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The 340B Issue Explained

The section 340B prescription drug discount program has grown increasingly controversial in recent years.

The program, established in the 1990s to help hospitals with the cost of the prescription drugs they provide to low-income patients on an outpatient basis, has grown considerably since its inception.  Pharmaceutical companies argue that it is too large, that it contributes to the growing cost of prescription drugs, and that hospitals are not using the savings they reap from the program to serve more low-income patients, as was envisioned when Congress created the program.

Eligible providers, on the other hand, note that much of the program’s growth was mandated by Congress and that 340B continues to serve its original purpose of helping hospitals serve low-income outpatients while using the savings the program generates to provide even further assistance to low-income patients.

Recent federal efforts to address some of these issues have satisfied neither side.

All Pennsylvania safety-net hospitals participate in the 340B program and consider it to be a vital tool in helping them serve their communities.

The Vox news web site has published an article that describes the program and outlines both sides of the argument.  Find it here.

Filed under: Medicare

PA Streamlines Medicaid Application Process for Individuals Released From Prison

The Pennsylvania Department of Corrections and the state’s Department of Human Services have developed a new process to simplify the Medicaid application process for individuals newly released from state prisons.

Under the new process, Medicaid application will be automated for those leaving prison who consent to participate in the application process.  This process will ensure Medicaid eligibility immediately upon release from prison for about 2000 individuals a year.

Learn more about this process from this joint news release from the two departments.

Filed under: Pennsylvania Medicaid

Helping Safety-Net Hospitals Help Their Patients

A new report published on the Health Affairs Blog describes the continuing challenges safety-net hospitals face and offers suggestions for helping them meet those challenges.

The challenges, according to the report, are the virtual elimination of the Affordable Care Act’s individual health insurance mandate; the continued decline in the amount of Medicare disproportionate share hospital money (Medicare DSH) provided to safety-net hospitals; and hospital closures that shift more of the burden for caring for uninsured patients onto a smaller pool of safety-net hospitals.  The result is under-served patients and new financial risks for the hospitals that remain after some safety-net hospitals close because of the large amounts of uncompensated care those hospitals continue to provide.

To address these challenges, the report offers three potential solutions:

  • Congress should revisit the Medicare DSH cuts.
  • States should target their DSH money to the hospitals providing the most uncompensated care.
  • Non-profit non-safety-net hospitals that stabilize uninsured emergency patients and then direct them to safety-net hospitals should be required to play a longer-term role in the care of such patients as part of their required community benefit or risk losing their tax-exempt status.

Learn more about the challenges safety-net hospitals continue to face and some of the possible solutions to those problems by going here, to the Health Affairs Blog, to see the report “Safety-Net Health Systems at Risk:  Who Bears The Burden Of Uncompensated Care?”

Filed under: Affordable Care Act, Medicare

CMS Rejects Bid to Impose Lifetime Limit on Medicaid Services

The Centers for Medicare & Medicaid Services has denied a request from the state of Kansas to impose a lifetime limit on the Medicaid benefits individuals may receive.

In a move that the agency appeared to signal last week and that appears to have national implications, CMS administrator Seema Verma explained that

 We have determined that we will not approve Kansas’ recent request to place a lifetime limit on Medicaid benefits for some beneficiaries…We seek to create a pathway out of poverty, but we also understand that people’s circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them.

Medicaid advocates feared that benefit limits would follow in the footsteps of the recent efforts of some states to impose work requirements on many Medicaid participants – efforts that, in some cases, have proven successful.

Such a decision, if it becomes policy, would be beneficial for Pennsylvania safety-net hospitals.  These hospitals serve more Medicaid patients than the typical hospital and would therefore be more likely to encounter patients whose eligibility would be jeopardized by a limit on lifetime Medicaid benefits.

Learn more about Medicaid lifetime benefit limits and the CMS decision in this article in the online publication The Hill.

Filed under: Federal Medicaid issues, Pennsylvania safety-net hospitals

Hospital Financial Health Generally Stable, PHC4 Reports

General acute-care hospitals experienced up and downs in their financial performance in 2017, the Pennsylvania Health Care Cost Containment Council has reported.

In 2017,

  • net patient revenue rose 3.9 percent
  • operating margins fell from 6.02 percent to 5.15 percent but total margins rose from 5.96 percent to 6.62 percent
  • uncompensated care declined from $844 million to $761 million – the fourth consecutive year of decline

For more on these and other measures of hospital financial performance, including data on individual hospitals, go here to see the new PHC4 report Financial Analysis 2017:  General Acute Care Hospitals.

Filed under: Uncategorized

A Look at Medicaid Managed Care

With 74 million people enrolled in Medicaid managed care plans – roughly 71 percent of the U.S. Medicaid population – the Health Affairs Blog has taken a broad look at Medicaid managed care, addressing the question of how it works, whether it’s working, and what its future may be.

The two-part report notes that some Medicaid managed care companies are highly profitable and that this profitability has increased in recent years.  It also notes that the manner in which these companies serve their members varies greatly, that their medical loss ratios vary considerably from state to state, and that the reserves managed care companies hold vary greatly as well.

In addition, the two-part report seeks answers to a number of questions, including:

  • whether state Medicaid administrative costs are reduced by contracting with managed care organizations;
  • how much risk is actually assumed by the managed care organizations;
  • whether Medicaid managed care actually saves money; and
  • how significant cuts in state Medicaid budget might affect the willingness of managed care companies to continue contracting with state agencies.

The Health Affairs Blog report is called “Medicaid Managed Care:  Lots of Unanswered Questions.”  Find part 1 of the report here and part 2 here.

Filed under: Federal Medicaid issues, Pennsylvania Medicaid policy

PA Health Law Project Newsletter

The Pennsylvania Health Law Project has published its April 2016 newsletter.

Included in this edition are stories about:

  • the continued introduction in southwestern Pennsylvania of the Community HealthChoices program of managed long-term services and support for seniors and the planned implementation of the program in southeastern Pennsylvania;
  • a court ruling invalidating the state’s selection of managed care plans to serve Medicaid recipients who participate in the HealthChoices physical health program; and
  • legislative efforts to establish a work requirement for some Medicaid participants.

Go here for the latest edition of PA Health Law News.

 

Filed under: HealthChoices, Pennsylvania Medicaid

New 340B Bill Proposed

A new bill introduced in the House seeks to bring greater transparency to the controversial 340B prescription drug discount program.

Under H.R.5598, proposed by Rep. Earl “Buddy” Carter (R-GA), hospitals would be required to report the outpatient care they provide to low-income patients in both their main hospital and at pediatric care sites.  Hospitals already separately report the inpatient care they provide to such patients.

According to Representative Carter,

I introduced this legislation today because I believe the 340B program is very important, but it needs to be improved.  340B is an outpatient program and currently hospitals do not have to report low-income utilization in outpatient settings. This legislation adds an additional layer of transparency to allow us to better understand the patient makeup of DSH hospitals to improve the program and ensure it is truly being used in the most effective way for our nation’s most vulnerable patients.

The 340B program provides discounts to qualified hospitals when they dispense drugs on an outpatient basis to low-income patients.  All Medicare disproportionate share (Medicare DSH) hospitals, along with other providers that meet formal criteria, qualify to participate in the program.  All Pennsylvania safety-net hospitals participate in the 340B program.

Learn more about the bill from this news release from Representative Carter or see the bill itself.

 

Filed under: Medicare

Short-Term Plans May Short-Change Purchasers

The short-term health insurance plans that the administration proposes making more available to consumers as an alternative to comprehensive health insurance that meets Affordable Care Act coverage requirements may leave consumers with greater out-of-pocket costs and less coverage for some critical services.

According to a Kaiser Family Foundation review of available short-term, limited duration plans in 10 markets across the country, those plans:

  • often do not cover mental health and substance abuse services and outpatient prescription drugs
  • may turn down individuals or charge them higher premiums based on age, gender, or health status, including pre-existing conditions
  • require greater cost-sharing by their purchasers
  • do not cover maternity services at all

Such plans are not required to comply with the Affordable Care Act’s essential health benefits requirement.

Such plans may pose a particular risk to Pennsylvania safety-net hospitals because residents of the low-income communities they serve may be especially inclined to purchase such less-expensive health insurance.  When that insurance fails to cover some of the cost of caring for such patients, urban safety-net hospitals may be left with unreimbursed expenses for costs those patients are unable or unwilling to pay.

For a closer look at short-term health insurance plans, how they operate, and what they do and do not cover, see the report “Understanding Short-Term Limited Duration Health Insurance, which can be found here, on the web site of the Kaiser Family Foundation.

Filed under: Uncategorized

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission, a non-partisan legislative branch agency that advises Congress, the administration, and the states on Medicaid and CHIP issues, met publicly in Washington, D.C. last week.

The following is MACPAC’s own summary of its two days of meetings.

The April 2018 meeting began with session on social determinants of health. Panelists Jocelyn Guyer of Manatt Health Solutions, Arlene Ash of the University of Massachusetts Medical School, and Kevin Moore of UnitedHealthcare Community & State discussed state approaches to financing social interventions through Medicaid. In its second morning session, the Commission reviewed a draft chapter of the June 2018 Report to Congress on Medicaid and CHIP on the adequacy of the care delivery system for substance use disorders (SUDs) with a special focus on opioid use disorders.

In the afternoon, the Commission discussed the Centers for Medicare & Medicaid Services (CMS) March 2018 proposed rule changing the process by which states verify that Medicaid fee-for-service provider payment is sufficient to ensure access to care and agreed to submit comments to the agency. The first day of the meeting concluded with a review of the draft June chapter describing the status of managed long-term services and supports programs across the country. June chapters on Medicaid drug rebate policy and federal regulations governing confidentiality of SUD patient records were approved at the previous Commission meeting in March.

On Friday, the Commission heard from panelists Susan Barnidge, of the U.S. Government Accountability Office (GAO), and Judith Cash of CMS’s Center for Medicaid and CHIP Services, who discussed GAO’s report on Section 1115 demonstration evaluations and CMS’s efforts to improve the evaluation process. In the final session of the day, the Commission examined issues related to upper payment limit (UPL) hospital payments, which included findings from MACPAC’s recent review of state UPL demonstrations.

MACPAC members addressed a number of policy issues during the sessions using the following presentations to guide their discussion:

  1. State Approaches to Financing Social Interventions through Medicaid
  2. Draft Chapter: Access to Substance Use Disorder Treatment in Medicaid
  3. Proposed Rule on Exemptions to Monitoring Access in Fee for Service
  4. Draft Chapter: Managed Long-Term Services and Supports Programs
  5. Panel Discussion on Section 1115 Waiver Evaluations
  6. Uses and Oversight of Upper Payment Limit Supplemental Payments to Hospitals

MACPAC’s deliberations are especially important to Pennsylvania safety-net hospitals because they care for so many Medicaid and CHIP patients.

Filed under: Federal Medicaid issues, Medicaid supplemental payments

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2012 Safety-Net Association of Pennsylvania