Posts

NAUH Comments on Proposed FY 2015 Medicare Inpatient Regulation: Part 2 of 7

Every year, the Centers for Medicare & Medicare Services (CMS) publishes in the Federal Register a draft regulation describing how it proposes paying hospitals for the inpatient care they provide to their Medicare patients in the coming fiscal year.  The proposed inpatient prospective payment system regulation for FY 2015 was published on May 15, and as always, CMS invited interested parties to submit written comments.

The National Association of Urban Hospitals has always found CMS to be receptive and even responsive to its comments and therefore takes the opportunity to submit detailed comments and suggestions about the agency’s annual proposal.

NAUH is presenting excerpts from its comment letter to CMS.  The subjects and the dates they will be published are:

June 26 – the size of the Medicare DSH pool

Today – the manner in which CMS uses CBO estimates of changes in insurance status

June 30 – the methodology for distributing Medicare DSH funds

July 1 – the need for appropriate risk adjustment in the hospital readmissions reduction program

July 2 – a much-needed adjustment to the methodology employed by the hospital readmissions reduction program

July 3 – hospital inpatient rates

July 7 – short hospital stays (two-midnight rule)

NAUH’s complete comment letter to CMS can be found here.

The Manner in Which CMS Uses CBO Estimates of Changes in Insurance Status

NAUH understands that CMS is required to use Congressional Budget Office (CBO) estimates of changes in the number of uninsured as a result of Affordable Care Act reforms to reduce the Medicare DSH pool but is concerned about the manner in which CMS uses those estimates.

NAUH LogoThe Affordable Care Act envisioned significant expansion of Medicaid in all 50 states.  The Supreme Court changed that, however, making Medicaid expansion optional for the states, and consequently, about half of the states have not expanded their Medicaid program.  As a result, reductions in the number of uninsured people are not occurring in a more or less across-the-board manner, as both the reform law and CBO anticipated, instead occurring at very different rates depending on whether individual states have or have not expanded their Medicaid programs.

Another complicating factor is the challenges the uninsured faced using health insurance exchanges to enroll in Medicaid and purchase private insurance.  The federally facilitated marketplace had a troubled launch and 27 states chose to rely solely on that marketplace; another seven operated marketplaces in partnership with the federal government.  These operations were all handicapped to a degree by the problems encountered during the initial launch of the federal marketplace.  Another 17 states operated their own exchanges – with varying degrees of success.  Some worked well but others encountered problems as great at those experienced by the federal exchange.  Whether federal or state-operated, the troubled exchanges had one thing in common:  they detracted from the number of people who obtained health insurance during the enrollment period – but they did so unevenly, with people in some states having more trouble than people in others.  Yet another complicating factor is that at this time, we cannot completely discern how many of those who enrolled in health insurance through the exchanges are newly insured and how many simply took advantage of the exchanges to obtain new insurance.

Together, these factors suggest that reducing the Medicare DSH pool based on the CBO estimates will be especially advantageous for hospitals in some states and especially harmful for hospitals in others.  For this reason, NAUH recommends that CMS reduce its planned cuts in the Medicare DSH pool so it does not needlessly create winners and losers and does not jeopardize access to care in some communities.

* * *

Monday:  The methodology for distributing Medicare DSH funds

NAUH’s complete comment letter to CMS can be found here.

 

NAUH Comments on Proposed FY 2015 Medicare Inpatient Regulation: Part 1 of 7

Every year, the Centers for Medicare & Medicare Services (CMS) publishes in the Federal Register a draft regulation describing how it proposes paying hospitals for the inpatient care they provide to their Medicare patients in the coming fiscal year.  The proposed inpatient prospective payment system regulation for FY 2015 was published on May 15, and as always, CMS invited interested parties to submit written comments.

law booksThe National Association of Urban Hospitals has always found CMS to be receptive and even responsive to its comments and therefore takes the opportunity to submit detailed comments and suggestions about the agency’s annual proposal.

Beginning today and for the next six business days, NAUH will present excerpts from its comment letter to CMS.  The subjects and the dates they will be published are:

Today – the size of the Medicare DSH pool

June 27 – the manner in which CMS uses CBO estimates of changes in insurance status

June 30 – the methodology for distributing Medicare DSH funds

July 1 – the need for appropriate risk adjustment in the hospital readmissions reduction program

July 2 – a much-needed adjustment to the methodology employed by the hospital readmissions reduction program

July 3 – hospital inpatient rates

July 7 – short hospital stays (two-midnight rule)

NAUH’s complete comment letter to CMS can be found here.

 

The Size of the Medicare DSH Pool

NAUH appreciates the work that went into CMS’s decision regarding the size of the factor 1 portion proposed Medicare DSH pool for FY 2015.  The work was thoughtful and well-researched, and we thank you for this.

For future reference, and so we can understand the underlying rationale for the decisions that were made, NAUH would like to know more about the underlying calculations that led to those decisions.  To begin, NAUH would like to know more about CMS’s decisions and calculations in light of the proposed rule’s assertion that

The Office of the Actuary uses the most recently submitted Medicare cost report data to identify current Medicare DSH payments, supplemental cost report data provided by IHS hospitals to CMS, and the most recent DSH payment adjustments provided in the IPPS Impact File, and applies inflation updates and assumptions for future changes in utilization and case-mix to estimate Medicare DSH payments for the upcoming fiscal year.

NAUH asks CMS to provide more information about the inflation updates and assumptions the Office of the Actuary used to estimate what Medicare DSH payments would have been absent section 1886(r) of the Affordable Care Act.  Although we do not know what those assumptions were, the FY 2014 final IPPS rule stated that the Office of the Actuary accounted for additional Medicare DSH expenditures associated with Medicaid expansion.  NAUH recommends that this estimate, too, should account for that impact.  Specifically, NAUH recommends that the estimate of Medicare DSH payments for the upcoming fiscal year take into account increases in Medicare DSH payment percentages that can be expected among hospitals currently projected to receive DSH as well as increased DSH expenditures attributable to hospitals that are likely to become eligible for Medicare DSH as their DSH patient percentages increase.  This calculation, NAUH believes, also should reflect the significant numbers of individuals whose applications for Medicaid are still pending – 1.7 million such people, according to published reports in early June.  NAUH would like to know whether the calculation includes these individuals and how much Medicare DSH would otherwise have been paid had they been qualified in a more timely manner.

* * *

Tomorrow:  the manner in which CMS uses CBO estimates of changes in insurance status

NAUH’s complete comment letter to CMS can be found here.

Members of Congress Urge Delay in Medicare DSH Cuts

Fifty-eight members of the House of Representatives have written to House leadership asking them to delay the continued implementation of Affordable Care Act-mandated Medicare disproportionate share (Medicare DSH) cuts.

The letter, to House Speaker John Boehner and minority leader Nancy Pelosi, notes that

…hospitals that qualify for Medicare DSH are, by definition, the very providers caring for the greatest numbers of low-income and low-income elderly patients.  In recent years, hospitals have incurred $270 billion in Medicare cuts, including reductions in their annual cost-of-living adjustments, penalties through Medicare’s value-based purchasing and readmissions reduction programs, reduced Medicare bad debt reimbursement, and continued cuts from sequestration.  Medicare DSH cuts at this time could jeopardize the health care safety net that our constituents and yours need and deserve.

US Capitol DomeMedicare DSH payments are vital to the nation’s private  safety-net hospitals, and the National Association of Urban Hospitals had been urging Congress to delay Medicare DSH cuts for the past three years.  Most recently, NAUH asked House members to sign onto a bill delaying Medicare DSH cuts for two years.

Read the entire congressional letter here.

NAUH Calls for Delay of Medicare DSH Cuts

The National Association of Urban Hospitals (NAUH) has asked members of the House of Representatives to sign onto a bipartisan letter from Representatives Adam Schiff (D-CA) and Devin Nunes (R-CA) asking House leaders to bring to the floor legislation to delay cuts in Medicare disproportionate share hospital payments (Medicare DSH) required by the Affordable Care Act.

In the letter, NAUH notes that

Affordable Care Act-mandated cuts in Medicare disproportionate share hospital payments (Medicare DSH) are hurting private, non-profit urban safety-net hospitals and other providers like them that care for especially large numbers of low-income, low-income elderly, and uninsured patients. Many hospitals are already struggling to accommodate the $270 billion in Medicare payment cuts imposed on them in recent years, and as they work to accommodate these cuts, they need protection from additional reductions like cuts in their essential Medicare DSH payments.

See NAUH’s message to House members here.

NAUH Testifies on Medicare DSH

NAUH has asked the House Ways and Means Committee to delay cuts in Medicare disproportionate share hospital payments (Medicare DSH).

In written testimony submitted to the committee as part of a public hearing on hospital-related Medicare issues, NAUH told the committee that Affordable Care Act-mandated cuts in Medicare DSH payments should be delayed

…to ensure that Americans have appropriate access to health care if and when they need it and to ensure that the fabric of the American health care safety net does not fray beyond repair.

NAUH LogoNAUH also told the committee that

… moving forward with the proposed cuts in the Medicare DSH program could hinder access to care for those who need it most – including residents of the predominantly low-income communities served by the nation’s private, non-profit urban safety-net hospitals. In hurting the hospitals that serve these patients, moreover, Medicare DSH cuts also could hurt the other patients these same hospitals serve – those covered by private insurance and those covered by Medicare.

Read NAUH’s complete testimony here.

Study Points to Risk of DSH Cuts

A new study suggests that future cuts in Medicare disproportionate share (Medicare DSH) and Medicaid DSH payments could pose problems for hospitals that serve large numbers of uninsured patients.

According to a new report in the journal Health Affairs,

Such cuts in government funding of uncompensated care could pose challenges to some providers, particularly in states that have not adopted the Medicaid expansion or where implementation of health care reform is proceeding slowly.

Medicare DSH and Medicaid DSH payments help underwrite the uncompensated care hospitals provide to their uninsured patients.  All private safety-net hospitals receive such payments.

health affairsEven after Affordable Care Act reforms take effect, 25 to 30 million Americans are expected to remain uninsured.  Medicare DSH payments are expected to decline $22.1 billion between now and 2019 and Medicaid DSH payments, temporarily delayed by two separate actions of Congress, are expected to decline $17.1 billion through 2020.

The new study supports The National Association of Urban Hospitals’ long-time position that Medicare DSH and Medicaid DSH cuts would be harmful to private, non-profit urban safety-net hospitals and should be delayed.   NAUH also has endorsed legislation calling for such a delay.

Learn more about the Health Affairs study in this Washington Post article and find the study itself here, on the web site of Health Affairs.

Some Hospitals Stand to Lose Medicaid Expansion, DSH Money

When the Supreme Court made Medicaid expansion optional rather than mandatory for states, its decision affected the delicate balance of one aspect of the Affordable Care Act.

Hospitals that serve large numbers of low-income and uninsured patients receive special supplemental payments from Medicare and Medicaid to help subsidize the care they provide to these patients:  disproportionate share payments, or DSH payments.

And because Medicaid expansion was expected to reduce the number of uninsured patients such hospitals serve, the Affordable Care Act calls for reducing over a period of years both the Medicare DSH and Medicaid DSH payments hospitals receive.

iStock_000005787159XSmallBut in states that choose not to expand their Medicaid programs, hospitals that qualify for Medicare DSH and Medicaid DSH payments will continue to serve similar numbers of low-income and uninsured payments but now face the prospect of doing so with smaller Medicare DSH and Medicaid DSH payments as the Affordable Care Act requirement begins reducing those payments.

This could prove especially troublesome for private safety-net hospitals located in states that do not expand their Medicaid program because such hospitals serve especially large numbers of low-income and uninsured patients.

The Wall Street Journal has taken a look at how this situation will affect hospitals in just one state that is not expanding its Medicaid program.  See its story here.