STATE LEGISLATIVE ISSUES FEDERAL BUDGET ISSUES

WASHINGTON POLITICS

HFMA West Virginia ChapterJoe LetnaunchynPresident & CEO

West Virginia Hospital AssociationOctober 10, 2013

CURRENT HEALTHCARE ISSUES

• 2013 WV State Legislative Session

• Medicaid payment issues

• Medicare Payment Issues

• What’s next in Washington, DC ??

2013 WV Legislative Session

2013 WV Legislative Session

• 60-day session - delayed one month due to elections• More than 2,000 bills introduced only 190 passed• Focused on education transformation and prison overcrowding.• Last year’s primary focus was on substance abuse

2013 WV Legislative Session

More healthcare bills that passed:• SB 21 – Healthcare transparency act: “AKA” name tags – 2015 rules but vetoed by Governor for technical flaws• SB 355 – Final payment of employee wages after termination – 3 business days• HB 2383 – maternity coverage to dependents

under PEIA• SB 335 – special Certificate of Need exemption for

Weirton Medical Center• HCR 117 – Study of the CON program – joint Health

Committee meeting held in July

HB 2108 – Mandatory Use of Seatbelts

2013 WV Legislative Session

Healthcare bills that did not pass:• $$ cap on payments to providers by external parties for copies of patient medical records:

Originated in House Judiciary Committee, but…. Assigned to House Health Committee – died in Health Committee Will be an ongoing problem in 2014 in House Judiciary Ongoing conflict with federal vs. state law provisions

• HB 2797 – eliminating the Certificate of Need program

2013 WV Legislative Session

Other healthcare bills that did not pass:• HB 2261 - inmate medical coverage by Medicaid versus State prison system• SB 593 – tobacco tax increase• HB 2383 – reorganization of DHHR

After the 2013 WV Legislative Session

• Appointment of new DHHR Cabinet Secretary• New Speaker of the House• New House Committee assignments:

– House Judiciary Committee Chair– House Health Committee Vice-Chair

• Senator Evan Jenkins switches parties in late July: announces Run for the 3rd Congressional District

Medicaid Payment Issues

Medicaid Payment Issues

• Expansion of coverage under the ACA Announcement by Governor Tomblin on May 2nd – federal state partnership Potential for 90,000 new covered lives up to 133% of the FPL Goal of Governor is to is to expand managed care – shift cost risk Causes issues with hospital UPL program Enrollment begins 10/1/2013 Coverage effective 1/1/2014 Federal funding scheduled at 100% percent FMAP rate for the first 3 years – then phases down to 90% federal by 2020.

Medicaid Payment Issues• Managed care expansion for the SSI population being evaluated by DHHR –

about 55,000 lives• Currently covered under fee-for-service program

Implementation not likely to occur before the 2nd quarter of 2014 at the earliest,

but likely will be later

Will be phased-in starting with the Northern panhandle and then move to the southern counties

Requires federal approval by the WVMCAC and CMS Not likely to impact the Medicaid Hospital UPL program for 2013 thru

2014. Discussions ongoing with Secretary Bowling, Medicaid and Governor’s staff

Medicaid Payment Issues

• Hospital UPL program (7/1/13 – 6/30/14): payments to continue without

interruption. Tax rate reduced from 0.88% to 0.45%.• Program benefits 27 acute care facilities• Statewide UPL hospital “net benefit” approx. $57

million in FY 2014 after tax payments.• Actual “net benefit” depends on the level of revenue

and amount of tax actually paid by each hospital.• IGT program also being implemented for 2014.

Medicaid Managed Care Penetration

Federal Payment Issues

Federal Payment Issues

• Continued uncertainty around the federal budget and provider payments - Medicare and Medicaid.• “Fiscal Cliff” legislation passed on January 1, 2014 reduced Medicare hospital payments over 3 years for the physician-fix: $85 million statewide hit on hospitals 2013 thru 2015.• Next “Fiscal Cliff” for the SGR will occur in December 2013 when the

current one-year fix expires – will hospitals have to fund it again?• 2% Sequestration payment cuts that began in May 2013 are likely to continue.• Numerous other payment cut provisions being considered – have the potential to further reduce provider payments.

Quality Issues Affecting Payments

• Medicare readmissions – implemented 10/1/2012 to eliminate payments for readmissions within 30 days of earlier discharge. Includes, pneumonia, heart failure and heart attack. Significant reduction in the number of hospitals

nationally with readmission $$$ penalties.• Value based purchasing changes – hospital scores

continue to adversely impact payments for some hospitals.

Medicare Readmissions Penalties at Work

• Modern Healthcare – August 2013• 40% of hospitals reduced their penalties between 2012 and 2013• 27% stayed the same – no penalties in either year.

• Hospitals with the maximum (2%) penalty reduced from 274 hospitals in 2013 to 19 hospitals in 2013.

Another Potential Risk

• Sequester for defense (and other discretionary programs) are STOPPED, but • Medicare sequester for provider and

payments continue

• Replacement savings from entitlement programs……ON TOP OF SEQUESTER

Continuing Resolution

• Expired on March 27, 2013

• House proposal – continue at current funding levels with flexibility for Defense spending

• Senate proposal – continue current funding levels and create four different departments

• Expected Resolution – deadline October 1, 2013.

House Budget “Resolution”

• Completed in mid-March – similar to last year’s proposal• ACA

Repeals coverage (again), but maintains provider cuts

• Medicare$127 billion in cutsIncludes numerous provisions

• Medicaid$756 billion in cutsBlock grants to states

• Outlook: Unlikely

House Payment Reductions: Hospitals

Same options as before• Prospective coding offset ($8 billion)• E&M coding/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: cap provider tax/assessments ($22 billion)

Senate Budget “Resolution”

• First Resolution in 4 years• Passed only with Democrat support

Half revenue / half spendingMaintains provider cuts

• Numerous healthcare payment cuts$275 billionAcross the board cuts

• Outlook for proposalTo conference committeeBudget is widely different than HouseUnlikely to be reconciled

Senate Budget ResolutionPassed Senate 50-49 on Saturday

morning, March 23, at 5:00 a.m.

Next Steps on Budget Resolutions

• Will there be a conference (committee) between the House and Senate?• Not yet!!

April 2013 Gallop Poll

Obama Administration Scandals

Summer Vacations

Syria – Another Congressional Distraction

Washington, DC Navy Base Shooting September 16th

Upcoming Fiscal Cliffs• Appropriations: October 1st

• Debt limit: Mid-late October

• Physician payment fix: December 31st

Upcoming Fiscal Cliffs• Appropriations: October 1st

• Debt limit: Mid-late October

• Physician payment fix: December 31st

Upcoming Fiscal Cliffs• Appropriations: October 1st

• Debt limit: Mid-late October

• Physician payment fix: December 31st

Washington DC “Fall Preview”

Washington DC “Fall Preview”

• Congress must agree on government funding beyond September 30th – end of the FFY.• House & Senate >$89 billion apart on spending

levels: $42 billion just with health, labor & education issues.

• Sequestration looms even if spending bills are passed.

Washington DC “Fall Preview”

• After the CR debate is “resolved”, the nation’s borrowing/debt limit must be addressed:– Mid-October is the likeliest timeframe– Government shutdown not likely on the table – Republicans will likely use the issue to argue for changes in health care reform – delay the individual mandate.

• Most likely scenario: short-term CRs to freeze spending at sequestration levels, or a “mini-bargain” to resolve spending differences thru 2014

• May involve spending cuts proposed by the President

Washington DC “Fall Preview”

• Less likely scenario: a “grand-bargain” resulting in a debt-reduction deal to replace Sequester cuts.• Least likely scenario: government shutdown or default on debt.• Syrian debate will be a big distraction to

resolving financial issues this Fall – few legislative days remaining this Fall

• Congress in session for only 7 days in September

Late September Activity

• House passes CR on Friday September 27th with budget funding through mid December. • Includes provision to defund Obamacare.• Senate (Democrats) strip out the ObamaCare

provision and pass it along party lines – back to the House the following

Monday.

Health Insurance Marketplace

• Qualified health plans:– Offered by an insurer licensed by the state and in good standing – Highmark WV is the only plan for now.– Covers essential health benefits.– Offers four tiers of coverage – bronze, silver, gold, and

platinum.– Is offered by an insurer that offers at least one plan at

both the silver and gold levels with cost sharing.– Hospitals encouraged to apply for designation as

“Certified Application Counselor Organizations” – requires CMS approval.

Health Insurance Marketplace

• Essential health benefits– Ambulatory and emergency services– Hospitalization– Maternity & newborn care– Mental health and substance abuse disorders, including

behavioral health treatments– Prescription drugs– Reba and habilitative care and devices– Laboratory services– Preventive & wellness services and chronic disease

management– Pediatric services, including oral and vision care.

Health Insurance Marketplace

• Consumer protections:

– Plans cannot charge more or deny coverage based on pre-existing conditions or gender

– Limits on premium variations based on age – Annual and lifetime limits are banned– All plans include an out-of-pocket maximum

Health Insurance Marketplace

• Coverage eligibility requires an individual to:– Live in the health plan’s service area– Be a U.S. citizen. – Be a non-citizen who is lawfully present in the U.S.

for the entire period for which enrollment is sought.– Cannot be incarcerated – but, you can apply for

coverage if pending conviction.

Health Insurance Marketplace

• Open enrollment period:

– Marketplace “initial” enrollment period starts October 1, 2013 and ends March 31, 2014.

– Annual open enrollment periods after that start on October 15 each year and end December 7.

Health Insurance Marketplace

• Premium tax credits:– Eligibility based on household income: 100% to 400% of FPL ($23,550 to $94,200 for a family of 4 in 2013.– Obtain coverage through the marketplace.– Mot eligible for government-sponsored coverage;

employer sponsored coverage; or other minimum essential coverages.

– Subsidy premiums paid directly to the health plan– Dropping coverage is currently allowable by health plan

for non-payment of premium – will result in cost shift and uncompensated care to providers.

ObamaCare Implementation Delays

OBAMACARE COST CAPS DELAYED UNTIL 2015

Union dumps AFL-CIO for its positions on ObamaCare, Immigration Reform: Fox News Sept 3, 2013

The International Longshore and Warehouse Union has cut ties with the AFL-CIO, citing in part the private-sector union’s support for ObamaCare and immigration reform.

VS.

Changes to Health Benefits

WVHA Website – Healthcare Marketplace

WV OIC

Offices of the Insurance Commissioner Marketplace Mainpage WV Marketplace Analysis CCRC State-Federal Partnership Blueprint

Enrollment

CMS Champion for Coverage Signup CMS Certified Application Counselor Signup AHA Enrollment Advisory July 22, 2013 CMS Navigator and Assister Summary Assisters Fact Sheet Enroll America Enroll West Virginia

A Citizens Guide to Enrollment in WV

WVHA Marketing / PR Campaign

• State of WV turned down federal funds for marketing of coverage.

• WVHA Plan, with a focus on hospitals, approved Monday, September 9th:

– Radio spots on Metro News (Hoppy Kercheval Metro News Talk Line) September 16 thru mid-October.

– Banner ads online in the Charleston Gazette; Charleston Daily Mail: and the Metro News website.

– Evaluating TV ads at evening news time – pending cost estimates.

THANK YOU

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