Will High Court Help Pave the Way to Higher Medicaid Payments?

In a case that could have nation-wide implications for health care providers, the U.S. Supreme Court will hear an appeal of a lower court decision that ordered the state of Idaho to raise Medicaid payments to providers serving the developmentally disabled because the state’s payments were too low.

gavelWhile litigants in some states have used the courts in recent years to seek redress for what they believed were inadequate Medicaid payments, Supreme Court action on that matter could have national implications:  if the court supports the state of Idaho’s appeal of the order to raise fees it could limit the use of litigation in the future as a means of increasing payments and improving access to care for the Medicaid population.  If, on the other hand, the court rejects the Idaho appeal, it could potentially open the door to more such litigation, especially in states with Medicaid payments that do not even cover the cost of services providers deliver.

The outcome of this case will be of special interest to private safety-net hospitals.  These hospitals care for especially large numbers of Medicaid patients and many are located in states that pay hospitals poorly for Medicaid services.

To learn more about the Idaho case, similar litigation elsewhere, and the implications of the case about to go before the Supreme Court, see this Kaiser Health News report.

IRS Finalizes Standards for Non-Profit Hospitals

irsThe Internal Revenue Service has issued guidance for non-profit hospitals on selected issues that could jeopardize their non-profit status.

As described in a commentary by the U.S. Treasury Department, non-profit hospitals must:

  • Limit charges.  Hospitals may not charge individuals eligible for financial assistance more for emergency or other medically necessary care than the amounts generally billed to patients with insurance (including Medicare, Medicaid, or private commercial insurance).
  •  Establish and disclose financial assistance policies.  Each hospital must establish and widely publicize a financial assistance policy that clearly describes to patients the eligibility criteria for obtaining financial assistance and the method for applying for financial assistance.
  • Abide by reasonable billing and collection requirements.  Charitable hospitals are prohibited from engaging in certain collection methods (for example, reporting a debt to a credit agency or garnishing wages) until they make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy.
  • Perform a community health needs assessment.  Each charitable hospital must conduct and publish a community health needs assessment at least once every three years – and disclose on the tax form it files annually the steps it is taking to address the health needs identified in the assessment.
  • These requirements are in addition to other consumer protections provided by the ACA, including that all hospitals must establish and make public a list of standard charges for items and services.  The Centers for Medicare & Medicaid Services (CMS) issued final rules implementing this provision in August, and encouraged hospitals to make additional efforts to help patients understand how much services may cost and enable them to compare charges for similar services at different hospitals.

The Treasury Department commentary also states that non-profit hospitals are required to:

  • Expand access to translations for patients, by lowering the threshold for having translations of financial assistance policies available from 10 percent of the community served as proposed, to five percent of the community served or population expected to be encountered by the hospital facility, or 1000 persons, whichever is less.
  • Revise the notification requirements to maintain important protections for patients while making it easier for hospitals to comply with them. General notifications regarding a hospital’s financial assistance policy must appear on bills and in the hospital. However, individual written and oral notifications of the hospital’s financial assistance policy are now only required when a hospital plans to use extraordinary collections actions, such as reporting a debt to a credit bureau, selling the debt to a third party or garnishing wages.
  • While charitable hospitals must continue to make a good-faith effort to comply, the rules provide charitable hospitals with adequate time to fully update their policies and programming to implement the changes.

Hospitals that fail to comply with these requirements could have their non-profit status revoked.

Many private safety-net hospitals are non-profit.

To see the Treasury Department’s commentary on the new guidance, go here.  Find the IRS guidance document itself here.

Medicaid Pay Bump Gone in Most States; Will it Affect Access?

The temporary increase in Medicaid provider fees for primary care services ended yesterday, leaving observers to wonder whether it will affect access to care for the nation’s growing Medicaid population.

The increase, mandated by the Affordable Care Act, raised Medicaid primary care rates to the same level as Medicare payments in the hope that more primary care providers would begin serving Medicaid patients in anticipation of significant growth in the Medicaid population.  Now that the two-year increase has ended, it is unclear whether providers who began serving Medicaid patients because of the increase will remain Medicaid providers and those who accepted more Medicaid patients will continue doing so.

iStock_000015640638XSmallBecause of the relatively short duration of the increase, little research has been completed to determine whether the raise made a difference in access, but some states believe it did:  a number will use their own money to continue the raises, which during the two-year experiment were paid entirely by the federal government.

Access to care has long been a major challenge for Medicaid patients in the communities served by most private safety-net hospitals.

Kaiser Health News has taken a look at this issue and the potential implications of the end of the Medicaid pay raise; see its report here.

Medicaid Primary Care Fees to Plummet

Payments to primary care physicians who serve Medicaid patients will fall an average of 42.8 percent beginning next year when the Affordable Care Act’s two-year increase in those payments ends.

In some states – California, Florida, Illinois, New Jersey, New York, and Pennsylvania – they will decline more than 50 percent.

The cuts are even greater than the reductions in Medicare payments that Congress had to intervene to prevent because of the Medicare sustainable growth rate formula (the so-called Medicare doc fix).

The temporary fee increase was included in the Affordable Care Act to attempt to induce more primary care physicians to serve Medicaid patients in anticipation of the significant growth of Medicaid as a result of the reform law’s Medicaid expansion.  Under that law, Medicaid primary care fees were raised to the level of Medicare primary care rates for two years.

So far, 15 states plan to use their own money to prevent the dramatic reduction of Medicaid primary care payments.

The cut will be especially damaging to private safety-net hospitals because they serve so many more Medicaid patients than the typical hospital and often are taking on more of such patients in light of the Affordable Care Act’s Medicaid expansion.

urban instituteLearn more about the upcoming Medicaid payment cut and see a state-by-state summary of the impact of the reduction on each state in the new Urban Institute report Reversing the Medicaid Fee Bump:  How Much Could Medicaid Physician Fees for Primary Care Fall in 2015?, which you can find here, on the Urban Institute’s web site.

Access to Primary Care a Medicaid Problem, HHS OIG Says

hhsOIGMany of the primary care providers that participate in Medicaid managed care programs are inaccessible to those plans’ members, according to a new report by the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG).

As states’ Medicaid rolls grow and they direct more of their Medicaid beneficiaries into managed care plans, those beneficiaries may be encountering difficulty converting their access to health insurance into access to health care.

According to the OIG report Access to Care:  Provider Availability in Medicaid Managed Care,

We found that slightly more than half of providers could not offer appointments to enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients. Among the providers who offered appointments, the median wait time was 2 weeks. However, over a quarter had wait times of more than 1 month, and 10 percent had wait times longer than 2 months. Finally, primary care providers were less likely to offer an appointment than specialists; however, specialists tended to have longer wait times.

In response to these problems, the OIG recommended that the Centers for Medicare & Medicaid Services (CMS) work with states to

… (1) assess the number of providers offering appointments and improve the accuracy of plan information, (2) ensure that plans’ networks are adequate and meet the needs of their Medicaid managed care enrollees, and (3) ensure that plans are complying with existing State standards and assess whether additional standards are needed.

This poses a significant challenge for private safety-net hospitals because they serve so many Medicaid patients.

See the complete OIG report here.

Homelessness and Safety-Net Hospitals

Homeless people with serious medical problems are more likely than others to be readmitted to hospitals – and especially, to safety-net hospitals – during their convalescence from illnesses and injuries.

This is one of the conclusions in the recently published Journal of Community Health Nursing article “Assessing the Needs for a Medical Respite:  Perceptions of Service Providers and Homeless Persons.”

According the study, homeless people lack safe places to convalesce.  Shelters do not suffice, the study found, because they are not open around the clock and lack staff qualified to support recovery.  The homeless also report that their drugs are often stolen in shelters and they are vulnerable to infections while staying in them.

iStock_000001497717XSmallAs a result, many of these patients end up being readmitted to the safety-net hospitals that originally treated them – often, for extended periods of time.  Among others, this poses a real challenge for the country’s private safety-net hospitals because they serve so many more homeless patients than the typical hospital.

In more than 70 cities, respite care facilities have been established to serve the homeless recovering from serious injuries and illnesses.

Learn more about the challenges facing homeless patients and the role safety-net hospitals play in addressing those challenges in this Dallas Morning News story and find the Journal of Community Health Nursing article here.

Feds Release Medicaid DSH “Uninsured” Definition

The Centers for Medicare & Medicaid Services (CMS) has published a new regulation that defines “uninsured” for the purpose of calculating the limit for how much individual hospitals may receive in Medicaid disproportionate share hospital payments (Medicaid DSH).

law booksUnder federal law, Medicaid DSH payments to hospitals cannot exceed the uncompensated costs of the services those hospitals provide to Medicaid recipients and the uninsured.  In calculating hospital-specific limits, according to the new regulation,

… the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage.

This regulation is important to private safety-net hospitals because they receive Medicaid DSH payments and serve more uninsured patients than the typical hospital.

Find the complete regulation here, in the Federal Register.

Does ACA Get Credit for Decline of Premature Birth Rates?

Some advocates believe the Affordable Care Act is responsible for the premature birth rate falling in 2013 to its lowest level in 17 years.

According to the March of Dimes, the premature birth rate fell to 11.4 percent last year, and some people in the field believe the expansion of Medicaid eligibility in many states, which enabled people with incomes of up to 138 percent of the federal poverty level to obtain health insurance and better access to care, most likely played a major role in this positive development.

ultrasoundThe key, advocates believe, is that access to care results in women being in better health before they become pregnant and then receiving prenatal care early in their pregnancies.

This is an especially encouraging development for private safety-net hospitals because they care for more Medicaid patients and are more likely to provide obstetric services than the typical acute-care hospital.

For more information about the decline in the premature birth rate and other health care reform provisions that may contribute to further decline in the coming years, see this Kaiser Health News report.  Find the March of Dimes annual report on premature births here.

No-Hospitalization Group Plans To Be Banned

Companies will no longer be able to provide their employees with group health insurance plans that do not cover inpatient hospitalization.

This news came in a recent notice published by the Internal Revenue Service.

Recently, many large employers with lower-wage workers were purchasing low-cost health insurance that does not cover hospitalization.  The IRS, however, has ruled that such plans do not meet the Affordable Care Act’s minimum value threshold.  Companies were only able to purchase such plans because they are not required meet the reform law’s essential health benefits package requirement, which applies only to plans offered to individuals on health insurance exchanges.

iStock_000014445371XSmallThe no-hospitalization policies were likely to leave many lower-income workers without the coverage they needed – and with large medical bills.  They also were likely to leave hospitals with unexpected uncompensated care.  This could have proven especially challenging for private  safety-net hospitals because they serve larger numbers of lower-income workers than the typical hospital.

The administration is permitting employers that committed to such plans by November 4 to use them for one year and is offering affected workers access to premium subsidies that some of those workers did not otherwise have if they choose to purchase insurance on an exchange instead.

The IRS will issue regulations formalizing this policy next year.

To learn more about this issue and its implications for large businesses, low-wage workers, and hospitals, see this Kaiser Health News report.  Go here to see the IRS notice.

MACPAC Not Yet Sold on Continuing Medicaid Primary Care Pay Increase

The independent federal agency that advises Congress on Medicaid and the Children’s Health Insurance Program is not ready to endorse continuing the Affordable Care Act’s two-year increase in Medicaid primary care fees as a means of encouraging more doctors to serve Medicaid patients.

At its October 30-31 public meeting in Washington, D.C., the staff of the Medicaid and Children’s Health Insurance Program Payment and Access Commission (MACPAC) reported that it has begun looking into the effectiveness of the temporary pay increase in persuading more doctors to care for Medicaid recipients.  Among its preliminary findings are that

  • The payment increase had at best, a modest effect on provider participation according to states and MCOs
  • Most states reported that the provision had no effect on the use of primary care services

macpacConsequently, MACPAC did not offer any recommendations on this issue at the public meeting and intends to continue studying the impact of enhanced Medicaid primary care fees on physician willingness to serve Medicaid patients.

For the two years ending on December 31, 2014, the federal government has paid for 100 percent of the fee increases.  Some states have already decided to continue making the enhanced payments at their own expense, some will make enhanced payments but not necessarily at the level authorized by the Affordable Care Act, and some intend to restore the payments to their previous levels.

Because they serve so many Medicaid patients, this issue is of great importance to private safety-net hospitals.

The MACPAC presentation on Medicaid primary care physician payments can be found here.