cahs the aca and beyond john t. supplitt, senior director aha section for small or rural hospitals...
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CAHs the ACA and BeyondJohn T. Supplitt, Senior DirectorAHA Section for Small or Rural
Hospitals
10th Mid-South CAH Conference
1.Political Environment2.Funding the Federal
Government3.Regulatory policy
a.Routine and other rulemaking
b.ACA implementation3.Rural hospital advocacy
agenda
Agenda
December 31, 2012
“We Were Warned”• Moratorium on
Medicare physician cuts expire
• Payroll tax cut expires• Bush tax cuts expire• Sequester scheduled to
kick-in• Debt ceiling will need
to be extended, AGAIN
Piling On Rural• CBO “options” document - $62B
in savings if eliminate CAH, MDH, SCH
• Biden Group/Rep. Cantor - $14B to reform rural hospitals
• House Ways and Means “options” document – references CBO options
• Pres. Obama proposal to “supercommittee”– Reduce CAHs payment of 101%
of costs to 100% – Prohibit CAH designation for
those CAHs that are less then 10 miles from nearest hospital
• MedPAC principles
Old Vulnerabilities
New Vulnerabilities• Reductions in payments to hospitals for assistance
to low-income Medicare beneficiaries (bad debt);• Reductions in payments for evaluation and
management services provided in hospital outpatient departments;
• Extending the current cap on exceptions process to therapy services provided in hospital outpatient departments;
• Weakening prohibition on the establishment of new physician-owned specialty hospitals, and relaxing the restrictions for growth; and
• Providing the CMS with new authority to make additional across-the-board cuts to Medicare inpatient hospital rates through the use of retrospective coding adjustments
House FY 2013 Budget
• Convert Medicaid into a block grant program – reducing federal spending $5 B in FY 2013 and $810 B over 10 years
• Rescind individual subsidies and Medicaid expansions in the ACA, but keep $500 billion in Medicare cuts
• Increase the Medicare retirement age by two months per year until it reaches 67
• Combine Medicare Parts A and B• Increase means testing for Parts B and D.
• Eliminate for one year the 2% defense and domestic discretionary spending cuts sequestered under the Budget Control Act
• Retain 2% Medicare cuts – sequesters $6 B over 10 years
• Transition Medicare to a premium support program in 2023
Reductions to Medicare payments: • Bad debt. • Indirect Medical Education
(IME). • Rural providers. • Post-acute care. • Independent Payment Advisory
Board Reductions to Medicaid payments: • Medicaid provider taxes. • Medicaid payment formulas. • Medicaid DSH payments.
President’s 2013 Budget
SELECT RURAL PROGRAMS($ in millions)
FY 2011 FUNDING
FY 2012 FUNDING
FY 2013 PRES.
Health Centers 2,481 2,672 2,967
Nat. Health Service Corps 315 295 300
340B Office of Pharm. 4 4 10
Rural Health Policy Develop. 10 10 10
Rural Health Outreach Grants 56 56 56
Rural & Community AEDs .24 1 0
Rural Hospital FLEX Grants 41 41 26
State Offices of Rural Health 10 10 10
Telehealth 12 12 12
President’s 2013 BudgetAnnual Appropriations
On Our (CAH) Radar• Medicare Conditions of
Participation• OPPS Proposed Rule
and Direct Supervision• ICD-10• HUD 242 Financing• Drug Shortage• MedPAC• MBQUIP• ACA Implementation
Regulatory Policy Update
Medicare CoPs
Final Rule• Governance and
Medical Staff• CAH Services• Elimination of
Paperwork• Outpatient Services
Direct Supervision
Advisory Panel on Hospital Outpatient Payment
• Renames the APC panel
• Expands membership to CAHs and SR hospital
• Amends the charter to address supervisionExtends through CY 2012 its enforcement
moratorium on the direct supervision policy for outpatient therapeutic services provided in CAHs and in small and rural hospitals with 100 or fewer beds.
• February 27-28: Supervision Panel Met– Recommended 27 HCPCS codes be
downgraded to general supervision• Next meeting of the HOP Panel: August 27-29• Must identify HCPCS codes that clinical staff
can justify revising from direct to general– Formal presentations, limited to 5 minutes per
individual or organization, – Oral comments, which will be limited to 1 minute
for each individual and a total of 3 minutes per organization
Direct Supervision
ICD-10
In the proposed rule, CMS indicates that it considered other options before proposing a one-year delay. They included: 1. retaining the October 1, 2013 date; 2. maintaining the date for ICD-10-PCS only, but delaying ICD-10-CM for diagnosis codes only; 3. forgoing ICD-10 altogether and wait for ICD-11; and 4. mandating a uniform delay for ICD-10-CM and ICD-10-PCS.
Department of Housing and Urban Development’s (HUD) proposed increase to its multifamily and health care mortgage insurance premiums (MIP) as announced in the referenced Federal Register notice.
HUD Section 242
Drug Shortage Survey Results
• 820 hospitals responded• 99% reported a shortage• Nearly half reported >21 drugs
in shortage.• 82% of hospitals report that
they have delayed treatment • 7 in 10 hospitals reported
treating patients with less effective drugs
• 77% rarely or never receive advance notification of shortage
Shortage DynamicsCommon Factors Behind Shortages• Product quality/manufacturing problems• Not enough manufacturing capacity• Discontinuation of products• Problems with or shortages of raw materials or
components• Increase in demand due to another shortage• Loss of manufacturing site• Industry consolidation (fewer firms making these
products)• Generally not economically attractive
ECONOMIC ANALYSIS OF THE CAUSES OF DRUG SHORTAGES – HHS, ASPE October 2011 The current class-wide shortages in the industry appears to be a consequence of a substantial expansion in the scope and volume of products produced by the industry that has occurred over a short period of time, without a corresponding expansion in manufacturing capacity.
MedPAC Rural Report
Principles for Rural Access• Fewer physicians, but patient satisfaction
equivalent• Consumption of services is equal – ergo
access is equal• Quality is similar, but mortality and process
measures are worse• Payment is adequate for Home Health, SNF,
Hospice, inpatient rehab, and hospitals
MedPAC Rural Report
Principles for Rural Quality• Quality of care in rural and urban areas
should be equal for non-emergency services rural providers choose to deliver
• Quality of emergency care may differ between rural and urban areas due to limitations of small rural hospitals and the necessity to treat the patient at the rural facility
• All providers should be evaluated on all the services they provide and the data should be publicly reported
MedPAC Rural Report
Principles for Rural Payment Adjustments• Target providers that are the sole source
of care• Payments should be empirically justified• Low-volume adjustments should be tied to
total volume• Don’t duplicate adjustments• Maintain incentives for cost control
Benefits of Participating in MBQIP • Engage in quality improvement initiatives• Improves patient care across a broad
population• Improves hospital services, administration
and operations• Allows for clear benchmarking and the
identification of best practice CAHs• Receive technical assistance regarding
cutting edge quality improvement tools and models
• Prepare CAHs for the future where CAHs will likely have to report measures
• Fulfills the Quality Improvement portion of Flex Grant
MBQIP and Partnership for Patients
Requirements for Tax-Exempt HospitalsThe ACA added section 501(r) that includes additional requirements that a hospital ORGANIZATION must meet to qualify for tax exemption under section 501(c)(3) in tax years beginning after March 23, 2010.
1. Financial Assistance Policy/Emergency Medical Care
2. Billing and Collection3. Limitation on Charges4. Community Health Needs Assessment
ACA Implementation
Community Health Needs Assessment• Definition of a Hospital Organization• Hospital Organizations with Multiple Hospitals• Documentation of a CHNA• How and When a CHNA is Conducted• Community Served by a Hospital• Persons Representing the Broad Interests of the Community• Making a CHNA Widely Available to the Public• CHNA Implementation Strategy• How and When a CHNA Strategy is Adopted• $50K Excise Tax on Failure to Meet Requirements• Reporting Requirements
ACA Implementation
Medicare Shared Savings Program• ACOs will continued to be paid based on FFS• They can receive a “shared savings” payment if:
actual spending is below a benchmark• CMS offers two options:
• Advance Payment Model• Pioneer ACOs
“One-Sided” Model• Years 1 & 2: shared savings only• Year 3: shared savings & losses• Minimum Savings Rate: 2.0%-
3.9%• Shared savings: 50:50 (bonus
cap of 7.5%; loss cap of 5%)• Able to share the first dollar
savings
“Two-Sided” Model• Years 1-3: shared savings or
losses• Minimum Savings Rate: 2.0%• Shared savings: 60:40 (bonus
cap 10%; loss cap of 5% Y1, 7.5% Y2, 10% Y3)
• Able to share first dollar savings
ACA Implementation
2 VBP Demonstrations for Certain Excluded Hospitals
• Critical Access Hospitals • Hospitals with a small number of cases or
quality measures– Test innovative methods of measuring and rewarding
quality and efficient health care– Begin by March 23, 2012; 3-year period– Budget neutral– Number of sites to be selected by the Secretary– No more than 18 months after demo, report to
Congress on recommendations to establish permanent program
ACA Implementation
• Extend Expiring Provisions• R-HoPE• Provider Taxes• Direct Supervision for
Outpatient Services• The 340B Drug Discount
Pricing• Repealing the IPAB• Reauthorizing Conrad-30• Drug Shortages• The Rural Hospital Access
Act
2012 Rural Advocacy Agenda
R-HoPE
• “Sense of the Senate/Congress”• Extend the outpatient hold harmless through 2013• Increase the lo-vol adjustment to 2000 discharges in 2012• Extend cost-based reimbursement for rural outpatient labs• Eliminate isolation test for CAH-based ambulance services• Introduce capital infrastructure revolving loan program• Extend the billing for the technical component of
physician pathology services• Reimburse CAHs for CRNA on-call services
Rural Hospital Protection Act Sam Graves (R-MO) an Ron Kind
(D-WI)
The Rural Hospital Protection Act (H.R. 1398) would ensure that the full cost of certain provider taxes are considered allowable costs for purposes of Medicare reimbursements to critical access hospitals (CAHs).
Provider Taxes
Direct Supervision
Protecting Access to Rural Therapy Services ActSen. Jerry Moran (R-KS)
• adopts a default standard of general supervision for outpatient therapeutic services
• establishes a advisory panel of clinicians to set up an exceptions process for those services that would require higher level of supervision
• establishes a special rule for CAHs based upon Medicare CoPs• revises the definition of “direct supervision” to allow for
telemedicine, telephone or other technology• puts in place a hold harmless from civil or criminal action back
to 2001
The Rural Hospital Access Act
The Rural Hospital Access Act (S.2620) (H.R. 5943)
Sens. Schumer(D-NY) and Grassley(R-IA)
Reps. Reed (R-NY) and Welch (D-VT)
Would extend the MDH program and the low-volume adjustment for one year to September 10, 2013.
943
We Care…We Vote
Objectives• Impact congressional elections• Educate public and candidates on key issues
in preparation for deficit reduction debate– Why are health costs rising?– What are we doing about it?– What more can be done?
• Good citizenship…and highlighting hospitals as voters (big employers)
™
Join Partnership for Action The Partnership for Action brings members of the hospital and health system family together, with their state hospital association and the AHA, to educate elected officials in Congress.
Join us to help make it clear that the decisions legislators make in Washington, DC, have important implications back home.
John SupplittSenior Director
AHA Section for Small or Rural Hospitals
Chicago, IL312-422-3306
jsupplitt@aha.org
Contact Information
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