STAR­ING DOWN MED­I­CAID

Hos­pi­tals, oth­ers with high num­bers of unin­sured say they’ll be at fi­nan­cial risk without ex­tra fund­ing

Modern Healthcare - - FRONT PAGE - Rich Daly

Hos­pi­tals are geared up for a state-by-state bat­tle for the Med­i­caid cov­er­age promised by the health­care re­form law, and to get Congress to com­pen­sate them if the prom­ise is bro­ken. The U.S. Supreme Court’s land­mark de­ci­sion up­hold­ing much of the Pa­tient Pro­tec­tion and Af­ford­able Care Act also struck down the law’s fi­nan­cial penalty for states that do not ex­pand their Med­i­caid pro­gram to all in­di­vid­u­als with in­comes up to 138% of the fed­eral poverty level. That de­ci­sion turned at­ten­tion to the gov­er­nors of the 26 states that sued to over­turn the law and where many provider and pa­tient ad­vo­cates have be­gun as­sem­bling a push for Med­i­caid ex­pan­sion.

Re­pub­li­can of­fi­cials in sev­eral of those states are dig­ging in their heels.

“But even though the fed­eral gov­ern­ment has promised to ini­tially pay 100% of the in­crease in Med­i­caid pay­ments for the first three years of Obama care, the bur­den in­creas­ingly shifts to Florida tax­pay­ers in fu­ture years,” Florida Gov. Rick Scott said in a state­ment. Un­der the law,

“Look, fed­eral dol­lars aren’t free. Those dol­lars are com­ing from us, from our chil­dren, our grand­chil­dren. We’re bor­row­ing money from China to spend on gov­ern­ment pro­grams we can’t af­ford. The best thing we can do is help peo­ple get good pay­ing jobs in­stead of mak­ing them more de­pen­dent on gov­ern­ment pro­grams.”

the fed­eral gov­ern­ment pro­vides 100% fund­ing for the newly el­i­gi­ble Med­i­caid ben­e­fi­cia­ries in 2014 through 2016 and then the fed­eral share ta­pers down to 90% by 2020 and there­after.

Scott was one of 15 Re­pub­li­can gov­er­nors to is­sue a state­ment in the im­me­di­ate af­ter­math of the health­care rul­ing voic­ing con­tin­ued op­po­si­tion to im­ple­ment­ing the law. He was the first of five of the na­tion’s 29 Re­pub­li­can gov­er­nors—in Florida, Louisiana, South Carolina, Iowa and Mis­sis­sippi—who by In­de­pen­dence Day specif­i­cally said they would refuse the Med­i­caid ex­pan­sion.

The tough­en­ing re­sis­tance to a cen­tral pil­lar of the health­care over­haul—the Med­i­caid ex­pan­sion was ex­pected to pro­vide cov­er­age to at least half of the 32 mil­lion peo­ple ex­pected to gain cov­er­age un­der the law—her­alds a gru­el­ing state-by-state fight over ex­pand­ing the pro­gram.

Amid th­ese fis­sures in the near-uni­ver­sal cov­er­age en­vi­sioned un­der the law, some hos­pi­tals are feel­ing jit­ters about the impact of an in­flux of pa­tients newly cov­ered by Med­i­caid and where state and fed­eral of­fi­cials will find the money to pay for it.

Dr. Shel­don Retchin, CEO of Vir­ginia Com­mon­wealth Univer­sity Health Sys­tem, Rich­mond, said that al­though he per­son­ally sup­ports the ex­pan­sion, it could ex­ac­er­bate emer­gency de­part­ment crowd­ing be­cause of the in­abil­ity of of­fice-based physi­cians to treat more Med­i­caid en­rollees.

At Mi­ami’s Jack­son Health Sys­tem, the third-largest safety net hos­pi­tal sys­tem in the na­tion, lead­ers are not sure they want the Med­i­caid ex­pan­sion if it means di­vert­ing cash re­served for in­di­gent care; the state has a $350 mil­lion fund largely de­voted to in­di­gent care that is funded by fed­eral and lo­cal sources. “There’s a lim­ited pool of funds avail­able for Med­i­caid ex­pan­sion; would those funds be redi­rected from Jack­son to fund the Med­i­caid ex­pan­sion pro­gram or not?” said Brian Dean, vice pres­i­dent of fi­nance at Jack­son.

And as ad­vo­cates for providers and the

unin­sured laid plans for state-level po­lit­i­cal cam­paigns, some also saw al­ter­na­tive paths that would cir­cum­vent state pol­i­tics.

For ex­am­ple, some raised the pos­si­bil­ity that HHS could strong-arm states to un­der­take the ex­pan­sion if they have Med­i­caid waivers await­ing ap­proval. The waivers are a top pri­or­ity in sev­eral states seek­ing per­mis­sion to make changes to their pro­grams to control costs.

Bruce Rueben, pres­i­dent of the Florida Hos­pi­tal As­so­ci­a­tion, said that state’s pend­ing ap­pli­ca­tion to move its Med­i­caid pop­u­la­tion into man­aged-care plans could pro­vide the cat­a­lyst to such an ex­pan­sion, al­though the ex­pan­sion of Med­i­caid in the state is far from as­sured. “That process, alone, gives the state and the fed­eral gov­ern­ment rea­son to ne­go­ti­ate and rea­son for back and forth,” Rueben said.

The ar­gu­ments of hos­pi­tals in the state could have a fa­mil­iar ring to the gover­nor, the for­mer CEO of what is now called HCA, a for- profit hos­pi­tal chain with 39 hos­pi­tals in Florida. Scott, how­ever, has re­peat­edly frus­trated Florida hos­pi­tals since tak­ing of­fice in 2011 with bud­gets that cut Med­i­caid pay­ments to providers by about $800 mil­lion and propos­ing much deeper cuts accomplished by chang­ing the way hos­pi­tals are paid.

Sim­i­larly, Wis­con­sin has an out­stand­ing waiver pend­ing at HHS to ap­prove a new Med­i­caid bench­mark plan out­lin­ing en­rollees’ ben­e­fits and cost-shar­ing. Health plan ex­pan­sion ad­vo­cates in that state urged the Obama ad­min­is­tra­tion to trade ap­proval of that ap­pli­ca­tion for a state com­mit­ment to ex­pand en­roll­ment in the Med­i­caid pro­gram, known as Bad­ger care Plus, just as HHS pre­vi­ously de­nied the ef­forts of Re­pub­li­can Gov. Scott Walker to re­strict it.

Mean­while, ad­vo­cates for hos­pi­tals that care for the big­gest num­bers of low in­come pa­tients said they were pre­par­ing to lobby Congress to roll back some of the $18 bil­lion cuts in Med­i­caid dis­pro­por­tion­ate-share pay­ments that were writ­ten into the law with the as­sump­tion that they’d be off­set by a lower bur­den of car­ing for the unin­sured. “We will be talk­ing to folks on Capi­tol Hill about the way that the num­bers baked into the law make the ex­pan­sions un­cer­tain but the cuts cer­tain,” Beth Feld­push, vice pres­i­dent for pol­icy and ad­vo­cacy at the Na­tional As­so­ci­a­tion of Pub­lic Hos­pi­tals and Health Sys­tems.

Some ob­servers ex­pect re­sis­tance among state-level Repub­li­cans to soften af­ter the Novem­ber elec­tions—as­sum­ing Pres­i­dent Barack Obama wins re-elec­tion—but states that wait un­til Novem­ber or early next year to plan for ex­panded Med­i­caid cov­er­age are likely to miss the sched­uled Jan­uary 2014 start date of the Med­i­caid ex­pan­sion. “A state that waits un­til af­ter the elec­tion, in my opinion has virtu-

ally no chance” of start­ing the ex­pan­sion on time, said Paul Hen­coski, na­tional lead part­ner for KPMG’s Health­care Re­form Task Force.

John Hawkins, a lob­by­ist for the Texas Hos­pi­tal As­so­ci­a­tion, said his group’s 500 mem­ber hos­pi­tals and their 300,000 em­ploy­ees will bring “sig­nif­i­cant” po­lit­i­cal pres­sure on state po­lit­i­cal lead­ers to ap­prove the ex­pan­sion. Texas Re­pub­li­can Gov. Rick Perry has shown lit­tle en­thu­si­asm for do­ing so and is­sued a state­ment af­ter the Supreme Court rul­ing urg­ing Congress to re­place the re­form law.

Sim­i­larly, Pete Wertheim, a spokesman for the Ari­zona Hos­pi­tal and Health­care As­so­ci­a­tion, said hos­pi­tals in that state are still try­ing to con­firm the po­si­tion of its po­lit­i­cal lead­ers. “I could even see a sce­nario where states would scale back Med­i­caid, as op­posed to ex­pand­ing it,” Wertheim said.

Cit­ing high costs, Florida Gov. Rick Scott says his state won't be ex­pand­ing Med­i­caid el­i­gi­bil­ity. At least 14 other states could balk at the Med­i­caid ex­pan­sion

en­vi­sioned in the re­form law.

GETTY IM­AGES

Louisiana Gov. Bobby Jin­dal, shown dur­ing an ap­pear­ance on “Meet the Press” af­ter the rul­ing, is among the gov­er­nors who have said they will refuse the Med­i­caid ex­pan­sion.

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