States may tap hos­pi­tals to help pay for Med­i­caid ex­pan­sion in 2017

Modern Healthcare - - NEWS - By Vir­gil Dick­son

Pol­i­cy­mak­ers in Med­i­caid ex­pan­sion states likely will try to wring some cash from hos­pi­tals start­ing in 2017 when the fed­eral gov­ern­ment no longer pays the full tab for the cov­er­age ex­pan­sion, ex­perts say.

Higher-than-ex­pected en­roll­ment means ex­pan­sion states will be on the hook for hun­dreds of mil­lions more than they an­tic­i­pated when they took ad­van­tage of the Af­ford­able Care Act’s Med­i­caid ex­pan­sion to adults earn­ing up to 138% of the fed­eral poverty level. For in­stance, in Ore­gon, 386,000 peo­ple en­rolled in Med­i­caid in 2014, up from a pre-ex­pan­sion es­ti­mate of 222,700.

Un­der the ACA, the fed­eral gov­ern­ment picks up the full cost for newly el­i­gi­ble adults through 2016. Af­ter that, the match grad­u­ally drops to 90% by 2020. In 2013, Ore­gon es­ti­mated its tab for Med­i­caid ex­pan­sion would be $262 mil­lion be­tween 2017 and 2019. It now ex­pects the cost will be $369 mil­lion dur­ing that pe­riod, said Stephanie Tripp, a spokes­woman for the Ore­gon Health Au­thor­ity, the state’s Med­i­caid agency.

Ear­lier this month, the CMS is­sued a re­port not­ing that the ACA’s Med­i­caid ex­pan­sion pushed en­roll­ment higher than an­tic­i­pated and that the pro­jected costs for that cov­er­age had gone up as well. But ex­perts have noted that Med­i­caid ex­pan­sion re­duces state costs in other ways, and also boosts jobs and states’ economies.

“What you’re see­ing now is that state bud­get peo­ple are say­ing, ‘We’re end­ing up with more peo­ple in the sys­tem than we ini­tially thought, and we have to think about how we’re go­ing to fi­nance this,’ ” said Joy Wil­son, health pol­icy di­rec­tor for the Na­tional Con­fer­ence of State Leg­is­la­tures.

Any ar­range­ment to have a state’s hos­pi­tals pay assess­ments to help fund the Med­i­caid ex­pan­sion would have to be ap­proved by each state’s leg­is­la­ture. One op­tion is to have hos­pi­tals con­trib­ute through a sys­tem of as­sess­ment fees al­ready col­lected by many states. Since the 1980s, provider assess­ments have gen­er­ated bil­lions of dol­lars to help states boost the match­ing funds they re­ceive from the fed­eral gov­ern­ment. In 2015, 38 states had such levies in place, ac­cord­ing to the Kaiser Fam­ily Foun­da­tion.

With the clock tick­ing down on the 100% fed­eral match for the Med­i­caid ex­pan­sion pop­u­la­tion, Ari­zona, Colorado, In­di­ana and Ohio have es­tab­lished poli­cies to im­pose assess­ments on their hos­pi­tals to cover the state share of the ex­pan­sion costs.

Hos­pi­tals in non-ex­pan­sion states such as Louisiana, Ten­nessee and Utah have said they would be will­ing to con­trib­ute if their states ac­cepted Med­i­caid ex­pan­sion. The Utah Hos­pi­tal As­so­ci­a­tion said, how­ever, that it would only agree if all provider groups are as­sessed.

It’s not clear if pol­i­cy­mak­ers in all of the 29 states that have ex­panded Med­i­caid will ask hos­pi­tals to con­trib­ute to­ward the ex­pan­sion.

But in Cal­i­for­nia, where the state Medi-Cal pro­gram pays some of the low­est rates in the coun­try, the Cal­i­for­nia Hos­pi­tal As­so­ci­a­tion said its mem­bers are not in­ter­ested in pay­ing an ad­di­tional as­sess­ment.

“We have no plans to of­fer to pick up the ex­pan­sion costs of the Medi-Cal pro­gram once the 100% fed­eral match for the newly el­i­gi­ble be­gins to drop,” said Jan Emer­son-Shea, spokes­woman for the Cal­i­for­nia Hos­pi­tal As­so­ci­a­tion.

“Cal­i­for­nia al­ready has one of the low­est Med­i­caid re­im­burse­ment rates in the na­tion. We are ad­vo­cat­ing for the state to in­crease its re­im­burse­ment rates to hos­pi­tals, doc­tors and other providers,” she said.

Cal­i­for­nia has en­rolled nearly 2.3 mil­lion peo­ple so far, nearly three times more than the 800,000 the state had an­tic­i­pated, said H.D. Palmer, spokesman for the state’s Depart­ment of Fi­nance.

Hos­pi­tal as­so­ci­a­tions in Illi­nois, Mary­land, Ne­vada, New Mexico and North Dakota say the as­sess­ment is­sue hasn’t yet been broached by state of­fi­cials or their mem­bers.

Kath­leen Shure, se­nior vice pres­i­dent at the Greater New York Hos­pi­tal As­so­ci­a­tion, said it shouldn’t be nec­es­sary for the state Med­i­caid pro­gram to as­sess hos­pi­tals, be­cause New York re­ceives an en­hanced match from the CMS for child­less adults with in­comes un­der 100% of the poverty level.

States wouldn’t need hos­pi­tal in­dus­try con­sent to in­tro­duce or in­crease assess­ments as long as it was done in com­pli­ance with fed­eral law, said Michael Miller, pol­icy di­rec­tor for Com­mu­nity Cat­a­lyst, a not-for­profit that works to ex­pand health cov­er­age un­der the ACA.

Fed­eral rules al­low states to im­pose assess­ments on hos­pi­tals up to 6% of pa­tient rev­enue.

This fed­eral cap means that not all states will be able to as­sess hos­pi­tals to cover Med­i­caid ex­pan­sion costs be­cause some may al­ready be as­sess­ing hos­pi­tals at the max­i­mum level, Wil­son said.

“What you’re see­ing now is that state bud­get peo­ple are say­ing, ‘We’re end­ing up with more peo­ple in the sys­tem than we ini­tially thought, and we have to think about how we’re go­ing to fi­nance this.’ ”

Joy Wil­son Health pol­icy di­rec­tor Na­tional Con­fer­ence of State Leg­is­la­tures

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