BCRA spells trou­ble for providers as they weigh bill’s Med­i­caid roll­backs

Modern Healthcare - - NEWS - By Alex Kacik

Law­mak­ers re­turn to Wash­ing­ton, D.C., this week fol­low­ing their July 4 hol­i­day break. At the top of the agenda for Se­nate Ma­jor­ity Leader Mitch McConnell is tweak­ing the Bet­ter Care Rec­on­cil­i­a­tion Act in hopes of shoring up “yes” votes from a hand­ful of hold­out Repub­li­cans.

Sev­eral sen­a­tors balked at mov­ing for­ward with a vote in late June, ar­gu­ing that they hadn’t been given enough time to study what was in the bill and how re­peal­ing parts of the Af­ford­able Care Act would im­pact their states. As ne­go­ti­a­tions ramp up this week, providers re­main con­cerned that, as orig­i­nally crafted, the leg­is­la­tion would be bad not just for pa­tients but for busi­ness, es­pe­cially if pro­jec­tions that tens of mil­lions of peo­ple would lose health cov­er­age come to fruition.

“If Med­i­caid gets rolled back, there is no ques­tion there is go­ing to be more un­com­pen­sated care,” Cleve­land Clinic out­go­ing CEO Dr. Toby Cos­grove said. “When up to 22 mil­lion peo­ple lose cov­er­age, that be­comes a sub­stan­tial risk, par­tic­u­larly for safety-net and ru­ral hos­pi­tals that are al­ready los­ing money on pa­tient care. But the im­pli­ca­tions go be­yond pa­tients and hos­pi­tals, they go to the com­mu­ni­ties, es­pe­cially when their big­gest em­ploy­ers are hos­pi­tals.”

The bill would slash the ACA’s fi­nan­cial as­sis­tance to fam­i­lies and in­di­vid­u­als who couldn’t oth­er­wise af­ford health­care, cap Med­i­caid spend­ing and roll back the Med­i­caid ex­pan­sion af­forded to states’ most vul­ner­a­ble pop­u­la­tions. The Con­gres­sional Bud­get Of­fice pro­jected that the Med­i­caid pro­vi­sions would cause 22 mil­lion Amer­i­cans to lose cov­er­age, while a sep­a­rate anal­y­sis sug­gested the bill would send in­sur­ance pre­mi­ums surg­ing.

States such as Cal­i­for­nia could be hit par­tic­u­larly hard. Cal­i­for­nia has been ap­proach­ing uni­ver­sal health­care cov­er­age largely thanks to the Med­i­caid ex­pan­sion un­der the Af­ford­able Care Act. Only 3.5% of Cal­i­for­nia’s pop­u­la­tion is unin­sured and 1 out of ev­ery 2 chil­dren are cov­ered by Medi-Cal, ac­cord­ing to Marin Gen­eral Hos­pi­tal CEO Lee Do­man­ico.

“If that were to re­verse it­self, it would re­ally be dev­as­tat­ing for those peo­ple and tough for us be­cause that re­im­burse­ment could go to zero,” he said. “Bad debt would go up, which had gone down through the Oba­macare plan with more peo­ple in­sured through the ex­changes and ex­pan­sion of the Medi-Cal pro­gram.”

The Se­nate bill would leave states to fill the Med­i­caid fund­ing gap or end cov­er­age as the en­hanced fed­eral pay­ments for ex­pan­sion would be phased out over three years, start­ing in 2021. It would also cap the growth of fed­eral Med­i­caid pay­ments at the med­i­cal in­fla­tion rate, which is es­ti­mated to be 5.6% an­nu­ally, be­gin­ning in 2020. Come 2025, the growth of those pay­ments would be lim­ited to the Con­sumer Price In­dex rate, which has

Only 3.5% of Cal­i­for­nia’s pop­u­la­tion is unin­sured and 1 out of ev­ery 2 chil­dren are cov­ered by Medi-Cal, ac­cord­ing to Marin Gen­eral Hos­pi­tal CEO Lee Do­man­ico.

“We will go back to the days where the unin­sured showed up in the ER. Catholic hos­pi­tals would be in a tough po­si­tion be­cause of our com­mit­ment to the poor and vul­ner­a­ble.” Michael Rodgers Se­nior vice pres­i­dent of ad­vo­cacy and public pol­icy Catholic Health As­so­ci­a­tion

av­er­aged around 1.4% since the Great Re­ces­sion.

The CBO found that Med­i­caid spend­ing would be 26% lower in 2026 than it would be com­pared to cur­rent spend­ing trends, and the gap would widen to about 35% in 2036.

The bill per­mits states to opt out of the ACA’s man­dated es­sen­tial ben­e­fits, which would al­low in­sur­ers to turn away pa­tients who need ma­ter­nity care, men­tal health treat­ment, chemo­ther­apy and emer­gency care, among oth­ers.

“We will go back to the days where the unin­sured showed up in the ER,” said Michael Rodgers, se­nior vice pres­i­dent of ad­vo­cacy and public pol­icy at the Catholic Health As­so­ci­a­tion. “Catholic hos­pi­tals would be in a tough po­si­tion be­cause of our com­mit­ment to the poor and vul­ner­a­ble.”

As un­com­pen­sated care rises, op­er­at­ing mar­gins would shrink, es­pe­cially among hos­pi­tals in ex­pan­sion states. Hos­pi­tals in D.C. and the 31 states that ex­panded Med­i­caid are pro­jected to see a 78% in­crease in un­com­pen­sated care from 2017 to 2026, an anal­y­sis from the Com­mon­wealth Fund found. Eleven of those states would see costs at least dou­ble, in­clud­ing Ken­tucky and West Vir­ginia, which would have 165% and 122% in­creases, re­spec­tively. Providers would also face credit down­grades if the bill be­comes law, Moody’s In­vestors Ser­vice and Fitch Rat­ings said.

Even though the pro­posed bill would bol­ster Med­i­caid dis­pro­por­tion­ate-share hos­pi­tal pay­ments, that will not off­set the Med­i­caid cuts, re­searchers said. Hos­pi­tals in Med­i­caid ex­pan­sion states could ex­pe­ri­ence an av­er­age 14% de­cline in Med­i­caid rev­enue from 2017 to 2026, the Com­mon­wealth Fund es­ti­mated.

The bill could also bring some un­in­tended con­se­quences as providers and physi­cians adapt and in­vest in in­fra­struc­ture that sup­ports new pay­ment mod­els. The ma­jor­ity of med­i­cal prac­tice lead­ers are still not ready to com­ply with the Medi­care Ac­cess and CHIP Reau­tho­riza­tion Act, and sweep­ing changes in health­care pol­icy may fur­ther slow that process, said Re­becca Alt­man of the Berke­ley Re­search Group.

“I won­der if there isn’t a ter­tiary ef­fect on MACRA adop­tion when all of a sudden the vol­ume of pa­tients isn’t there to make the re­turn on man­aged-care teams ef­fi­cient,” she said. For now, providers will have to wait. “I haven’t talked to any provider that sup­ports the Se­nate bill,” Cos­grove said. “The ACA has never been more pop­u­lar.”

AP PHOTO

Dr. Leonid Baso­vich ex­am­ines Medi-Cal pa­tient Michael Epps at the Wel­lS­pace Clinic in Sacramento, Calif.

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