Supreme Court Paves Way for Public Charge Regulation

The revised public charge regulation that will make it more difficult for some immigrants to come to the U.S. will be implemented after the Supreme Court lifted preliminary injunctions issued by lower courts that delayed the regulation’s implementation.

Under revisions of the public charge regulation introduced last year, individuals seeking entry into the U.S. and green cards who do not appear to be financially independent or have employment commitments can be denied entry if they will be dependent on means-tested public aid programs such as Medicaid or food stamps or even if they, or members of their family, appear likely to become dependent on such aid in the near future.

A number of judges throughout the country blocked the administration’s implementation of revisions of the public charge rule.  The Supreme Court’s action only lifts those injunction; it does not address the constitutionality of the regulation, leaving that matter to continue to be addressed by lower courts for now.

The challenge posed to health care providers by the updated public charge regulation is as much a matter of perception as reality:  individuals already legally in the U.S. who are not subject to the regulation have withdrawn from Medicaid out of fear of deportation while others who also are in the country legally and qualify for Medicaid are choosing not to apply for benefits for the same reason.  This, in turn, may leave some providers with more uncompensated care instead of Medicaid reimbursement for the care they provide to some of their patients.

The National Alliance of Safety-Net Hospitals has conveyed its opposition to the public charge regulation to both Congress and the administration.  In a message to Congress, NASH wrote that “The new public charge regulation threatens the health of families and communities and threatens the ability of private safety-net hospitals to serve those families and those communities.”  In response to the proposed changes in the regulation, NASH wrote in a formal comment letter on behalf of private safety-net hospitals that it

…believes the proposed regulation could have a chilling effect on the willingness of many legal citizens and legal non-citizens to seek out government health care programs for which they legally qualify. This could lead to millions of low-income legal citizens and legal non-citizens choosing not to seek the care to which they are entitled by law and ignoring serious illnesses and injuries until they become a crisis. When such individuals have no choice but to turn to hospital emergency departments in search of care – something hospital emergency departments are required by law to provide regardless of a patient’s ability to pay – this could overwhelm those facilities and would do so to the detriment of other patients while also producing a surge of uncompensated care, especially for private safety-net hospitals. That, in turn, could jeopardize the jobs of thousands who work in those hospitals and the economies of the communities in which those hospitals are located. It could also jeopardize access to care for residents of these same communities – including ordinary people who receive their health care coverage from private insurers and Medicare.

See NASH’s entire comment letter here.

Learn more about the Supreme Court’s decision and how it affects implementation of the public charge regulation in the New York Times article “Supreme Court Allows Trump’s Wealth Test for Green Cards.”

 

Fitch: Medicaid Block Grants, MFAR Threaten States, Providers

Medicaid block grants and the proposed Medicaid fiscal accountability regulation (MFAR) pose new financial threats to providers and states, according to Fitch Ratings, the financial rating company.

MFAR poses the greater threat, Fitch believes, noting in a new analysis that it could

…reduce total Medicaid spending nationally by $37 billion and $44 billion annually…and by $23 billion to $30 billion for hospitals alone.  States, and to some extent providers, would respond to MFAR’s implementation with measures to mitigate the negative fiscal implications.

Block grants, through what has been named the Healthy Adult Opportunity program, also pose a threat, with Fitch explaining that

Capping federal Medicaid contributions, even for a subset of beneficiaries, poses risks to state budgets and those entities reliant on state funding, including local governments and providers.  States would need to find revenue or cost savings, either in Medicaid or elsewhere, to offset reduced federal contributions.

Because private safety-net hospitals care for more Medicaid patients than the typical hospital, both proposed policy changes have a potentially greater impact on them.

Last month NASH conveyed its opposition to the proposed MFAR regulation in a formal comment letter to the Centers for Medicare & Medicaid Services in response to the regulation’s publication late last year.  While NASH has not commented publicly about the Healthy Adult Opportunity program, it has long been concerned about a block grant approach to Medicaid funding, writing in its 2019 advocacy agenda 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 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 the potential impact of the proposed Medicaid fiscal accountability regulation and Medicaid block grants in the Fitch Ratings analysis “Fitch Rtgs: Medicaid Changes Will Affect States, NFP Healthcare Providers.”

NASH Raises Concerns About Proposed Budget in News Release

Medicare and Medicaid cuts detailed in the administration’s proposed FY 2021 budget could be harmful to private safety-net hospitals, the National Alliance of Safety-Net Hospitals declared in a news release issued in response to that proposed budget.

Among those cuts:  $465 billion in Medicare payments and $920 billion in Medicaid reductions over the next ten years.

“The extent of the proposed spending cuts is daunting,” said Ellen Kugler, NASH’s executive director.  “The payments that have been targeted for the biggest cuts are the very payments that enable safety-net hospitals to provide vital services to their communities.  Without them, the capacity of private safety-net hospitals across the country to continue serving the low-income, low-income elderly, uninsured, and medically vulnerable residents of their communities could be in serious jeopardy.”

Among the payments targeted for major cuts are Medicare disproportionate share (Medicare DSH), Medicaid disproportionate share (Medicaid DSH), Medicare graduate medical education payments, Medicare bad debt reimbursement, and payments for some Medicare-covered outpatient services.

Learn more about NASH’s objections to the proposed cuts in this NASH news release.

Implications of Medicaid Block Grants

States will be able to pursue new Medicaid block grants under guidance recently sent by federal regulators to state Medicaid directors.

But what does that mean?

In a new article, the Commonwealth Fund examines how the Centers for Medicare & Medicaid Services’ Medicaid block grants will work (for states that choose to pursue them; they are not mandatory), the new flexibility block grants will give states, and how the new approach will give states some relief from CMS oversight and delivery system requirements.

Because private safety-net hospitals care for more Medicaid patients than the typical hospital, such a major change in Medicaid policy has a potentially greater impact on them.

Learn more from the Commonwealth Fund article “What Does New Block Grant Guidance Mean for the Medicaid Program?” and by going directly to the source:  the guidance letter CMS sent to state Medicaid directors explaining in detail how Medicaid block grants will work.

Not Surprisingly, Higher Medicaid Rates Improve Access

Higher Medicaid payments for substance abuse disorder treatment lead to better access to such treatment, a new report by the U.S. Government Accountability Office has concluded.

According to the study, which focused on six states,

State officials and SUD [substance abuse disorders] providers in the selected states with larger rate changes reported greater effects on SUD service availability compared to those in states with smaller changes. For example, state officials said that larger rate increases helped increase the number of SUD providers participating in Medicaid, but did not generally note SUD service availability effects for smaller rate increases.  Providers in selected states identified certain factors, such as Medicaid program requirements, that could affect how much the availability of SUD services increased or decreased following rate changes.

The communities served by private safety-net hospitals often have larger numbers of residents with substance abuse disorders than most communities, making this a major challenge for such hospitals.

Learn more about how Medicaid rates affect access to substance abuse disorder services in the new GAO report Medicaid:  States’ Changes to Payment Rates for Substance Use Disorder Services.

 

NASH Unveils 2020 Advocacy Agenda

The National Alliance of Safety-Net Hospitals has published its 2020 advocacy agenda.

To advance the interests of private safety-net hospitals, in the coming year NASH will:

  • Continue to address the major policy challenges of 2019 that had not been resolved as that year ended:  an extended delay of Medicaid disproportionate share (Medicaid DSH) cuts, surprise medical bills, and prescription drug prices.
  • Respond to administration-driven policies such as the calculation of Medicare disproportionate share (Medicare DSH) payments, reduced payments for prescription drugs under the 340B prescription drug discount program, and efforts to reduce Medicaid eligibility and benefits and to limit the means through which states may finance their share of Medicaid payments.
  • Respond to expected judicial decisions addressing the extension of site-neutral Medicare outpatient payments to additional outpatient settings and the implementation of a new public charge regulation.

For a more detailed look at NASH’s advocacy plans for the coming year, see its complete 2020 advocacy agenda.

NASH Urges CMS to Withdraw Medicaid Fiscal Accountability Regulation

CMS should withdraw its proposed Medicaid fiscal accountability regulation, NASH wrote in formal comments in response to the proposed regulation.

In its comment letter, the National Alliance of Safety-Net Hospitals wrote that

While NASH supports greater transparency in Medicaid, that support is outweighed by too many troubling aspects of the proposed regulation.

Specifically, NASH told CMS that the proposed regulation would:

  • deprive states of important, established policy-making prerogatives;
  • create major new administrative burdens for hospitals, state governments, and federal regulators;
  • inappropriately regulate how states finance their share of their Medicaid spending;
  • introduce new, unspecified standards for state Medicaid programs; and
  • violate the federal Administrative Procedures Act.

Learn more by reading NASH’s complete formal comment letter to CMS in response to the agency’s proposed Medicaid fiscal accountability regulation.

 

CMS Introduces New Approach to Medicaid Block Grants

States would be able to convert part of their Medicaid programs into block grants under a new program introduced by the federal government.

The program, which the Centers for Medicare & Medicaid Services calls “Healthy Adult Opportunity,” would encompass services only for adults under the age of 65 who are not eligible for Medicaid because of disability or the need for long-term care, services, and supports and who are not otherwise eligible for the pre-Affordable Care Act Medicaid program.

Under the program, states can develop either a total expenses model or per enrollee model for their block grants and would have expanded opportunities to introduce co-pays and deductibles, impose work requirements, expand eligibility criteria, and waive retroactive coverage and hospital presumptive eligibility requirements.  To save on the cost of prescription drugs, they would be empowered to implement limited drug formularies.

The new program appears to be targeting states that did not expand their Medicaid programs under the Affordable Care Act.  It also appears to be CMS’s attempt to introduce the block grant concept in a limited way in the hope that it will be successful and lead to demand to expand block grants to the entire Medicaid program and not just the Medicaid expansion population.

In the past NASH has viewed Medicaid block grants with a degree of skepticism, maintaining that its possible support or opposition to them would be based on how a block grant program is structured and how new block grants might affect the ability of private safety-net hospitals to serve their communities.

Learn more about CMS’s new Healthy Adult Opportunity program in this CMS news release, this fact sheet, and a letter the agency sent to the nation’s state Medicaid directors.

 

Supreme Court Lifts Public Charge Rule Ban

The U.S. can now reject visa and green card applicants based on their financial prospects after a new Supreme Court ruling this week.

This ruling has potential long-term implications for health care providers.

Last August a new Department of Homeland Security regulation took effect that authorized the federal government to reject immigrants’ applications for visas and green cards if their financial situation and employment prospects suggested that they might become a “public charge” and dependent on government safety-net programs like Medicaid and food stamps.  A number of groups sued to prevent the rule’s implementation and federal courts imposed an injunction against its enforcement but now the Supreme Court has lifted the last of these injunctions.

The Supreme Court’s ruling, however, did not address the merits of the public charge rule.  Instead, the court concluded that the lower courts that imposed the injunctions had overstepped their authority.  As a result, lower courts will continue to hear individual suits challenging the rule.  Meanwhile, the State Department and Department of Homeland Security will enforce it.

In 2019 the State Department rejected 12,000 visa applications.  In 2016, it rejected only 1000.

The public charge regulation poses a challenge to health care providers amid anecdotal evidence that some immigrants who already are in the U.S. legally and were enrolled in Medicaid withdrew from the program and others who also are in the U.S. legally and are eligible for Medicaid are choosing not to apply for benefits out of a mistaken fear that they or members of their families could be deported.  Over time these practices, if they continue, could leave health care providers with more unpaid bills and a greater uncompensated care burden as they care for individuals who are qualified for Medicaid but decline to enroll in the program and cannot pay their medical bills.

Implementation of the public charge regulation may prove especially challenging for private safety-net hospitals located in areas with large numbers of low-income immigrants.  These hospitals could be at risk for rising amounts of uncompensated care.

Learn more about the public charge issue, the Supreme Court’s decision, and what might happen next in the New York Times article “Supreme Court Allows Trump’s Wealth Test for Green Cards.”

340B Doesn’t Drive Up Hospital Drug Spending, MedPAC Says

Hospitals do not prescribe more expensive drugs because they know the 340B program will help pay for them.

That is the conclusion drawn in a recent analysis by the Medicare Payment Advisory Commission.

Prescription drug spending has risen markedly in recent years and the pharmaceutical industry maintains that part of that increase can be attributed to hospitals that participate in the section 340B prescription drug discount program, which requires pharmaceutical companies to give discounts to hospitals and other selected providers that care for especially large numbers of low-income patients.

A new analysis by the Medicare Payment Advisory Commission, however, concludes that any such effect is minimal.

340B discounts are available for qualified patients receiving drugs on an outpatient basis, and the program’s greatest costs are associated with drugs to treat cancer.  MedPAC found that prescribing decisions “appears to be specific to the type of cancer” and concluded that “…we are unable to attribute these findings to incentives created by 340B discounts” and that “Overall effects on cost sharing for cancer patients is likely to be small, if any, depending on cancer and the patient’s supplemental coverage.”

MedPAC warns that the empirical evidence underlying its analysis was limited.

Most private safety-net hospitals participate in the 340B program and consider it a vital resource in helping them serve their many low-income patients.

Learn more about the impact of the 340B program on the drugs prescribed by participating hospitals in the Becker’s Hospital Review article “340B has minimal effect on health spending, study finds” and the MedPAC presentation “Congressional request on health care provider consolidation: Does the 340B program create incentives for participating hospitals to use more expensive drugs?