Transcript Augusta Medical Group Physician Business Meeting Strategic

2015 General Assembly
Hospital Issues
2015 – a “Short Session”
• 1,865 Bills Introduced from Senate
• 1,143 Bills Introduced in House
• 3,008 Bills Reviewed in 6 Weeks!
Significant Legislative Issues
in 2015 General Assembly
 Certificate of Public Need (COPN)
• HB2177 Orrock SB1283 Martin
 COPN would not be required for the following:
• New Beds or new ORs to an existing general hospital, psychiatric or
rehab hospital beds
• Open heart surgery in hospitals performing 1,100 adult cardiac
catheterizations or discharged at least 800 patients with principal
diagnosis of ischemic heart disease
• Neonatal special care services at an existing medical facility delivering
more than 1000 infants (effective January 2017 pending secretary
review)
• Capital expenditures by general hospitals
HCA
 For profit chain of hospitals (largest chain by revenue)
 Tremendous economic success (Medicaid expansion
states)
 Added to S&P 500 on January 23, 2015
• Share price rose by 50% due to 2014 performance
• Significant event - $68.64/share  $29.6 billion capitalization
• New markets: index funds and exchange traded funds
 165 hospitals, 115 free standing surgery centers
 6 hospitals, over 70 outpatient centers in Virginia
Issues Relevant to Hospitals
 If COPN is eliminated, new providers will enter market and
compete for high margin services:
• Imaging Centers
• ASC’s
• Cancer
• Cardiac
 Hospitals will be the providers for indigent patients and poor
payer patients
 Hospitals will be compromised in their ability to provide safety
net services, fund charity care, drive economic growth
(employer)
 Currently 1/3 of Virginia hospitals operated in the red for 2014,
mostly in rural areas
Issues Relevant to Hospitals
 Will impact quality in those services where high volumes are
required for proficiency
 VA will lose the opportunity to impose charity care conditions on
new COPN projects approved by the Commissioner of Health
 Could impact Virginia hospitals credit rating
Final Legislation approved by House and Senate
• Eliminates definition of “reviewable project” for a
capital expenditure of $15 million or more for
hospitals when no other COPN reviewable
project is involved
• Mandates a study of COPN to evaluate
deregulation with study results by November
2015
“Responsible Deregulation”
 Augusta Health is not opposed to competition –
as long as there is a level playing field
 Augusta Health supports a pathway to deregulation
as long as key factors addressed, key actions
implemented and outcomes are measured
“Comprehensive Approach”
Issue
Framework
Access to Care for
Uninsured
Expand coverage
Availability of Essential
Services
Correct Medicaid Underpayment
Readiness for Public
Health/Disaster Care
Training of Future
Healthcare Workforce
Support Healthcare Workforce
• Adequate funding for
Graduate Med Education
Training programs
Quality of Care Oversight
Level Playing Field
Licensure, Accreditation,
Mandatory Outcomes Data
Reporting
Charity Care Requirements
Provider Tax
Why Provider Tax?
 Based on a scheme that if the providers pay into an
assessment levied by the state, it will increase the pool of state
dollars eligible for the federal match
 This increases the pool of Medicaid dollars paid back to
providers in the form of enhanced base rates
 These programs are used in 40 states
Provider Tax
 Based on federal financial participation in state Medicaid
expenditures
 Federal Medical Assistance Percentages (FMAP) are
determined for every state
• Compares state income to continental US income
• No state ratio goes below 50% or above 83%
 Virginia FMAP is 50% or $1
 For every dollar the state puts into Medicaid, the federal
government matches with $1
 There is a cap known as the Upper Payment Limit (UPL)
Current Situation
 No Medicaid expansion in Virginia
 Sentara, INOVA, and Carilion formed a coalition to address
inequity of indigent care payments in VA
 State teaching hospitals (VCU & UVA) receive majority of
state’s allocation of Medicaid and Indigent Care Funding
 State teaching hospitals receive majority of state funds for
other supplemental payments
• GMED
• Trauma
Current Status of Provider Tax Issue
• Senate and House passed budget language to
study the provider tax issue, with a study and
design recommendation due in November 2015
Questions?