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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.”

 

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.

Hospital Groups Critical of CMS 340B Proposal

The federal government should not survey providers to determine their costs for drugs covered by the section 340B prescription drug discount program, hospitals and hospital groups have told the Centers for Medicare & Medicaid Services.

Their comments came in response to a regulation CMS proposed in September that would require hospitals to report their acquisition costs for 340B-covered drugs.  CMS proposed such data collection after federal courts ruled against its attempt to reduce 340B reimbursement to hospitals that participate in the program.  Among the court’s objections were CMS’s lack of data about those drug acquisition costs.

Among the reasons hospitals conveyed in expressing their opposition were the cost of reporting the data in question; the design of the survey; the flawed premise underlying the survey; and the proposed rule’s requirement that all hospitals complete the survey and not just those that participate in the 340B program.

Among the groups criticizing the proposed regulation were the Association of American Medical Colleges, which wrote in its comment letter that

Congress did not design the 340B program to pay hospitals at acquisition costs…Congress designed the program so that eligible hospitals could purchase covered drugs at a discounted rate below the Medicare reimbursement rate and use the difference to reach more eligible patients and provide more comprehensive services.

The National Alliance of Safety-Net Hospitals was among the groups commenting on the proposed regulation.  Writing on behalf of private safety-net hospitals, NASH observed in its November 27, 2019 formal comment letter that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities.  The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents.  This was the purpose of the 340B program when Congress created it in 1992 and Congress has done nothing to modify that purpose since that time:  it has not directed that special assistance to qualified providers be reduced; it has not insisted that participating providers document the expenditure of their savings in service to their communities; and it most certainly has not dictated that 340B payments to eligible providers be reduced so that payments to non-340B providers could be increased.  NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

Learn more about hospital industry opposition to the proposed 340B regulation in the Fierce Healthcare article “Hospitals blast CMS’ proposed 340B survey.”

Back Off 340B Data Collection, NASH Tells CMS

The federal government should not impose a new, major data reporting requirement on 340B-eligible hospitals to support the implementation of a new policy that federal courts twice have rejected, NASH told the Centers for Medicare & Medicaid Services last week.

In formal comments in response to a CMS proposal to require hospitals that participate in the section 340B prescription drug discount program to provide CMS with extensive data on their acquisition costs for 340B drugs, NASH wrote that such data collection would be burdensome; that CMS should not be reducing 340B payments to providers because such a policy decision falls solely within the purview of Congress, which created the program; and that instead of focusing on just this one aspect of the court’s rejection of its attempts to reduce 340B payments, CMS should instead focus on the court’s order that the agency develop a means of reimbursing hospitals for the lost 340B payments Medicare has withheld from providers for the past two years.

Most private safety-net hospitals participate in the 340B program and count on the resources the program generates to help them provide additional services to the low-income residents of the communities in which they are located.

Learn more about why NASH objects to CMS’s planned data reporting requirement in NASH’s formal comment letter to CMS.

Medicaid Block Grants Hit Bump in Road

The drive toward encouraging states to implement Medicaid block grants hit a bump in the road last week when the formal guidance for states that Centers for Medicare & Medicaid Services administrator Seema Verma suggested was imminent apparently became not-so imminent.

At the time Verma spoke, draft guidance from CMS to the states was under review by the federal Office of Management and Budget.  Last week, however, CMS withdrew that draft, which also was to address state Medicaid per capita cap programs.

The bump in the road does not, however, appear to be more than a temporary detour.  While CMS has not explained why the draft was withdrawn, Verma indicated that the agency still intends to provide guidance to state on Medicaid block grants and per capita spending limits.

NASH has long had concerns about Medicaid block grants, 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 from the McKnight’s Long-Term Care News article “CMS withdraws proposed guidance on Medicaid block grants, funding caps.”

Court Upholds Delay of Medicare Site-Neutral Payment Cut

Medicare cannot proceed with its plan to pay for outpatient care on a site-neutral basis while it appeals a court ruling rejecting that policy, a federal court has ruled.

A federal judge found that Medicare has not articulated an adequate reason to delay the $380 million a year in site-neutral payment cuts while the Centers for Medicare & Medicaid Services appeals the September decision rejecting the payment policy change.  The court also found that, contrary to CMS’s claim, Medicare still has an appropriate methodology for making payments that are not site-neutral and that the agency has not proved that it would suffer irreparable harm if the cuts are delayed while it considers CMS’s appeal.

The cut took effect on January 1, 2019 but the court did not address how Medicare should compensate hospitals for lost payments, instead ordering CMS and the plaintiffs in the case to submit reports on how the payment shortfalls can best be addressed.

NASH has opposed implementation of the site-neutral payment policy on several occasions in recent years, doing so most recently in its letter last month to CMS (scroll down to page 5) about the agency’s proposed policy for paying for Medicare-covered outpatient services for 2020.

Learn more about the Medicare site-neutral payment cut and why the federal court again ruled against that cut in the Fierce Healthcare article “Judge denies bid to preserve site-neutral payment cuts while awaiting appeal.”

NASH Takes First Position on Surprise Medical Bills

Congress should address surprise medical bills in a manner that protects patients from such bills and establishes a fair negotiating process between providers and insurers, the National Alliance of Safety-Net Hospitals declared in its first public statement about the surprise medical bill issue.

The statement, developed to coincide with NASH Advocacy Day in Washington, D.C. last week, explains that the biggest challenge in developing a means of addressing this problem is forging a solution that ensures that providers, including private safety-net hospitals, can negotiate adequate reimbursement for care they deliver outside of the provider networks of their patients’ insurers.

With this in mind, NASH encourages Congress to pursue a solution that follows four basic principles:

  • Surprise billing legislation should protect patients from surprise medical bills and balance billing for out-of-network services.
  • Insurers and providers should be required to negotiate, without a federal role or involvement, for payment for services provided to insured individuals by out-of-network providers.
  • Insurers should uphold the “prudent layperson standard” and provide emergency care for any condition that a prudent layperson would reasonably believe requires emergency care.
  • Federal policies should preserve rather than supersede existing state policies that meet federal minimum patient protections for insurance products that are within states’ jurisdiction.

Learn more from NASH’s new position statement on surprise medical bills.

NASH Seeks Medicaid Exemption From New Public Charge Regulation

Congress should exempt Medicaid enrollment from the criteria in a new federal regulation that defines “public charge” or even overturn that regulation entirely, the National Alliance of Safety-Net Hospitals has declared in a new position statement.

The new statement, developed to coincide with NASH Advocacy Day in Washington, D.C. last week, notes that the fear of being designated a public charge will discourage many immigrants, including those to whom the new regulation does not even apply, from obtaining the medical care they need.  As a result, as many as 13 million legal immigrants are expected to disenroll from Medicaid out of fear of being labeled a public charge or choose not to enroll in the program even though they are entitled to Medicaid benefits.  Those found to be public charges risk losing green card status or even deportation.

Such individuals, NASH believes, will inevitably turn to private safety-net hospitals and others for care when they are sick or injured, placing great financial stress on these hospitals and potentially jeopardizing their ability to serve their communities.  For this reason, NASH has urged Congress to remove Medicaid participation from the criteria defining a public charge or to overturn the new regulation completely.

Learn more in the new NASH position paper “Challenges Posed by the New Public Charge Regulation.”

 

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.

NASH Award to Rep. Kennedy

NASH has given its “Champion for Health Care Award” to Representative Joe Kennedy III (D-MA).

Rep. Kennedy received the award during last week’s NASH Advocacy Day in recognition of his “tireless advocacy of access to care for his constituents, the residents of Massachusetts, and all Americans.”

As a member of the House Energy and Commerce Committee’s Health Subcommittee, Representative Kennedy has introduced numerous bills to help ensure access to care.  As explained by Keith Hovan, CEO of both NASH and the Southcoast Health System, which is located in Mr. Kennedy district, “Representative Kennedy has fought to protect private safety-net hospitals from damaging cuts that would hinder our ability to care for our most vulnerable residents.  We are incredibly grateful for his leadership.”

Learn more about Representative Kennedy and the NASH Champion of Health Care Award here.