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Medicaid DSH Cut Delayed

Scheduled cuts in Medicaid DSH payments to hospitals will be delayed until at least late May under new federal spending legislation.

The cuts in Medicaid disproportionate share allotments to the states, mandated by the Affordable Care Act and delayed several times by Congress – including twice in FY 2020 alone under continuing resolutions to fund the federal government – are among a number of so-called “extenders” included in spending bills passed by Congress this week and sent to the president for his signature.

Authorization for delaying the cut in allotments to the states, which would have resulted in reduced Medicaid DSH payments for many hospitals – including private safety-net hospitals – would expire on May 22.  Congress is expected to address Medicaid DSH, along with surprise medical bills, the price of prescription drugs, and other health care matters, before that time.

NASH has argued against Medicaid DSH cuts for a number of years, doing so most recently in this September 2019 position statement in which it observed that

The conditions that led Congress to believe Medicaid DSH payments could be reduced significantly without harming the health care safety net have not unfolded entirely as anticipated. While many Americans have taken advantage of the Affordable Care Act to obtain health insurance, millions remain uninsured…

NASH also noted that

…any decline now in Medicaid DSH payments could lead to an increase in the provision of charity care, possibly forcing hospitals to reduce services, limit community outreach, and even reduce staff. Such measures could jeopardize access to care not only for hospitals’ uninsured and low-income patients but also for their privately insured, Medicare, and Medicaid patients as well.

Learn more about the delay in Medicaid DSH cuts and other aspects of this recent health care spending legislation in the Becker’s Hospital Review article “Congress unveils $1.3T spending deal: 5 healthcare takeaways.”

 

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met for two days last week in Washington, D.C.

The following is MACPAC’s own summary of the sessions.

The Medicaid and CHIP Payment and Access Commission kicked off its December meeting with highlights from its forthcoming issue of MACStats: Medicaid and CHIP Data Book, due out December 18, 2019. MACStats brings together statistics on Medicaid and State Children’s Health Insurance Program (CHIP) enrollment and spending, federal matching rates, eligibility levels, and access to care measures, which come from multiple sources.

Later the Commission discussed a proposed rule that the Centers for Medicare & Medicaid Services issued in November, which—among other changes—would increase federal oversight of Medicaid supplemental payments. The final morning session addressed payment error rates in Medicaid, with a briefing on the annual Department of Health and Human Services Agency Financial Report (AFR). Fiscal year 2019 was the first time that the AFR incorporated eligibility errors since the Patient Protection and Affordable Care Act’s Medicaid eligibility and enrollment changes took effect in 2014.

After lunch, MACPAC staff summarized themes from expert roundtables convened in November, one to explore Medicaid policy on high-cost specialty drugs and another on the need for more actionable Section 1115 demonstration evaluations. Then, the Commission turned its attention to Medicaid estate recovery policies. The final session of the day looked at issues associated with reforming the current Medicaid financing structure to better respond to economic downturns.

At Friday’s opening session, the Commission considered policy options to increase participation in Medicare Savings Programs, which provide Medicare cost-sharing assistance to beneficiaries who are dually eligible for Medicaid and Medicare. Afterward, the Commission continued its examination of care integration for dually eligible beneficiaries, this time focusing on policy options to reduce barriers to integrated care. The Commission then switched gears for a briefing on a new MACPAC analysis of Medicaid’s role in financing maternity care. The December meeting concluded with a review of the draft chapter for the Commission’s March report to Congress analyzing disproportionate share hospital (DSH) payments.

Supporting the discussion were the following briefing papers:

  1. MACStats: Medicaid and CHIP Data Book
  2. Review of Proposed Rule on Supplemental Payments and Financing
  3. Review of PERM Findings
  4. Themes from Expert Roundtable on Medicaid Policy on High-Cost Drugs
  5. Improving the Quality and Timeliness of Section 1115 Demonstration Evaluations: Themes from Expert Roundtable
  6. Medicaid Estate Recovery Policies
  7. Policy and Design Issues for a Countercyclical Federal Medicaid Assistance Percentage
  8. Medicare Savings Programs Policy Options
  9. Barriers to Integrated Care for Dually Eligible Beneficiaries
  10. Medicaid’s Role in Financing Maternity Care
  11. Review of Draft Chapter on Statutorily Required Analyses of Disproportionate Share Hospital Payment

Because they serve so many Medicaid and CHIP patients – more than the typical hospital – MACPAC’s deliberations are especially important to private safety-net hospitals.

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 variety of issues affecting Medicaid and the State Children’s Health Insurance Program.  Find its web site here.

NASH Conveys End-of-Year Priorities to Congress

Preventing Medicaid DSH cuts, a fair approach to protecting patients from surprise medical bills, and reducing prescription drug costs are among the policy positions that the National Alliance of Safety-Net Hospitals recently shared with Congress.

In its message to Congress, NASH also asked lawmakers to protect 340B prescription drug discounts for private safety-net hospitals and to preserve dedicated funding for community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education.

Learn more about NASH’s end-of-year policy priorities from the message “Protect Safety-Net Hospitals and the Communities They Serve in Upcoming Budget and Legislative Deliberations” that NASH delivered yesterday to all 535 members of Congress.

Prescription Drug Bill Would Kill Two Years of Medicaid DSH Cuts

Two years of Medicaid DSH cuts would be eliminated under a new prescription drug bill released last week by the Senate Finance Committee.

The Prescription Drug Pricing Reduction Act includes a provision that would eliminate two years of Affordable Care Act-mandated cuts in the allocation of federal money to the states for Medicaid disproportionate share hospital payments (Medicaid DSH).  Those cuts have been delayed several times by Congress but were scheduled to begin in October of 2019 and run through federal FY 2025, only to be delayed again twice by continuing resolutions adopted by Congress to fund the federal government in the absence of enacted appropriations bills.

Under this proposal, the first two years of Medicaid DSH cuts would be eliminated entirely and the cut then would take effect from FY 2022 through FY 2025 – only four of the six years worth of cuts anticipated by the Affordable Care Act.

The legislation also would bring other changes to the Medicaid DSH program, including new reporting requirements on the non-Medicaid DSH supplemental payments hospitals receive from their state governments; changes in Medicaid shortfall and third-party payment policies; and a GAO study and report on hospital uncompensated care costs.

All private safety-net hospitals receive Medicaid DSH payments and consider them critical to serving the many Medicaid-covered and uninsured residents of the low-income communities in which they are located.

Go here to see the proposed legislation.

Medicaid DSH Cut Delayed

Cuts in Medicaid DSH payments to hospitals will be delayed for another month after Congress passed, and the president signed, a continuing resolution to fund the federal government through December 20.

A cut in federal Medicaid disproportionate share (Medicaid DSH) allotments to the states is mandated by the Affordable Care Act and has been delayed several times by Congress.  If implemented, Medicaid DSH allotments to the states would be slashed $4 billion in FY 2020 and then $8 billion a year through FY 2025.

Cuts in allotments to the states would result in reductions of Medicaid DSH payments to DSH-eligible hospitals.

Medicaid DSH payments are a vital tool for helping private safety-net hospitals care for the low-income residents of their communities.  All private safety-net hospitals receive such payments.

The current cut is only temporary and expires when the continuing resolution expires after December 20.

MACPAC Posts Meeting Transcript

The Medicaid and CHIP Payment and Access Commission met in Washington, D.C. earlier this month.  The issues on MACPAC’s agenda were:

  • state readiness to report mandatory core set measures
  • analysis of buprenorphine prescribing patterns among advanced practitioners in Medicaid
  • Medicaid’s statistical information system (T-MSIS)
  • Medicaid disproportionate share hospital payment (Medicaid DSH) allotments
  • Medicaid policies related to third-party liability
  • Medicaid and maternal health

A transcript of the MACPAC meeting is now available.  Find it here.

MACPAC Looks at Medicaid DSH

At a time when cuts in Medicaid disproportionate share hospital payments (Medicaid DSH) are still scheduled for the current fiscal year and some in Congress are calling for a new approach to allotting DSH funds among the states, the Medicaid and CHIP Payment and Access Commission has released its annual analysis of Medicaid DSH allotments to the states.

The report includes:

  • data about changes in the uninsured rate
  • demographic information about the uninsured
  • information about the cost of hospital uncompensated care
  • perspectives on hospital Medicaid shortfalls
  • a comparison of hospital uncompensated care costs when calculated using different methodologies
  • data about hospitals that provide “essential community services”
  • information about scheduled Medicaid DSH allotment reductions

All private safety-net hospitals receive Medicaid DSH payments and consider the program an essential tool for serving their communities.

MACPAC will issue a more complete report to Congress in March of 2020.

Learn more about how MACPAC views Medicaid DSH at a time when the program is scheduled to change – and when some want even more change – in the new MACPAC document “Required Analyses of Disproportionate Share Hospital (DSH) Allotments.”

 

Safety-Net Hospitals Gird for Loss of Medicaid DSH Money

Safety-net hospitals and others will lose a significant portion of their Medicaid disproportionate share (Medicaid DSH) payments on November 22 unless Congress delays implementation of the cut in those payments that was mandated by the Affordable Care Act.

And hospitals that receive these payments are now preparing for the worst.

The Medicaid DSH cut was included in the 2010 health care reform law in anticipation of a great reduction in the number of uninsured people leaving hospitals providing much less uncompensated care and therefore not in need of as much DSH money.  The law’s reach has not proven to be as great as anticipated, however, and two developments since the law’s passage have put a damper on the expected rise in the number of insured Americans:  a court decision that made it optional for states to expand their Medicaid program and the repeal of the requirement that everyone purchase health insurance.

Four times Congress has voted to delay the Medicaid DSH cut because so many people remained uninsured.  Now, however, the most recent delay in implementation of the cut, via a provision in the continuing resolution currently funding the federal government, expires on November 21, and hospitals – many of them already with razor-thin margins – are preparing for the worst:  a major reduction of their federal Medicaid DSH money.

NASH has asked Congress to delay the implementation of Medicaid DSH cuts on numerous occasions, citing their potential impact on the ability of private-safety-net hospitals to serve their communities.  NASH most recently made this request in September, urging members of Congress to support the continuing bipartisan effort to delay the cut.

Learn more about the prospect of a major Medicaid DSH cut later this month, how it might affect safety-net hospitals – including the kinds of private safety-net hospitals represented by NASH – and what some hospitals are doing to prepare for the possibility in the Stateline article “Rural and Safety Net Hospitals Prepare for Cut in Federal Support.”

CMS Adopts Methodology for Medicaid DSH Cuts

Medicaid DSH money will be allocated among states based on a new methodology under a regulation adopted this week by the Centers for Medicare & Medicaid Services.

But it is not clear when that new methodology may actually be used.

Cuts in Medicaid disproportionate share hospital (Medicaid DSH) allotments to states were mandated by the Affordable Care Act based on the expectation that the law would greatly reduced the number of uninsured Americans.  While this has been the case, the decline in the number of uninsured has not been as great as expected.  For this reason, Congress has on several occasions delayed the required Medicaid DSH cut.

That cut is now scheduled to take effect next week, on October 1, but a continuing resolution to fund the federal government, passed last week by the House and now under consideration by the Senate, would delay that cut again – at least until November 22.

Private safety-net hospitals view Medicaid DSH as an essential tool in their effort to serve the uninsured and underinsured residents of the low-income communities in which they are located and strongly oppose any reductions in Medicaid DSH allocations to the states.  See a recent NASH policy statement on Medicaid DSH here.

Learn more about the new regulation governing the future allotments of Medicaid DSH money to the states and the prospects for Medicaid DSH allocation cuts being made anytime soon in the Healthcare Dive article “CMS finalizes Medicaid DSH cuts, but Congress could still delay” and see the regulation itself here.

NASH Reiterates Call for Delay of Medicaid DSH Cuts

NASH supports current, bipartisan efforts in Congress to delay Medicaid disproportionate share (Medicaid DSH) cuts required by the Affordable Care Act.

The National Alliance of Safety-Net Hospitals has long called for the delay or elimination of these Medicaid DSH cuts and reiterated this view in preparation for NASH Advocacy Day, which was held last week in Washington, D.C.  In NASH’s view, Medicaid DSH is a vital tool for helping private safety-net hospitals serve residents of the low-income communities in which those hospitals are located.

NASH reinforced this position in a new position statement that notes that

While many Americans have taken advantage of the Affordable Care Act to obtain health insurance, millions remain uninsured…and the past two years have seen the number of uninsured Americans rise, not fall…Consequently, any decline now in Medicaid DSH payments could lead to an increase in the provision of charity care, possibly forcing hospitals to reduce services limit community outreach, and even reduce staff.  Such measures could jeopardize access to care, not only for hospitals’ uninsured and low-income patients but also for their privately insured, Medicare, and Medicaid patients as well.

See the complete statement on delaying Medicaid DSH cuts here, on the NASH web site.