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MACPAC Makes DSH, UPL Recommendations

Changes could come in Medicaid DSH and UPL payments if new MACPAC recommendations are adopted.

Last week the Medicaid and CHIP Payment and Access Commission released its annual report to Congress, with most of the report focusing on its analysis and recommendations for policy updates involving Medicaid disproportionate share hospital payments (Medicaid DSH) and Medicaid upper payment limit payments (UPL payments).

With Affordable Care Act-mandated cuts in Medicaid DSH payments scheduled to start in FY 2020 – this coming October – MACPAC recommended that these cuts be reduced and phased in over a longer period of time “…to give states and hospitals more time to respond to the cuts…”

MACPAC also recommended that Congress and the administration revise the current methodology for distributing Medicaid DSH money to the states to “…provide a stronger link between the distribution of those allotments and measures of hospital uncompensated care…”

The commission also addressed UPL payments, expressing concern about “…the discrepancy between reporting by states to show that they are complying with the UPL and the spending data they report to claim federal matching funds” and recommending “…instituting better data and process controls to ensure that state reporting on compliance with UPL lines up with those amounts they are claiming, and existing limits are enforced.

Medicaid DSH and UPL payments are especially important to SNAP and Pennsylvania safety-net hospitals because of the significant number of low-income, Medicaid-covered, and uninsured patients they serve.

Learn more from MACPAC’s news release summarizing its recommendations and the entire MACPAC annual report.

Filed under: DSH hospitals, Federal Medicaid issues, Medicaid supplemental payments, Pennsylvania safety-net hospitals, Safety-Net Association of Pennsylvania

“Medicaid Shortfall” Definition Changing?

The Medicaid and CHIP Payment and Access Commission last week discussed possible changes in how “Medicaid shortfall” is defined for the purpose of determining how much Medicaid disproportionate share money (Medicaid DSH) safety-net hospitals should receive.

The discussion came in the wake of a court decision last year that ruled that third-party payments toward Medicaid-covered services could not be included in hospitals’ Medicaid shortfall calculations.

MACPAC commissioners discussed several statutory changes that would seek to minimize the impact of the court ruling:

  • Include third-party payments in the definition of Medicaid shortfall.
  • Exclude from the Medicaid DSH definition of Medicaid shortfall all payments and costs for patients who have third-party coverage.
  • Explore new rules that address different types of third-party coverage.

MACPAC is an advisory body whose recommendations to Congress are not binding but its views are respected and often find their way into future public policy.

This subject is important to Pennsylvania safety-net hospitals because all of them receive Medicaid DSH payments.

Learn more about MACPAC’s deliberations on Medicaid shortfalls and Medicaid DSH from the Fierce Healthcare article “MACPAC considers recommending change to definition of ‘Medicaid shortfall’ at safety net hospitals.”

 

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

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met for two days last week in Washington, D.C.

The following is MACPAC’s own summary of the sessions.

MACPAC looked ahead to its June 2019 report to Congress on the initial day of the March 2019 Commission meeting. In the morning, sessions focused on potential recommendations to create a grace period for states to determine coverage policies for outpatient prescription drugs and removing or raising the rebate cap; a uniform definition of therapeutic foster care; and treatment of third-party payment when determining hospitals’ Medicaid shortfall for disproportionate share hospital payments.

In the afternoon, the Commission turned its attention to Puerto Rico’s Medicaid program, with a new analysis on Puerto Rico’s Medicaid enrollment, spending, available financing, and implications for the future. The Commission also considered potential June recommendations focusing on improving performance and return on investment for state program integrity activities.

Several other important topics were also on the March agenda, including a session on Medicaid coverage of recovery support services for beneficiaries with substance use disorders (SUDs) in the afternoon. On the meeting’s second day, the Commission reviewed a draft letter to the Secretary of the U.S. Department of Health and Human Services, laying out the eligibility groups that should be included in the department’s forthcoming data book on Medicaid beneficiaries with SUDs. MACPAC’s input on eligibility groups was required in the SUPPORT for Patients and Communities Act. A review of the proposed rule affecting safe harbors for prescription drug rebates was the topic of the second session, with the final session presenting findings on how various states have approached care coordination in integrated care models.

Supporting the discussion were the following presentations:

  1. Potential Recommendations on Coverage Grace Period and Rebate Cap
  2. Mandated Report: Therapeutic Foster Care
  3. Treatment of Third-Party Payment in the Definition of Medicaid Shortfall: Potential Recommendations
  4. Medicaid in Puerto Rico: Financing and Spending Data Analysis and Projections
  5. Medicaid Program Integrity: Proposed Recommendations
  6. Recovery Support Services for Medicaid Beneficiaries with Substance Use Disorder
  7. Responding to SUPPORT ACT Requirement: Eligibility Groups for HHS Data Book on Medicaid and Substance Use Disorders
  8. Proposed Rule Affecting Safe Harbors for Prescription Drug Rebates
  9. Analysis of Care Coordination Requirements in Integrated Care Models

Because SNAP members and Pennsylvania safety-net hospitals serve so many Medicaid patients, MACPAC’s deliberations are especially relevant to them because its recommendations often find their way into future Medicaid and CHIP policies.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide variety of issues affecting Medicaid and the State Children’s Health Insurance Program.  Find its web site here.

Filed under: Federal Medicaid issues, Safety-Net Association of Pennsylvania

PA to Experiment with Global Budgets for Rural Areas

Pennsylvania plans to launch an experiment in which participating health insurers will fund global budgets to care for residents served by selected rural hospitals.

The program seeks to preserve access to care in rural parts of the state by stabilizing the financial health of struggling rural hospitals.

According to a Pennsylvania Department of Health news release,

The Rural Health Model is an alternative payment model, transitioning hospitals from a fee-for-service model to a global budget payment. Instead of hospitals getting paid when someone visits the hospital, they will receive a predictable amount of money. Payment for the global budget will include multiple-payers, including private and public insurers.

The global budgeting project is a joint venture of the state’s Department of Human Services, Department of Health, Insurance Department, the Pennsylvania Office for Rural Health, the federal Center for Medicare and Medicaid Innovation, and the participating hospitals and health insurers.

The five hospitals that will participate in the model’s launch are Barnes-Kasson County Hospital, Endless Mountain Health Systems, Geisinger Jersey Shore Hospital, UPMC Kane, and Wayne Memorial Hospital.  The five participating insurers are Gateway Health Plan, Geisinger Health Plan, Highmark Blue Cross and Blue Shield, UPMC, and the state’s Medicaid program.  The state hopes to bring additional hospitals and additional insurers into the program in the future.

The federal government’s Center for Medicare and Medicaid Innovation is investing $25 million over five years to fund a rural health redesign center to support the project’s launch.

The project is needed, according to the state, because “Nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at-risk of closure.”

Learn more about this initiative from this Pennsylvania Department of Health news release.

 

Filed under: Uncategorized

Pennsylvania Health Law Project Newsletter

The Pennsylvania Health Law Project has published the February 2019 edition of its newsletter.

Included in this edition are articles about:

  • Governor Wolf’s proposed FY 2020 Medicaid budget
  • Medicare Part D co-pay problems for some dual-eligibles
  • new Medicare Part D monitoring for prescription drug abuse
  • Community HealthChoices

Find these stories and others in the latest edition of the Pennsylvania Health Law Project’s Health Law PA News.

Filed under: Pennsylvania Medicaid, Pennsylvania proposed FY 2020 budget, Pennsylvania state budget issues

Safety-Net Hospitals Struggle in Medicare Joint Replacement Model

Non-safety-net hospitals are outperforming safety-net hospitals in the Medicare’s Comprehensive Care for Joint Replacement model, which was introduced in 2016.

According to a new study published in Health Affairs,

…in comparison to non-safety-net hospitals, 42 percent fewer safety-net hospitals qualified for rewards based on their quality and spending performance (33 percent of safety-net hospitals qualified, compared to 57 percent of non-safety-net hospitals), and safety-net hospitals’ rewards per episode were 39 percent smaller ($456 compared to $743). Continuation of this performance trend could place safety-net hospitals at increased risk of penalties in future years.

What might be done to address this disparity?  The study suggests that

Medicare and hospital strategies such as those that reward high-quality care for vulnerable patients could enable safety-net hospitals to compete effectively in CJR.

Learn more in the Health Affairs article Performance of Safety-Net Hospitals in Year 1 of the Comprehensive Care for Joint Replacement Model.

 

Filed under: Medicare

DHS Highlights Proposed FY 2020 Initiatives

Governor Wolf’s proposed FY 2020 budget for the Department of Human Services includes a number of initiatives designed to improve existing programs, enhance health status, and improve access to health services.  As highlighted in a recent release from DHS, those initiatives include:

  • increasing Pennsylvania’s minimum wage
  • helping parents find lasting careers
  • evidence-based home visiting
  • high-quality child care
  • expanding access to affordable child care
  • personal care homes/day treatment programs
  • disability advocacy program
  • helping people access services

All of these proposals are subject to review and consideration by the state legislature as part of the process of developing and adopting a state spending plan for the 2020 fiscal year.  Learn more from the DHS release “DHS 2019-20 Budget Initiatives.”

Filed under: Pennsylvania proposed FY 2020 budget

States Taking Different Paths to Pay for Medicaid Expansion

With the federal share of Medicaid expansion falling to 90 percent next year, states that expanded their Medicaid programs under the Affordable Care Act are now exploring new ways to raise the money to pay for the 10 percent for which they will soon by responsible.

Some are implementing hospital or insurer taxes while others are increasing existing taxes on hospitals and health insurers.  New Hampshire is directing part of the proceeds from a liquor tax for this purpose and other states have introduced cigarette taxes.  Some are charging premiums to Medicaid beneficiaries and introducing work requirements for their Medicaid population so they can reduce overall enrollment.  Many are using money from their general revenues.

This all comes at a time when many states are finding that their budget situations have improved and are better than they have been in years.

Learn more about how states are dealing with this challenge, and whether they are finding that it is worth it, in the Washington Post article “States scramble to head off future Medicaid shortfalls.”

Filed under: Affordable Care Act, Federal Medicaid issues

Health Care Lobbying Rose in 2018

Hospitals and health systems spent $99.7 million lobbying in Washington, D.C. last year, just barely more than in 2017 but much less than in 2009, when the focus of health care lobbying was the Affordable Care Act, then just a proposal and not a law.

The issues on which they spent the most money lobbying were the 340B program, site-neutral Medicare payments for outpatient services, safety-net hospitals, Medicare-for-all proposals, and Medicaid funding.

Learn more about what hospitals spent their lobbying money on, who were the biggest lobbying spenders, and where industry groups figure in the overall spending in the Healthcare Dive article “Hospital lobbying in 2018 — by the numbers.”

Filed under: Uncategorized

New Report Looks at Medicaid and Social Determinants of Health

A new report outlines how state Medicaid programs can improve the health of Medicaid beneficiaries through a more concerted approach to addressing social determinants of health.

The report, from the Institute for Medicaid Innovation, focuses on how state Medicaid programs, through alternative payment models and especially through managed care organizations, have implemented new programs designed to address social determinants of health such as inadequate social supports and housing, food insecurity, lack of transportation, and others.  It also highlights federal regulations that facilitate the implementation of new ways to address social determinants of health and presents brief case studies in which states, state Medicaid programs, and Medicaid managed care organizations tackle social determinants of health.

Such approaches are especially relevant to Pennsylvania safety-net hospitals because they care for so many more Medicaid patients than the typical community hospital.

Learn more from the Institute for Medicaid Innovation report “Innovation and Opportunities to Address Social Determinants of Health in Medicaid Managed Care.”

Filed under: social determinants of health

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2012 Safety-Net Association of Pennsylvania