State and Federal Health Care Legislation

Lawrence MassaMinnesota Hospital Association

May 17, 2012

The good news continues ….

Well … not so fast …

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State Health Care Legislation

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State Issues:Community benefit

Passed repeal legislation keeping hospitals’ community benefit activities locally determined.• Unanimous support in House and Senate• Repeal of new rider language from 2011 • Funding language for Statewide Health Improvement

Project (SHIP) remains

State Issues:Provider Peer Grouping

Passed a Provider Peer Grouping “fix-up” language in same bill as community benefit.• Allows providers to verify their data• Requires better risk adjustment for high cost services

like trauma, medical education and neo-natal ICU• Creates a stakeholder/expert advisory committee• Expands scope of appeals (peer group, calculations,

methodology and data)• Requires use of most current data available• Eliminates requirement that health plans use PPG in

product design

State Issues:HHS Omnibus Bill

Allow Medicaid coverage for inpatient mental health services delivered by a physician assistant acting under psychiatrist’s supervision

Further restriction on release of medical records• Expands liability for unauthorized, intentional access via

record locator service• Requires study by Department of Health to examine

capability of detecting unauthorized attempts to view a patient’s medical records

Establishes a 10-day window for DHS prior authorization for PT/OT, speech, audiology and mental health services, otherwise authorized

State Issues:HHS Omnibus Bill

Restores Emergency Medical Assistance coverage for dialysis and cancer treatments

Repeals Minn. Rule that required physician authentication (signature) of verbal/emergency orders within 24 hours

State Issues:Radiation Therapy

The current moratorium in 14 counties stays in place until 2014

After 2014, can’t build a new radiation facility within 7 miles from a current facility

Maintained the requirement that any new radiation facility must be built in collaboration with a hospital

State Issues:Miscellaneous

Enacted a new felony-level offense for intentional deprivation of a vulnerable adult.• Provides affirmative defenses for caregivers acting in good

faith Amended MN’s No-Fault Auto Insurance statute.

• Restricts the use of “runners and cappers” which can generate inappropriate health care services.

• $20,000 in medical coverage remains in place. Newborn screening bill responds to court ruling

• Opt-out for testing• Opt-in for allowing MDH to store sample for 18 years

Other policy issues raised but not enacted

Interstate Nurse Licensure Compact Partial restoration of Medical Education Research

Costs (MERC) Health Insurance Exchange 1-year restoration of 5% cut to outpatient

provider rates Leapfrog mandate

Other policy issues raised but not enacted

Mandatory nurse-to-patient staffing ratios• Bills introduced (SF 2182; HF 2618)• MHA successful at keeping bills from getting hearings

in either House or Senate• Major, contentious issue for 2012 elections and 2013

sessiono MN hospitals already provide safest, highest quality care in

the countryo Mandated ratios not shown to improve care safety or qualityo Hospitals need flexibility to staff for patient acuity and

caregivers’ experience/skill levelo Mandated ratios increase the cost of care significantly

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Attorney General Agreement

Current Requirements:Based on 2005 agreement &2007 extension

Cap on charges to uninsured• Uninsured pay amount equal to what hospital’s “Most

Favored Insurer” pays Adopt charity care and debt collection policies Limit debt collection litigation (and litigation-like)

• Limit on garnishment, contingency fees, credit bureau reports

• Requires senior corporate officer review at each step of litigation process

Modifications in new extension

5-year extension Modify Attorney General contact information on

hospital collection notices so patients contact hospital first, then AG if issue is unresolved

Clarify that hospitals may respond to patient inquiries verbally, not just in writing

Place picture hereFederal Issues

Federal budget not getting any prettier

Rep. Paul Ryan budget proposal• Shift Medicare to voucher program• Shift Medicaid to block grant

Debt ceiling deal from 2011 called for 2% across-the-board cuts• Goes into effect Jan. 1, 2013• Includes Medicare and critical access hospitals• Will not apply to Medicaid

President Obama proposed additional hospital and provider cuts

Critical Access Hospitalsno longer “under the radar”

President proposed cutting payments 1% President proposed eliminating CAH status for

hospitals within ten miles of another hospital• Others proposed 20 miles

Independent Payment Advisory Board pending• 15 members appointed by the President• Required to cut $13 billion in six years from

CAHs, physicians or other non-hospital providers (while physician sustainable growth rate cuts remain unresolved)

Health Reform:Trends and

Speculations

ACA in Limbo

Meanwhile . . .

States are spending hundreds of millions of dollars in federal grant funds to construct health insurance exchanges

Insurance plans extended coverage to dependent children up to age 26

Minnesota expanded Medicaid to cover childless adults up to 75% of FPL

All dependent on legality of ACA

Health care reform initiatives in Minnesota

Gov. Dayton began early Medicaid enrollment• 100,000+ people eligible for Medicaid coverage• Decrease uninsured population by 28,000; decrease

underinsured population by 75,000• Medicaid is more meaningful coverage with statewide

access to providers Gov. Dayton building health insurance exchange

• Using more than $36 million in federal grants• Controversy with GOP legislators over authority to spend

federal grants without enabling legislation• State must make substantial progress on Exchange by 2013

or federal government will run MN’s Exchange

Health Care Home:Minnesota’s medical home model

Requires certification by the state Multiple payers participating

• Medicaid• State employees• Medicare• Commercial

Care coordination fee varies based on number of chronic/complex conditions from $10/month for 2 conditions to $60 (Medicaid) or $45/month (Medicare) for 10 conditions

Health Care Home:Minnesota’s medical home model

150 clinics certified in MN so far• Provide care for 438,000 non-Medicare

patients, although many, many fewerhave enrolled to receive health care home services

• Total Medicaid care coordination fee payments to providers are much smaller than predicted because of lower-than expected enrollment

Bundled payments

Lump payment for services patient receives from multiple providers for same episode or condition

Flexibility in program • Benefits providers assembling bundles• Makes it more difficult to for other providers to

discern what works, best practices, etc. Integrated or collaborative providers have

better opportunity to succeed

Bundled Payments

MHA members applying for CMS’ Bundled Payment program• MHA-led consortium of 8 hospitals

CentraCare Fairview Southdale Fairview RidgesFairview UMMC North Memorial RegionsPark Nicollet St. Luke’s

• Other MHA members submitting applicationsEssentia HealthEast Mayo

Accountable Care Organizations Group of providers that agree to care for an entire

population of patients & achieve quality and cost thresholds

Medicare proposed Shared Savings Program• Min. 5,000 Medicare beneficiaries• 33 quality measures required to be reported

• 2-4% savings threshold before eligible for shared savings bonus

• Withhold of 25% of any savings bonus• soon

Accountable Care Organizations

MHA seeking rural ACO modelsfrom CMS Center for Innovation

Micro-ACOs• Specify smaller region, subpopulation of patients

(e.g., dual eligibles), and less financial risk• Focus on total cost of care coordination, not

necessarily total cost of care delivery Uncoupled-ACOs

• Non-hospital-provider ACO within community/region• Allow CAH to retain cost-based reimbursement• Create financial rewards for ACO/community

providers based on total cost (including hospitalization) and quality

Three Minnesota health systems certified as Pioneer ACOs by CMS

• Allina Hospitals & Clinics

• Fairview Health Services

• Park Nicollet Health Services(also participated in Physician Group Practice demonstration)

Accountable Care Organizations

Accountable Care OrganizationsMedicaid

Demonstration projects on the horizon• State issued Request for Proposals (RFP), which gave

hospitals more flexibility• Contract negotiations on-going• Nine applicants

CentraCare Children’s Hospitals EssentiaFairview FQHCs in Twin Cities Mayo ClinicNorth Memorial Park NicolletAllina

Hennepin County has similar, ambitious project • Includes corrections, social services, courts, etc. as well

as health care in total cost of care calculation

Examples of ACO considerationsfor potential partnerships

Potential provider/partner must• Meet defined performance measures on quality,

experience and cost• Have capability to use ACO network’s resources and

optimize transitions of care• Share clinical and financial data with ACO• Commit to use ACO’s analytics, metrics• Participate in case review and performance

improvement discussions• Use or refer to other ACO network providers• Help reduce ACO network’s readmissions

Health systems are responding to demand for more integrated care delivery and financing

Questions&

Discussion