Transcript Slide 1

AHA Advocacy Agenda
Allied Hospital Associations’
Accounting & Financial Specialists
(A2HA)
2013 Spring Meeting
March 18, 2013
AHA Advocacy Agenda
LEGISLATIVE
• Political Landscape
• Fiscal Cliffs
• Sequestration
• Message, Plan, Strategy
REGULATORY
• Medicare
• Medicaid
• Exchanges
• EHR Incentive Program
• 340 B GPO Exclusion
Political landscape
• Washington’s continued
fiscal war
• Divided government:
 In the past: compromise
 Today: paralysis and
dysfunction
 Parties dominated by the “wings”
 No middle
Congress was LESS
popular than:
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Root canals
NFL replacement refs
Head lice
Colonoscopies
Washington political
pundits
Traffic jams
Cockroaches
Donald Trump
Genghis Khan
Congress was LESS
popular than:
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Root canals
NFL replacement refs
Head lice
Colonoscopies
Washington political
pundits
Traffic jams
Cockroaches
Donald Trump
Genghis Khan
January 2st
Deal
February 4th
Deal
Fiscal Cliff #1
American Taxpayer Relief Act
• Medicare physician fix…until end of the year
($25 billion)
• Medicare hospital extensions ($5 billion)
 Offsets
 Retrospective hospital coding ($10.5 billion)
 Medicaid DSH rebasing ($4.2 billion)
• Sequester delayed
 No hospital offset
Fiscal Cliff #2: No Budget No Pay Act of
2013
• Passed House and Senate
• Supported by President
• Key provisions
 Suspends debt-limit extension
until May 18
 Real date: late July
 Pass a budget resolution by April 15…or pay docked
 House Budget Resolution
 Rep. Paul Ryan (R-WI)
 Must balance over 10 years
 Senate Budget Resolution
 Sen. Patty Murray (D-WA)
2013 Sequester Cuts
Sequester Implications for Hospitals
• Current policy
 Medicaid benefits and
provider payments exempt
 Medicare:
 “Protected” status
 Real cuts to providers
 Discretionary programs significantly cut
Potential Risks in Sequester Debate
• Sequester for defense
(and other discretionary
programs) STOPPED
• BUT, Medicare sequester for provider
and insurer payments continue
• Replacement savings from entitlement
programs…ON TOP OF SEQUESTER
Sequester avoidance
Key Questions
• Is there the political will to act now?
• How long a delay?
• What are the elements of
a “replacement savings
package?”
• $120 billion
Hospital payment reductions
• Same options as before
• Prospective coding offsets ($8 billion)
• E&M code/HOPD ($7 billion)…and other site neutral
payment options
• Hospital bad-debt reductions ($20 billion)
• Post acute care update reductions ($42 billion)
• CAH: payment reductions and qualification criteria
($2 billion)
• GME reductions ($10 billion)
• IPAB expansion
• Medicaid:
– State provider assessments ($22 billion)
Outlook
• Less likely for now
 Grand bargain
 Permanent Medicare
physician fix
 Tax reform
• More likely for now
 Temporary patches
Deficit Reduction Enacted So Far (2013-22)
Hospitals have faced repeated cuts to
payment since 2010
Impact of Hospital Cuts Since FY 20101
Billions of Dollars
$250 billion
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Bad debt and Medicaid DSH cuts included in Middle Class Tax Relief and Job Creation Act of 2012 and additional DSH cuts
for 2022 in the American Taxpayer Relief Act of 2012 (ATRA); 3-day window cut included in American Jobs and Closing Tax
Loopholes Act of 2010; estimate of excess CMS MS-DRG coding cut based on hospital analysis and includes additional
amounts cut in 2014-2017 in the ATRA; sequestration amount estimated from CBO Medicare Baseline. Other provisions of
the ATRA including extension of low volume adjustment, extension of Medicare Dependent Hospital Program and the
adjustment to payment for certain radiology services net out to zero and are not shown.
Our message
• Theme: access
• Key points
‒ Challenges you face
‒ Hospitals increasing
value…performance
improvement
Douglas W. Elmendorf of the Congressional Budget Office said health
spending growth continued at its lowest rate in decades.
Our plan and strategy
• Legislative ALERT
• Advocacy alliances in place
• Advocacy Days
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February 13
February 26
• MEDPAC
• Studies and reports
• Advertising
• Focus on the Senate
www.aha.org/Alliances
Regulatory Agenda
• Medicare CoPs
• Medicare IPPS
– Inpatient payment update, Medicare DSH,
patient status
• State Insurance Exchanges
• Medicaid Expansion
• Medicaid DSH
• EHR Incentive Program Update
• 340B Drug Pricing Program and GPO
Prohibition
Medicare CoPs
February 7: CMS Issues proposed rule
• Focuses largely on burden reduction
• Affects selected Medicare requirements for:
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Hospitals and CAHs
FQHCs and RHCs
Ambulatory Surgery Centers (ASCs)
Transplant Centers; Organ Procurement Orgs
Long-term care facilities (LTCs)
Intermediate care facilities for individuals who
intellectually disabled (ICF/IID)
 Laboratories
• Comments due April 8th.
New CoP Proposals
Governing Board:
• CMS proposes to rescind requirement that the
governing board must have at least one
medical staff member.
• Instead, governing boards would be
required to have twice-yearly
consultations with medical staff.
• Multi-hospital systems with a single
governing board would need to consult with
each hospital in the system.
New CoP Proposals
Medical Staff:
• Each hospital must have its own distinct medical
staff.
• This would preclude multi-hospital systems with
multiple hospital CCNs from having unified medical
staffs.
• CMS should not tell hospitals how to construct their
relationships with the medical staff.
• Very important for members to weigh in:
• Those with unified medical staffs
• Those who anticipate this may be important for
a more integrated care system for the future
New CoP Proposals
Among Other Proposed Changes:
• Outpatient Services: CMS would clarify
who may order outpatient services.
• CAH Services: CMS proposes to remove
requirements related to the development of
patient care policies and on-site physician
presence.
• Dietetic Services: Qualified dieticians
would be able to order patient diets under
the hospital CoPs.
See our recent Regulatory Advisory for a full list
of the proposed changes.
IPPS Hospital Rulemaking
Inpatient PPS Proposed Rule (April/May)
• Coding offset
• Market basket productivity cuts
• Medicare DSH
• Patient status
Possible Issues
• HACs
• Proposal to shift select LTCH patients to
ICUs
Expected Update for FY 2014
ADJUSTMENT
EXPECTED
• Inflation rate (hospital market-basket)
+ 2.8%
• ATRA coding adjustment
- 2.4%
• PPACA reduction
- 0.3%
• PPACA productivity adjustment
- 0.7%
• NET UPDATE FACTOR
- 0.6%
Note: This does not account for the -2.0 percent Sequester
Medicare DSH ACA Provision
Pool of funds using
“old” formula
method
25%
New pool of funds
75%
•Size based on decrease in non-elderly
uninsured
•Distribution based on hospital’s share
of national uncompensated care for all
Medicare DSH hospitals
Policy Issues for New Pool Distribution:
1. Definition of Uninsured
2. Definition of Uncompensated Care
Allied Advisory Committee On Health Care
Implementation
MEDICARE DSH Principles
1. Medicare DSH should continue.
2. Definition of uninsured should be inclusive.
3. Hospital uncompensated care data should be the
best available, most current and updated
periodically.
4. Hospital uncompensated care should include bad
debt, charity, government payment shortfalls from
Medicaid, and non-Medicaid state and local
government programs.
5. If ACA promised coverage is not realized,
Medicare DSH funding reductions should be
restored.
Patient Status
• Inpatient versus outpatient observation status
has implications for Medicare payment and
coverage
• Decision to admit a patient requires the expert
judgment of treating physician
• Recent actions by RACs, MACs, DOJ and
whistleblowers are “second-guessing” the
treating physician’s judgment
Patient Status
• CY 2013 OPPS proposed rule: CMS requested
public input on ways to improve Medicare policy on
patient status
1. Establish time-based admission policies,
2. Adopt more specific clinical criteria and measures
for inpatient admission
3. Use prior authorization
4. Explore changes in payment policy
• CY 2013 OPPS Final Rule: CMS thanked
Stakeholders for their comments.
• Proposal likely in FY 2014 Inpatient PPS rule
ACA Insurance Reforms and
Medicaid Coverage Expansions
• Implementation of ACA insurance reforms
are moving fast
• New AHA Member Advisory
• Today’s Update
– Insurance Marketplaces (Exchanges)
– State Decisions on Medicaid Expansion
State Decisions on Health Insurance Exchanges
Dark Blue = State-Based (18 States ) Red = Federal-Based (26 States)
White = State and Federal Partnership (7 States)
Source: Kaiser State Health Facts Updated 2/15/13
Where States Are Regarding Medicaid Expansion
Dark Blue = Expanding (17 States), Light Blue = Leaning Toward Expansion (9 States),
White = Undecided (4 States), Pink = Leaning Against Expansion (8 States),
Red = Not Expanding (13 States)
Source: Politico Pro Exchange Medicaid Watch 2/26/13
Medicaid DSH ACA Provisions
Federal Medicaid DSH funds reduced beginning in
FY 2014
• States grouped by:
1. High DSH
2. Low DSH
3. 1115 Waiver Expansion States
• DSH payment reductions and distribution based
on:
1. A state’s percentage of remaining uninsured; or
2. whether a state targets DSH payments to hospitals
serving a high volume of Medicaid inpatients and
hospitals that have high levels of uncompensated
care (excluding bad debt).
Allied Advisory Committee On Health Care
Implementation
MEDICAID DSH Principles
1. Medicaid DSH should continue.
2. Definition of uninsured should be
inclusive.
3. State flexibility in design of Medicaid DSH
program.
4. State flexibility in how states raise
Medicaid DSH funds.
5. If ACA promised coverage is not realized
Medicaid DSH funding reductions should
be restored.
EHR Update: Incentives Paid by
Quarter (in Billions)
$3.0 b
$1.8 b
$1.9 b
$1.4 b
$1.5 b
Q3
Q4
Medicaid
Medicare
$1.1 b
FY 2011
Q1
Q2
Q1 2013
FY 2012
Total paid to date: $10.7 billion
Source: CMS data thru December 2012
© 2012 American Hospital
EHR Update: Incentive Programs
At the end of December 2012:
• About 40% of all hospitals had successfully attested to
meaningful use and received a Medicare incentive
(2,134 hospitals)
• Among CAHs, the share was less than 25% (314 CAHs)
• 106,000 physicians had met meaningful use
• To receive maximum Medicare incentives:
– PPS hospitals must first attest to meaningful use for
FY 2013
– CAH hospitals must first attest for FY 2012
Source: CMS data through December 2012
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© 2012 American Hospital
Association
EHR Update:Timelines for Meaningful
Use Policy
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Stage 1 rules currently effective
Stage 2 begins on October 1, 2013
Preliminary work underway on Stage 3
All hospitals will have to upgrade to
“2014 Edition EHR” in FY 2014,
regardless of stage
• Concerns:
– Ensuring widespread adoption
– Vendor capacity, readiness, costs
– Lack of real interoperability
– Quality reporting via EHR still a
challenge
– Interaction with ICD-10 and health
reform
340B Drug Pricing Program and GPO
Exclusion
HRSA issues 340B Program Notice on “Clarifying
Guidance” on GPO Prohibition February 7
Statutory GPO Prohibition applies 340B Hospitals
that are DSH, Children’s or free standing cancer
Feb 7 340B Notice addresses:
Inventory Management Systems using
Replenishment Models
No GPO for onsite clinics or pharmacies (could
apply to employee pharmacies)
Compliance Date April 7, 2013
340B Drug Pricing Program and GPO
Exclusion
AHA Advocacy Action:
March 7 call with HRSA
and HRSA Prime Vendor
Program –Apexus
March 15 Meeting with
HRSA OPA Leadership
March 20 Call with AHA
340B Alliance
Exploring other strategies
AHA Advocacy Agenda
Allied Hospital Associations’
Accounting & Financial Specialists
(A2HA)
2013 Spring Meeting
March 18, 2013