provide services they need.

NASH is concerned about the potential impact of this regulation on private safety-net hospitals and intends to submit formal comments about the proposal.  Comments are due by mid-December.

To learn more about the proposed regulation, see this Washington Post article or go here to see proposed regulation itself.

Hospitals Ask Congress to Protect 340B Program

The leaders of more than 700 hospitals and health systems have written to congressional leaders to ask them to protect the section 340B prescription drug discount program.

The letter states that

 We are concerned about recent regulatory actions that have reduced the reach of this vital program and by legislative proposals that would undo more than two decades of bipartisan work to preserve the health care safety net.

The letter explains that

 In 2015, 340B hospitals provided $26 billion in uncompensated and unreimbursed care to low-income and rural patients in need. That represented 60 percent of all such care delivered in the U.S. even though our hospitals comprise only 38 percent of all acute care hospitals operating in our country. Because of the savings from 340B, we are able to offer vital but often money-losing services including obstetrics, trauma care, opioid addiction treatment, and HIV/AIDS care. In many rural communities, 340B savings are the difference between hospitals staying open and closing. We do all of this without using taxpayer dollars.

And

Efforts to reduce the scope of the 340B program would not reduce the cost of prescription drugs in the U.S. and would weaken nonprofit hospitals’ ability to serve patients who often have nowhere else to turn.

NAUH has long advocated protecting the 340B program, writing to Congress to express this view on many occasions, and most recently, earlier this year.

Go here to see the complete letter from the more than 700 hospitals and health systems.

Senators Ask CMS to Back Off Medicare Outpatient Proposal

Nearly half of the members of the Senate have written to CMS asking the agency to withdraw its proposal to make more Medicare outpatient payments on a site-neutral basis.

In the letter, 48 senators note that in the 2015 Bipartisan Budget Act Congress specifically directed that CMS grandfather certain existing hospital-based off-campus outpatient facilities from CMS efforts to make more outpatient payments on a site-neutral basis.  The proposed regulation, however, would affect those very facilities.

NAUH made much the same point in its September letter to CMS expressing its opposition to this aspect of the agency’s proposed 2019 outpatient prospective payment system regulation.

Go here to see the senators’ letter to CMS.

 

Medicare Site-Neutral Outpatient Payment Proposal Would Have Disproportionate Impact

The Centers for Medicare & Medicaid Services’ proposal to make more Medicare outpatient payments on a site-neutral basis would significantly cut Medicare’s overall outpatient spending but most of that cut would be borne by just a few hospitals.

A report prepared for the Integrated Health Care Coalition concluded that

…CMS’ Off-Campus Site-Neutral Proposal in the FY 2019 CMS OPPS [note:  outpatient prospective payment system] NPRM [note:  notice of proposed rulemaking] will disproportionate affect about six percent of 3,333 hospitals that participate in the program.  200 hospitals will shoulder 73 percent of the proposed payment reductions….For the top 200, the average reduction will be 5.5 percent.  For the remaining hospitals, the reduction will be 0.5 percent.

Last month NAUH conveyed its strong opposition to this proposal in a formal comment letter to CMS.

Learn more about the CMS proposal and its potential implications in this story in Becker’s Hospital Review or go here to see the complete analysis.

New Approach to Readmissions Program Takes Effect

Medicare’s hospital readmissions reduction program is moving in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals.

The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group.

As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 while the average penalty for hospitals serving the fewest low-income patients will rise.

NAUH was one of the leading proponents of this major change in how the readmissions reduction program treats hospitals.

Kaiser Health News has published a detailed story describing the policy change and its implications for hospitals, which face penalties of up to three percent of their Medicare revenue for what is considered “excessive” readmissions of Medicare patients within 30 days of their discharge from the hospital.  Included in the article is a searchable database of every hospital in the country that lists the peer group for each hospital, its FY 2018 and FY 2019 readmissions penalties by percentage of Medicare revenue, and the change in readmissions penalty expected from FY 2018 to FY 2019.  Go here to see the article “Medicare Eases Readmission Penalties Against Safety-Net Hospital.”

New Approach to Readmissions Program to Take Effect October 1

Medicare’s hospital readmissions reduction program will move in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals.

The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group.

As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 while the average penalty for hospitals serving the fewest low-income patients will rise.

NAUH was among the loudest and most persistent voices calling for reform of the program to better reflect the special challenges private safety-net hospitals face in working to prevent the readmission of their low-income Medicare payments to the hospital.

Kaiser Health News has published a detailed story describing the policy change and its implications for hospitals, which face penalties of up to three percent of their Medicare revenue for what is considered “excessive” readmissions of Medicare patients within 30 days of their discharge from the hospital.  Included in the article is a searchable database of every hospital in the country that lists the peer group for each hospital, its FY 2018 and FY 2019 readmissions penalties by percentage of Medicare revenue, and the change in readmissions penalty expected from FY 2018 to FY 2019.  Go here to see the article “Medicare Eases Readmission Penalties Against Safety-Net Hospital.”

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met recently in Washington, D.C. to review a number of Medicaid- and CHIP-related issues.

MACPAC members heard presentations on and discussed the following issues:

Find outlines of these subjects and additional materials by clicking the links above and go here for a transcript of the two days of public meetings.

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.  While its recommendations are binding on neither the administration nor Congress, MACPAC’s work is highly influential and often finds its way into future Medicaid and CHIP policy.  Because private safety-net hospitals serve so many Medicaid and CHIP patients, they have an especially major stake in MACPAC deliberations and recommendations.

 

HHS Chief Says 340B Changes are Coming

Health care providers and drug manufacturers should expect changes in the section 340B prescription drug discount program in the near future.

That was the message conveyed by Health and Human Services Secretary Alex Azar during a recent conference held by the 340B Coalition.

The 340B program, which provides discounts on the prescription drugs dispensed on an outpatient basis by eligible providers to their low-income patients, has become increasing controversial in recent years as it has expanded and pharmaceutical companies have objected to the discounts they must provide.

Among the changes Azar suggested are coming are greater accountability among participating hospitals for how they use the savings they derive from the discounts and a narrowing of the difference between the prices hospitals pay for the drugs and their average sales price, which Azar said is currently too great.  CMS recently imposed a 28 percent reduction of Medicare payments to participating providers for drugs dispensed to 340B-qualified patients.

To qualify for participation in the program, providers must serve especially high proportions of low-income patients.  Most private safety-net hospitals participate in the program.

Learn more about Secretary Azar’s comments from this Healthcare Dive article.