Federal Legislative Update Maggie Elehwany NRHA Vice President
of Government Affairs
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Today: Unprecedented political challenges continue for Critical
Access Hospitals Administration Presidents Budget HHS Inspector
General Report Affordable Care Act America Recovery and
Reinvestment Act Sequestration Capitol Hill MedPAC CBO
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2014 is an election year shaped by the recent politics.
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Toxic climate in Washington continues 2014 is another partisan
year. How does that impact rural patients and Critical Access
Ho?
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Partisan politics have impacted rural programs that were once
supported by strong bipartisan support. National fiscal crisis.
Complexities of rural health funding and lack of institutional
memory means education on Capitol Hill is critical. Must overcome
Hill attitude that rural providers: o get bonuses simply because
they practice in rural areas; and o Rural providers double dip and
abuse system. The challenges of the 113 th Congress
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Rural champions exit Congress Many other rural champions are
also leaving or have left Sen. Harkin (D-IA), Sen. Rockefeller
(D-WV), Sen. Inouye (D- HI), Sen. Conrad (D-ND), Sen. Bingaman
(D-NM), Sen. Lugar (R-IN), Sen. Snowe (R-ME). Senator Max Baucus
(D-MT) leaves Chairmanship. Sen. Ron Wyden (D-OR) becomes new
Senate Finance Chair.
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Despite climate, rural victories were achieved Rural providers
were to lose hundreds of millions in Medicare payments if Congress
did not act by March 31. What was at stake? For Rural Doctors:
27-32% cut in Medicare reimbursement rates SGR expiration GPCI
expiration For Rural Hospitals: Medicare Dependent Hospital 12%
loss of Medicare revenue; need to make up 18% from private insurer.
Low Volume Hospital -- approx. $500,000 per hospital and can mean
well-over $1 million. For Rural Ambulance Providers 22.6%
reductions
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Victory Specifics: Extended vital rural Medicare payments until
March 31, 2015 LVH MDH Rural and Super-rural ambulance payments
Therapy Caps GPCI Importance: Rural hospitals in Kentucky will
close. Elizabeth Cobb, VP Kentucky Hospital Association 12-month
delay of SGR cuts PLUS: ICD10 one year delay of transition; Two
Midnight Rule - Delays enforcement of the CMS two-midnight policy
for an additional 6 months (through Sept. 31, 2015); and prohibits
recovery audit contractors from auditing inpatient claims spanning
less than two midnights for the 6-month period.
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What wasnt in there? 96-Hr Rule, Physician Supervision NRHA
Concerns over 96-hour rule Implementation of rule: strangles CAHs;
impedes patient care; exacerbates workforce shortages Capitol Hill
strategy Administrative strategy Key Legislation: Critical Access
Hospital Relief Act
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Why didnt a permanent fix happen? Werent the stars aligned? CBO
Score Physician Groups full court press Actual bipartisan and
bicameral agreement on SGR replacement. Not quite: Election year -
- pay- fors became a partisan fight. Reid has concern over making
vulnerable Ds take a tough vote: Landrieu, Hagan, Begich and Pryor.
Wyden is still trying to get a handful of Republican Senators to
support his bill. However, CBO just re-scored the bill - - it now
has a much higher price tag!
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Lets Focus on Challenges to Critical Access Hospitals 39 CAHs
in Washington State 1.Health Care Reform $225 billion in cuts to
hospitals/Exchanges/Medicaid expansion 2.Sequestration 3.Threats to
cut more rural Medicare payments
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Health Reform Goal: insure 36 million uninsured. Extreme
registration problems. Enrollment numbers exceed expectations: 8
million; 35% 18-30 year olds. Big PR push by White House. Millions
invested. Some private insurers rate hikes DSH and uncompensated
care cuts Is it right from rural?
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State Exchange Problems Oregon is the first state to abandon
its attempts to run its own exchange. Now will join 34 other states
in Federal Exchange. A confluence of technical, system,
organizational and management problems blocked Cover Oregon from
functioning normally since its scheduled launch in October
2013.
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Are the Health Exchanges working in rural? National Rural
Health Task Force Data 34 Federal Health Exchanges examined for 1)
Availability; 2) Competitiveness; and 3) Affordability
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Competitiveness 58.3% of rural counties only had 1 or 2 plan
options 23.7% of rural counties vs. 5.5% of urban counties had only
1 plan option Over of urban plans had three or more choices of
coverage Affordability : Residents of rural counties face slightly
lower median premium costs for all levels of coverage than do
residents of urban counties. This multi-state conclusion may not
apply in any single state. :
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ACA Exchanges - - Concerns for CAHs High deductibles result in
high compensated care. Are rural providers being left behind? CAHs
are deemed essential community providers but there has been
difficulty/confusion. States choosing to not expand Medicaid
creates new donut hole.
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MEDICAID Disproportionately important to rural America (rural
patients and rural economies). One-half of all newly insured under
ACA will be covered by expanded Medicaid. (Estimates are 5 million
in rural will be covered.) Supreme Court decision: Allowed states
to opt-out or seeking waivers 20 states are opting out - - creating
a new gap in coverage.
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Uncompensated Care Cuts Health cares $85 billion challenge
uncompensated care in the Obamacare age An Estimated $84.9 Billion
In Uncompensated Care Was Provided In 2013; ACA Payment Cuts Could
Challenge Providers Health Affairs
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Loss of over $1billion in CAH revenue. Tens of millions of
dollars lost for rural PPS hospitals. 41% of rural hospitals
operate at a financial loss; sequestration will force many more
into the red. SGR Patch pay-for; extends non-discretionary
sequestration years. Result: * Rural Job losses; * Rural revenue
lost * Rural patient services cut * Possible rural hospital
closures Sequestration mandated 2% cuts to Medicare providers
extended AGAIN.
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Rural and Urban Comparison of Operating Margin
ProfitableSwitchUnprofitableGrand Total All Rural 739441,5402,323
CAH 363269271,316 Medicare Dependent 628147217 Sole Community
1737262442 Standard Rural PPS 1413204348 Urban 1,166421,1572,365
Grand Total 1905862,6974,688
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Congressional Outlook There does NOT seem to be any significant
push on the Hill to eliminate sequestration to mandatory spending.
NRHA has and will continue to try to exempt rural providers from
these devastating cuts.
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Impact on rural hospitals is detrimental. Sequestration - $58.3
billion MS-DRG Coding Cuts - $35.3 billion Two-Midnight Offset -
$2.4 billion Long-Term Acute Care Hospitals - $3 billion Medicaid
DSH - $16.6 Bad Debt - $2.1 billion Hospitals have absorbed nearly
$122 billion of new cuts since 2010
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Attacks on Rural Hospitals Presidents Budget CBO HHS OIG MedPAC
Congressional Leaders Reduce CAH payments from 101% to 100% of
reasonable cost. Eliminate CAH designation for hospitals that are
less than 10miles from the nearest hospital. Eliminate CAH program
all together and convert hospitals to PPS. Remove Necessary
Provider permanent exemption from the distance requirement.
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OIG Report Attacks CAHs 846 CAHs would not meet the distance
requirement if required to re-enroll 306 were located 15 miles or
fewer to a nearest hospital. 235 were between 10-14 miles from
nearest hospital. 71 were less than a 10-mile drive. If fully
implemented; complete crippling of the rural health system. 70%,
80%, even 90% of rural hospitals in certain states impacted.
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Headway made with Press and Congress NRHA, AHA Slam OIG Report
Urging Cuts To Critical Access Hospitals Inside Health Policy Deep
cuts to Medicare funding would effectively kill rural healthcare.
Modern Healthcare
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New Research/ Rural Hospital Financial Distress Important
series of reports by Sheps Center for Health Research analyzing
proposed cuts to rural providers. Overall: Urban hospitals paid
under PPS had consistently the highest profitability. Rural
hospitals paid under PPS and Critical Access Hospitals generally
had the lowest profitability. Sheps Center for Health Research
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If proposed cuts occur If Congress acts on any of the proposed
cuts to CAHs, there will likely be a reduction of 20-30% in
Medicare payments (depending upon proposal). If 20% reduction: 72%
of CAHs would operate in negative financial margins; 39% would be
at high or mid-high financial risk. If 30% reduction, 80% of CAHs
would operate in negative financial margin; 45% would be a high or
mid-high risk of financial distress. CAHs in the south see the
sharpest increase in risk. Such a substantial reduction in
financial viability could lead to an increase in the number of CAHs
experiencing insolvency, bankruptcy or closure, with deleterious
effects on the health and economic well-being of these
communities.
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CAH Financial Distress by Region
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The headlines are already here 10 Alabama hospitals have closed
in the last 3 years: Will yours be next? Rural hospital closing
hurts more than just the hospital Another Rural Georgia Hospital
Closing
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Rural Hospital Closures: 20 in 2013-14 State breakdown: Alabama
3Nebraska 1 Georgia 4Pennsylvania 1 Kentucky 1Mississippi 1 North
Carolina 1Tennessee 1 Texas 4Virginia 1 The impact
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Critical Access Hospitals are not immune SEQUESTRATION - 2% CUT
TO ALL RURAL HOSPITALS CAH REIMBURSEMENT CUTS (Presidents budget)
ELIMATION OF CAH STATUS FOR NEARLY 50 HOSPITALS (Presidents
(budget) PROPOSAL TO ELIMINATE ALL CAHs (CBO budget proposal)
PROPOSED CUTS IN FLEX AND OUTREACH GRANTS PROVIDER TAX CUTS 35% CUT
UNCOMPENSATED CARE 41% of CAHs operate at a financial loss.
Medicare cuts will mean reductions in services, job loss, or worse,
hospital closures - - jeopardizing rural seniors access to
care.
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We tell our story. Our message is powerful. An investment in
rural health: 1. Protects patients; 2. Protects the rural economy;
and 3. Protects taxpayers How do we fight back?
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Protecting rural patients Access to quality health care is the
number one health challenge in rural America, Rural Healthy People
2010 and 2020 Rural Americans are older, poorer and sicker than
their urban counterparts Rural areas have higher rates of poverty,
chronic disease, and uninsured and underinsured, and millions of
rural Americans have limited access to a primary care provider.
(HHS, 2011) Disparities are compounded if you are a senior or
minority in rural America.
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Death by Zip Code University of Washington Study, July 2013
Largest report on status of Americas health in 15 yrs. Health
equates to wealth and geography. The study found that people who
live in a wealthy area like San Francisco, Colorado, or the suburbs
of Washington, D.C. are likely to be as healthy as their
counterparts in Switzerland or Japan. Those who live in Appalachia
or the rural South are likely to be as unhealthy as people in
Algeria or Bangladesh. For example: Women in Marin County,
California, where the median household income is $89,605, have the
highest life expectancy -- 85 years Women in Perry County,
Kentucky, with median income $32,538, have the lowest life
expectancy just under 73 years.
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A half century of political efforts Owsley County is a county
located in the Eastern Coalfield region of Kentucky. As of 2010,
the population was 4,755. According to the 2010 Census reports,
Owsley County is the "poorest county in the United States. Robert
F. Kennedy famed poverty tour highlighted the malnutrition of
eastern Kentucky (field hearings on hunger). His tour was not a
unique event: his brother John had planned to come in December of
1963, Johnson, Nixon, Ted Kennedy, Bill Clinton, Paul Wellstone all
conducted "poverty tours" that included eastern Kentucky.
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Rural lifestyles Portrait of Kentucky Obesity, a major risk
factor for disease and disability, is most prevalent for men in
Owsley, Kentucky and women in Issaquena, Mississippi; obesity rates
for men are lowest in San Francisco and for women in wealthy Falls
Church, Virginia.
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2. Rural Economy Health care is the fastest growing segment of
the rural economy. On average, 14% of total employment in rural
areas is attributed to the health sector. Natl. Center for Rural
Health Works. (RHW) The average CAH creates 107 jobs and generates
$4.8 million in payroll annually. (RHW) Health care often represent
up to 20 percent of a rural community's employment and income.
(RHW) If a rural provider if forced to close their door
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3. The Taxpayer Rural hospitals are cost-effective Less
spending per beneficiary Apply the rural rate of spend to urban
beneficiaries Total savings if all beneficiaries were treated at
the rural equivalent? In Potential Medicare Savings Rural vs. Urban
Spending Source: Rural Relevance Under Healthcare Reform 2014,
Study Area B. * * Approximate Totals Medicare spends less on rural
beneficiaries than on urban beneficiaries
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Delivering Value Quality Patient Safety Patient Outcomes
Patient Satisfaction Price Time in the ED Data sources include CMS
Process of Care, AHRQ PSI Indicators, CMS Outcomes, HCAHPS
Inpatient/Patient Experience, MedPAR, HCRIS Study Area C Hospital
Performance Source: Rural Relevance Under Healthcare Reform 2014,
Study Area C. Rural Urban Who has the edge? Rural hospitals match
Urban hospitals on performance at a lower price
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Medicare Reimbursement (Parts A and B) (2008) Source: The
Dartmouth Atlas (Age, Sex, Race and Price-Adjusted Medicare
Reimbursements per Beneficiary), weighted averages by HSA
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The Challenges Ahead - - its all about education Over 150 new
members of House of Representatives in last two years. Many
champions are no longer in Congress. Fiscal conservatives view
rural payments as special or bonus
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Rural Hospital Closures: 1980-90
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The History of Rural 1986 46% of ALL community hospitals were
located in rural, non-MSA, counties During the 80s nearly 10% of
all U.S. rural hospitals closed [Hart et. al, 1991] 1992-1999 --
122 Rural Hospitals Closed Nearly 60% of rural hospitals gross
revenue come from Medicare and Medicaid Approximately 439 Rural
Hospitals in 20 years! Moscovice, I.: Rural hospitals: a literature
synthesis and health services research agenda. Dec. 13-15, 1987 (a)
p. 4 OIG Report Trends in Rural Hospital Closure 1987-1991, July
1993
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Finally, Congress intervened Created Sole Community Hospital,
Medicare Dependent Hospital, Low- volume Hospital Adjustment, Hold
Harmless Payment, Critical Access Hospital (Balanced Budget Act of
1997). Over the past 11 years, 7 more pieces of legislation have
resulted in the modification of the CAH program.
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They arent called Critical for nothing Each year, Critical
Access Hospitals provide care for: 7 million emergency room visits
38 million outpatient visits 900,000 admissions 86,000 babies
delivered
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Key CAH Legislation
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CAH 96 Hour Condition of Payment 42 USC 1395f(a)(8) stipulates
payment; Leftover from original CAH statute; Recent research into
two-midnight rule uncovered; NRHA working to eliminate subparagraph
8 S. 2037 H.R. 3991
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Rural Veterans Legislation Goal: Rural veterans should have the
choice to access care from their home community. 40 mile
threshold
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Physician Supervision Regulatory change as part of IPPS rule in
2009 Enforcement moratorium in place since then expired last year
NRHA supported legislation would set supervision to general for CAH
and PPS S. 1143 H.R. 2831
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Regulations: IPPS for FY 2015 Implements new MSAs established
by OMB in 2013 based on 2010 census. This implementation will
require dozens of CAHs to recertify as rural under federal rules.
These facilities will have 2 years to recertify or convert to PPS
status.
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IPPS 2015 Cont. Provides additional clarityand some relieffor
the physician certification requirement of the 96-hour rule
Providers will now be able to provide the certification up to 24
hours before the claim is submitted (pg. 837)
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IPPS 2015 Implements other policies included in the last SGR
package including: LVH payments MDH payments ICD-10 delay
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RHC/FQHC New Concerns CMS issued new guidance stating that a
previous guidance indicating that preventative services were
independently billable was in error. Because RHCs and FQHCs are
paid an all-inclusive per visit rate rather than per service, CMS
claims it was a mistake to allow billing that was outside Welcome
to Medicare visit or an Annual Wellness Visit An appropriate
E&M HCPCS code would also need to be on the claim in order to
be paid. Specific language published by one of the Medicare
contractors: HCPCS G0101, Cervical or vaginal cancer screening;
pelvic and clinical breast examination and Q0091, screening
papanicolaou smear, are not considered to be a medically necessary
face-to-face visits and will not be billed or paid at the
all-inclusive rate when performed alone. The RHC/FQHC policy
announcement goes on to state, Claims billed with a preventive
service code(s) that does not generate a separate payment without
another covered service will be rejected
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Rural veterans Administration may advance more collaborative
efforts between VA and other health care providers. NRHA asks
Senators Moran (R-KS) and Tester (D-MT) to intervene to ensure that
rural providers are not left behind.
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We Need You Join our Grassroots Efforts Support Key Rural
Legislation: S. 2359 R-HoPE Act S. Res. 26 S. 2037/HR 3991, the
Critical Access Hospital Relief Act - Repeals the 96-hour physician
certification requirement for CAHs HR 3444, Critical Access
Hospital Flexibility Act S. 1143/HR 2801, Protecting Access to
Rural Therapy Services (PARTS) Act SEE NRHA LEGISLATIVE
TRACKER
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Washington Congressional Delegation Get Involved Importance of
your association Importance of your involvement