Number of Uninsured Children Rising

The number of uninsured children in the U.S. is rising.

Since 2016, the number of uninsured children has risen by approximately 726,000 as the uninsured rate among children rose from 4.7 percent to 5.7 percent in 2019.

An increase of 320,000 children between 2018 and 2019 was the largest such increase in more than a decade.  Texas accounts for one-third of the four-year increase, or about 243,000 newly uninsured children, with Florida second with 55,000 newly uninsured children.

Any increase in the number of uninsured children poses a special challenge for private safety-net hospitals because those hospitals are generally located in communities with larger numbers of low-income and uninsured residents than areas served by the typical community hospital.

Learn more about the increase in the number of uninsured children in recent years and why it occurred in the report “Children’s Uninsured Rate Rises by Largest Annual Jump in More Than a Decade” from the Georgetown University Health Policy Institute’s Center for Children and Families.

NASH Asks Congress to Help Preserve Federal COVID-19 Aid for Hospitals

Protect the COVID-19 aid the federal government has given to private safety-net hospitals, NASH has asked in a letter to Congress.

The letter refers to changes in how the Department of Health and Human Services wants hospitals to calculate the revenue they lost as a result of COVID-19 – the justification in part for the Provider Relief Fund payments hospitals have received through the CARES Act.  In June, HHS told hospitals how to make that calculation but late last month it changed those directions in ways that could force many private safety-net hospitals and others to return some or even much of the federal aid they received.

In the letter, NASH asks members of Congress to sign a bipartisan letter asking HHS Secretary Alex Azar to restore the June instructions for calculating COVID-19-related lost hospital revenue.

Go here to read NASH’s message to Congress.


MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among the issues on MedPAC’s October agenda were:

  • Medicare Advantage benchmark policy
  • indirect medical education:  current Medicare policy, concerns, and principles for revising
  • the evolution of Medicare’s advanced alternative payment models
  • vertical integration and Medicare payment policy

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.  Because so many patients of private safety-net hospitals are insured by Medicare, MedPAC’s deliberations are especially important to those hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues and here for a transcript of the proceedings.

Congress Gives Hospitals Medicaid DSH Relief

Medicaid DSH allocations to states will not be reduced right away thanks to a new continuing resolution to fund the federal government through December 11.

The Medicare disproportionate share allocation cuts to the states, mandated by the Affordable Care Act but delayed by Congress several times, were delayed again earlier this year but scheduled to take effect on November 11.  With the latest continuing resolution, the cuts will be delayed yet another month.

Learn more about the delay of Medicaid DSH cuts and other aspects of the continuing resolution that affect hospitals in the Healthcare Dive article “Providers win Medicare loan extension, DSH relief but lose other asks in stop-gap spending law.”

Payer Mix to Change, Providers Anticipate

Health care providers expect to serve higher proportions of Medicaid and uninsured patients in the coming year, according to a new survey.

The shift will be driven by the COVID-19 pandemic, which as unemployment remains high is leading to fewer patients with commercial insurance and more with Medicaid or no insurance all, according to provider financial executives.

Such a shift would be especially challenging for private safety-net hospitals because they already serve higher proportions of Medicaid and uninsured patients than the typical community hospital.

Learn more about the reimbursement changes health care providers expect to see over the next twelve months in the Healthcare Dive article “Provider finance execs bracing for unfavorable shift in payer mix, survey finds.”

Coronavirus Update for Thursday, October 1

The following is the latest COVID-19 information from the federal government as 2:30 p.m. on Thursday, October 1.

NASH Advocacy

  • NASH has written to Health and Human Services Secretary Alex Azar asking HHS to abandon its new methodology for calculating hospitals’ COVID-19-related lost revenue. The new methodology, introduced recently, would redefine lost revenue as change in net operating income from 2019 to 2020.  A previous methodology gave hospitals greater latitude for calculating lost revenue.  In its letter, NASH explains that such a change would be especially disadvantageous to private safety-net hospitals because many of those hospitals have relatively modest resources and were forced to take sometimes dramatic steps to reduce their costs during the pandemic.  Under the new definition, these hospitals would be required to return much of the Provider Relief Fund money to the federal government.

Provider Relief Fund

  • HHS announced the planned distribution of $20 billion in new funding for providers on the front lines of the COVID-19 pandemic.  Under this Phase 3 General Distribution allocation, providers that have already received Provider Relief Fund payments will be invited to apply for additional funding that considers financial losses and increased expenses experienced due to COVID-19.  Previously ineligible providers, such as those that began practicing in 2020, will also be invited to apply, and an expanded group of behavioral health providers confronting the emergence of increased mental health and substance use issues exacerbated by the pandemic will also be eligible for relief payments.
  • This new distribution should be especially helpful for providers that have received minimum or no targeted relief, such as safety-net, high-impact, or rural distributions.
  • Providers can begin applying for funds on Monday, October 5, 2020 and the application deadline is November 6.
  • According to HHS’s news release,
  1. All provider submissions will be reviewed to confirm they have received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue from prior general distributions. Applicants that have not yet received Relief Fund payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.
  2. With the remaining balance of the $20 billion budget, HRSA will then calculate an equitable add-on payment that considers the following:
    • A provider’s change in operating revenues from patient care.
    • A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus.
    • Payments already received through prior Provider Relief Fund distributions.

Go here to learn more about the distribution.

Department of Health and Human Services

Centers for Medicare & Medicaid Services

  • Congress has passed, and the president has now signed, a continuing resolution to fund the federal government through December 11.  The resolution includes a provision that would change the terms under which providers must repay federal CARES Act money they received through the Medicare Accelerated and Advance Payment program, which is administered by CMS.  Now, recoupment will begin only a year after providers received their loan and recoupment is reduced from 100 percent to 25 percent during the first 11 months of repayment and 50 percent for the six following months, with hospitals now having 29 months to repay their loans in full before they would need to begin paying interest.  That interest rate, too, is lowered under the continuing resolution from 9.6 percent to 4.0 percent.
  • CMS has updated its compendium of temporary waivers and flexibilities for teaching hospitals, teaching physicians, and medical residents during the COVID-19 pandemic.  A new flexibility, on page 2 of the document, explains that instead of requiring that new Medicare GME affiliation agreements be submitted to CMS and MACs by July 1, 2020 for the academic year starting July 1, 2020 and amendments to Medicare GME affiliation agreements be submitted to CMS and the MACs by June 30, 2020 for the academic year ending June 30, 2020, CMS is permitting hospitals to submit new and/or amended Medicare GME affiliation agreements as applicable to CMS and the MACs by January 1, 2021.
  • CMS has updated its COVID-19 testing methodology for nursing homes by revising the methodology it employs to determine the rate of COVID-19 positivity in counties across the country.
  • CMS has published guidance addressing the emergency preparedness testing exercise requirements for COVID-19.  CMS regulations for emergency preparedness require specific testing exercises to validate facilities’ emergency programs.

Food and Drug Administration

National Institutes of Health

Federal Communications Commission

Public Charge Rule Takes Effect

The “public charge rule” that the administration introduced in 2019, only to have it challenged in the courts, is now being enforced by the U.S. Citizenship and Immigration Services after a federal court lifted an injunction on its implementation.

The rule authorizes USCIS to deny a green card to any immigrant who receives certain public benefits – such as food stamps, public housing vouchers, welfare, or Medicaid – for more than 12 months within any three-year period.  The expressed purpose of the rule is to deny green cards to individuals who may become dependent on publicly funded services – a so-called “public charge.”

NASH opposed the public charge rule when it was proposed in 2018, expressing concern that many immigrants – including those who are eligible for Medicaid and for whom applying for Medicaid benefits would not jeopardize their immigration status – would choose not to apply for Medicaid and would instead turn to private safety-net hospitals and others like them for care when they are sick or injured, thereby increasing the uncompensated care burden for hospitals that already serve large numbers of uninsured, under-insured, and Medicaid patients.  See NASH’s letter expressing this and other views here and go here for a NASH statement about the public charge rule.

Learn more about the USCIS’s intentions for implementing the public charge rule here and learn more about the latest developments on this issue in the article “Trump administration reimposes ‘public charge’ rule following court victory” in the online publication The Hill.

Back Off 340B Cuts, HHS Tells Drug Company

Eli Lilly and Company is being presumptuous in assuming that the federal government will approve its plan to cease providing some federally mandated prescription drug discounts under the section 340B prescription drug discount program and does so at its own peril, the U.S. Department of Health and Human Services warned the company in a strongly worded letter.

Without addressing the merits of Eli Lilly’s request, HHS found the manner in which the company sought to force the federal government’s hand on the matter to be unacceptable.  HHS also questioned the timing of the company’s request in its recent letter, writing that

…we believe the timing of your pricing changes is, at the very least, insensitive to the recent state of the economy.  Although the economy is rebounding at a record rate, the unemployment and under-employment rates are still temporarily higher than at the beginning of the year due to COVID-19.  Many Americans and many small businesses have had difficulty making ends meet.  Lilly, on the other hand, seems to be enjoying an outstanding year.

The HHS letter also observes that

…during this same period, most health care providers, many of which are covered entities under section 340B, were struggling financially and requiring federal assistance from the Provider Relief Fund established by the CARES Act.  Many continue to struggle and depend on emergency taxpayer assistance.  It is against this backdrop that you are effectively increasing the price of 10 mg and 20 mg Cialis by more than 500,000 percent and have done the same for other drugs in your portfolio.

The 340B program, which enables hospitals that serve especially large numbers of low-income patients to purchase prescription drugs at a discount to dispense to such patients on an outpatient basis, has long been a vital tool in the ability of private safety-net hospitals to serve their community.  NASH has long supported the program, doing so most recently in a letter earlier this month to members of Congress.

The HHS letter to Eli Lilly and Company – one of five companies attempting to redefine 340B requirements – concludes with a warning that should the company proceed with its plan, doing so could result in legal action “…in the event that Lilly knowingly violates a material condition of the program that results in over-charges to grantees and contractors.”

Go here to see the HHS letter to Eli Lilly and Company.

Expand Use of Telehealth, Group Recommends

The federal government should encourage greater use of telehealth, a task force has recommended.

Among the changes recommended by the task force, it called on the federal government to make permanent some of the temporary extensions of the use of telehealth authorized for Medicare in response to COVID-19, including:

  • Lifting geographic restrictions and limitations on originating sites.
  • Allowing telehealth for various types of clinicians and conditions.
  • Acknowledging, as many states now do, that telehealth visits can meet requirements for establishing a clinician/patient relationship if the encounter meets appropriate care standards or unless careful analysis demonstrates that, in specific situations, a previous in-person relationship is necessary.
  • Eliminating unnecessary restrictions on telehealth across state lines.

In making these recommendations the task force noted that increased use of telehealth has not driven an increase in health care utilization or costs, as many feared; it has led to a decline in the frequency with which patients miss scheduled appointments; and it can prevent delays in patients seeking care and reduce exposure to pathogens.

Telehealth may be especially beneficial for private safety-net hospitals because they serve so many low-income patients for whom keeping doctors’ appointments often proves to be a challenge.  If those patients have access to remote technologies, telehealth could become a valuable tool in improving and maintaining those patients’ health.

The Taskforce on Telehealth Policy is a collaboration between the National Committee for Quality Assurance, the Alliance for Connected Care, and the American Telemedicine Association.

Learn more about the task force’s work, including its findings and recommendations, in the document “Taskforce on Telehealth Policy (TTP) Findings and Recommendations.”

MFAR is Dead

At least for now.

The controversial Medicaid Fiscal Accountability Regulation, slated for implementation this fall over the objections of many health care stakeholders, will not move forward at this time.

In a tweet earlier this week, Centers for Medicare & Medicaid Services Administrator Seema Verma wrote that

We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study.  Therefore, CMS is withdrawing the rule from the regulatory agenda.

If implemented, opponents maintained, the regulation would have:

  • Deprived states of important, established policy-making prerogatives.
  • Created major new administrative burdens for state governments and hospitals.
  • Inappropriately regulated financing of the state share of Medicaid spending.
  • Introduced new, unspecified standards for state Medicaid programs.

While CMS maintained that MFAR would have enhanced the transparency of state Medicaid programs, the rule’s opponents maintained that it could lead to a major reduction of resources for serving the Medicaid population.

NASH was among those opponents, arguing that the regulation could have hurt private safety-net hospitals and others that serve low-income communities by inappropriately regulating how states can finance their Medicaid programs.  CMS proposed the rule last November and  submitted formal comments expressing its opposition in January and endorsed legislation to prohibit the rule’s implementation in July.

It is worth noting that in “withdrawing the rule from the regulatory agenda,” Verma did not preclude the possibility of reintroducing MFAR at some point in the future.

Learn more from article “Trump administration backing off Medicaid rule that states warned would lead to cuts” in the online publication The Hill.