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Federal Legislative Update Maggie Elehwany NRHA Vice President of Government Affairs


Title: Jigsaw Puzzle of Health Reform Author: Tim Fry Last modified by: Jean Engler Created Date: 4/24/2008 12:37:16 PM Document presentation format – PowerPoint PPT presentation

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Title: Federal Legislative Update Maggie Elehwany NRHA Vice President of Government Affairs

Federal Legislative UpdateMaggie
ElehwanyNRHA Vice President of Government

  • Today Unprecedented political challenges
    continue for Critical Access Hospitals
  • Administration
  • Presidents Budget
  • HHS Inspector General Report
  • Affordable Care Act
  • America Recovery and Reinvestment Act
  • Sequestration
  • Capitol Hill
  • MedPAC
  • CBO

  • 2014 is an election year shaped by the recent

Toxic climate in Washington continues
  • 2014 is another partisan year.
  • How does that impact rural patients and Critical
    Access Ho?

(No Transcript)
The challenges of the 113th Congress
  • Partisan politics have impacted rural programs
  • were once supported by strong bipartisan
  • National fiscal crisis.
  • Complexities of rural health funding and lack of
    institutional memory means education on Capitol
    Hill is critical.
  • Must overcome Hill attitude that rural providers
  • get bonuses simply because they practice in
    rural areas and
  • Rural providers double dip and abuse system.

  • Rural champions exit Congress
  • Many other rural champions are also leaving or
    have left Sen. Harkin (D-IA), Sen. Rockefeller
    (D-WV), Sen. Inouye (D-HI), Sen. Conrad (D-ND),
    Sen. Bingaman (D-NM), Sen. Lugar (R-IN), Sen.
    Snowe (R-ME).
  • Senator Max Baucus (D-MT) leaves Chairmanship.
  • Sen. Ron Wyden (D-OR) becomes new Senate Finance

  • Despite climate, rural victories were achieved
  • Rural providers were to lose hundreds of millions
    in Medicare payments if Congress did not act by
    March 31.
  • What was at stake?
  • For Rural Doctors 27-32 cut in Medicare
    reimbursement rates
  • SGR expiration
  • GPCI expiration
  • For Rural Hospitals
  • Medicare Dependent Hospital 12 loss of
    Medicare revenue need to make up 18 from
    private insurer.
  • Low Volume Hospital -- approx. 500,000 per
    hospital and can mean well-over 1 million.
  • For Rural Ambulance Providers 22.6 reductions

  • Victory Specifics
  • Extended vital rural Medicare payments until
    March 31, 2015
  • LVH
  • MDH
  • Rural and Super-rural ambulance payments
  • Therapy Caps
  • GPCI
  • Importance Rural hospitals in Kentucky will
  • Elizabeth Cobb , VP Kentucky Hospital Association
  • 12-month delay of SGR cuts
  • PLUS
  • ICD10 one year delay of transition
  • Two Midnight Rule - Delays enforcement of the CMS
    two-midnight policy for an additional 6 months
    (through Sept. 31, 2015) and prohibits recovery
    audit contractors from auditing inpatient claims
    spanning less than two midnights for the 6-month

  • What wasnt in there?
  • 96-Hr Rule, Physician Supervision
  • NRHA Concerns over 96-hour rule
  • Implementation of rule
  • strangles CAHs
  • impedes patient care
  • exacerbates workforce shortages
  • Capitol Hill strategy
  • Administrative strategy
  • Key Legislation
  • Critical Access Hospital Relief Act

  • Why didnt a permanent fix happen?
  • Werent the stars aligned?
  • CBO Score
  • Physician Groups full court press
  • Actual bipartisan and bicameral agreement
  • on SGR replacement.
  • Not quite
  • Election year - - pay- fors became a partisan
  • Reid has concern over making vulnerable Ds take a
    tough vote Landrieu, Hagan , Begich and Pryor.
  • Wyden is still trying to get a handful of
    Republican Senators to support his bill. However,
    CBO just re-scored the bill - - it now has a much
    higher price tag!

  • Lets Focus on Challenges to Critical Access
  • 39 CAHs in Washington State
  • Health Care Reform 225 billion in cuts to
    hospitals/Exchanges/Medicaid expansion
  • Sequestration
  • Threats to cut more rural Medicare payments

  • Health Reform
  • Goal insure 36 million uninsured.
  • Extreme registration problems.
  • Enrollment numbers exceed expectations 8
    million 35 18-30 year olds.
  • Big PR push by White House. Millions invested.
  • Some private insurers rate hikes
  • DSH and uncompensated care cuts
  • Is it right from rural?

  • State Exchange Problems
  • Oregon is the first state to abandon its attempts
    to run its own exchange.
  • Now will join 34 other states in Federal
  • A confluence of technical, system, organizational
    and management problems blocked Cover Oregon from
    functioning normally since its scheduled launch
    in October 2013.

  • Are the Health Exchanges working in rural?
  • National Rural Health Task Force Data
  • 34 Federal Health Exchanges examined for
  • 1) Availability
  • 2) Competitiveness and
  • 3) Affordability

  • Competitiveness
  • 58.3 of rural counties only had 1 or 2 plan
  • 23.7 of rural counties vs. 5.5 of urban
    counties had only 1 plan option
  • Over ¾ of urban plans had three or more choices
    of coverage

Affordability Residents of rural counties face
slightly lower median premium costs for all
levels of coverage than do residents of urban
counties. This multi-state conclusion may not
apply in any single state.
  • ACA Exchanges - - Concerns for CAHs
  • High deductibles result in high compensated care.
  • Are rural providers being left behind?
  • CAHs are deemed essential community
    providers but there has been difficulty/confusion
  • States choosing to not expand Medicaid creates
    new donut hole.

  • Disproportionately important to rural America
    (rural patients and rural economies).
  • One-half of all newly insured under ACA will be
    covered by expanded Medicaid. (Estimates are 5
    million in rural will be covered.)
  • Supreme Court decision Allowed states to
    opt-out or seeking waivers
  • 20 states are opting out - - creating a new gap
    in coverage.

(No Transcript)
  • Uncompensated Care Cuts
  • Health cares 85 billion challenge
    uncompensated care in the Obamacare age
  • An Estimated 84.9 Billion In Uncompensated
    Care Was Provided In 2013 ACA Payment Cuts Could
    Challenge Providers Health Affairs

Sequestration mandated 2 cuts to Medicare
providers extended AGAIN.
  • Loss of over 1billion in CAH revenue.
  • Tens of millions of dollars lost for rural PPS
  • 41 of rural hospitals operate at a financial
    loss sequestration will force many more into the
  • SGR Patch pay-for extends non-discretionary
    sequestration years.
  • Result
  • Rural Job losses
  • Rural revenue lost
  • Rural patient services cut
  • Possible rural hospital

Rural and Urban Comparison of Operating Margin
Profitable Switch Unprofitable Grand Total
All Rural 739 44 1,540 2,323
CAH 363 26 927 1,316
Medicare Dependent 62 8 147 217
Sole Community 173 7 262 442
Standard Rural PPS 141 3 204 348
Urban 1,166 42 1,157 2,365
Grand Total 1905 86 2,697 4,688
  • Congressional Outlook
  • There does NOT seem to be any significant push on
    the Hill to eliminate sequestration to mandatory
  • NRHA has and will continue to try to exempt rural
    providers from these devastating cuts.

Hospitals have absorbed nearly 122 billion of
new cuts since 2010
  • Sequestration - 58.3 billion
  • MS-DRG Coding Cuts - 35.3 billion
  • Two-Midnight Offset - 2.4 billion
  • Long-Term Acute Care Hospitals - 3 billion
  • Medicaid DSH - 16.6
  • Bad Debt - 2.1 billion
  • Impact on rural hospitals is detrimental.

  • Attacks on Rural Hospitals
  • Presidents Budget
  • CBO
  • MedPAC
  • Congressional Leaders
  • Reduce CAH payments from 101 to 100 of
    reasonable cost.
  • Eliminate CAH designation for hospitals that are
    less than 10miles from the nearest hospital.
  • Eliminate CAH program all together and convert
    hospitals to PPS.
  • Remove Necessary Provider permanent exemption
    from the distance requirement.

OIG Report Attacks CAHs
  • 846 CAHs would not meet the distance requirement
    if required to re-enroll
  • 306 were located 15 miles or fewer to a nearest
  • 235 were between 10-14 miles from nearest
  • 71 were less than a 10-mile drive.
  • If fully implemented complete crippling of
  • the rural health system.
  • 70, 80, even 90 of rural hospitals
  • in certain states impacted.

  • Headway made with Press and Congress
  • NRHA, AHA Slam OIG Report Urging Cuts To
    Critical Access Hospitals
  • Inside Health Policy
  • Deep cuts to Medicare funding would effectively
    kill rural healthcare.
  • Modern Healthcare

  • New Research/
  • Rural Hospital Financial Distress
  • Important series of reports by Sheps Center for
    Health Research analyzing proposed cuts to rural
  • Overall
  • Urban hospitals paid under PPS had consistently
    the highest profitability.
  • Rural hospitals paid under PPS and Critical
    Access Hospitals generally had the lowest
    profitability .
  • Sheps Center for Health Research

  • If proposed cuts occur
  • If Congress acts on any of the proposed cuts to
    CAHs, there will likely be a reduction of 20-30
    in Medicare payments (depending upon proposal).
  • If 20 reduction 72 of CAHs would operate in
    negative financial margins 39 would be at high
    or mid-high financial risk.
  • If 30 reduction, 80 of CAHs would operate in
    negative financial margin 45 would be a high or
    mid-high risk of financial distress.
  • CAHs in the south see the sharpest increase in

Such a substantial reduction in financial
viability could lead to an increase in the number
of CAHs experiencing insolvency, bankruptcy or
closure, with deleterious effects on the health
and economic well-being of these communities.
  • CAH Financial Distress by Region

  • The headlines are already here
  • 10 Alabama hospitals have closed in the last 3
    years Will yours be next?
  • Rural hospital closing hurts more than just the
  • Another Rural Georgia Hospital Closing

  • The impact
  • Rural Hospital Closures
  • 20 in 2013-14
  • State breakdown
  • Alabama 3 Nebraska 1
  • Georgia 4 Pennsylvania 1
  • Kentucky 1 Mississippi 1
  • North Carolina 1 Tennessee 1
  • Texas 4 Virginia 1

Critical Access Hospitals are not immune
CAH REIMBURSEMENT CUTS (Presidents budget)



41 of CAHs operate at a financial loss.
Medicare cuts will mean reductions in services,
job loss, or worse, hospital closures - -
jeopardizing rural seniors access to care.
How do we fight back?
  • We tell our story.
  • Our message is powerful. An investment in
    rural health
  • 1. Protects patients
  • 2. Protects the rural economy and
  • 3. Protects taxpayers

  • Protecting rural patients
  • Access to quality health care is the number one
    health challenge in rural America, Rural Healthy
    People 2010 and 2020
  • Rural Americans are older, poorer and sicker
    than their urban counterparts Rural areas have
    higher rates of poverty, chronic disease, and
    uninsured and underinsured, and millions of rural
    Americans have limited access to a primary care
    provider. (HHS, 2011)
  • Disparities are compounded if you are a senior or
    minority in rural America.

  • Death by Zip Code
  • University of Washington Study, July 2013
  • Largest report on status of Americas health in
    15 yrs.
  • Health equates to wealth and geography.
  • The study found that people who live in a wealthy
    area like San Francisco, Colorado, or the suburbs
    of Washington, D.C. are likely to be as healthy
    as their counterparts in Switzerland or Japan.
  • Those who live in Appalachia or the rural South
    are likely to be as unhealthy as people in
    Algeria or Bangladesh.
  • For example
  • Women in Marin County, California, where the
    median household income is 89,605, have the
    highest life expectancy -- 85 years
  • Women in Perry County, Kentucky, with median
    income 32,538, have the lowest life expectancy
    just under 73 years.

(No Transcript)
  • A half century of political efforts
  • Owsley County is a county located in the Eastern
    Coalfield region of Kentucky. As of 2010, the
    population was 4,755. According to the 2010
    Census reports, Owsley County is the "poorest
    county in the United States.
  • Robert F. Kennedy famed poverty tour highlighted
    the malnutrition of eastern Kentucky (field
    hearings on hunger).
  • His tour was not a unique event his brother John
    had planned to come in December of 1963, Johnson
    , Nixon, Ted Kennedy, Bill Clinton, Paul
    Wellstone all conducted "poverty tours" that
    included eastern Kentucky.

  • Rural lifestyles
  • Portrait of Kentucky
  • Obesity, a major risk factor for disease and
    disability, is most prevalent for men in Owsley,
    Kentucky and women in Issaquena, Mississippi
    obesity rates for men are lowest in San Francisco
    and for women in wealthy Falls Church, Virginia.

  • 2. Rural Economy
  • Health care is the fastest growing segment of the
    rural economy.
  • On average, 14 of total employment in rural
    areas is attributed to the health sector. Natl.
    Center for Rural Health Works. (RHW)
  • The average CAH creates 107 jobs and generates
    4.8 million in payroll annually. (RHW)
  • Health care often represent up to 20 percent of a
    rural community's employment and income. (RHW)
  • If a rural provider if forced to close their door

3. The Taxpayer
Rural hospitals are cost-effective
Rural vs. Urban Spending
Total savings if all beneficiarieswere treated
at the rural equivalent?

Less spending per beneficiary
Apply the rural rate of spend to urban
In Potential Medicare Savings
Medicare spends less on rural beneficiaries than
on urban beneficiaries
Approximate Totals
Source Rural Relevance Under Healthcare Reform
2014, Study Area B.
Delivering Value
Study Area C Hospital Performance
Who has the edge?
  • Quality
  • Patient Safety
  • Patient Outcomes
  • Patient Satisfaction
  • Price
  • Time in the ED

Rural hospitals match Urban hospitals on
performance at a lower price
Data sources include CMS Process of Care, AHRQ
PSI Indicators, CMS Outcomes, HCAHPS
Inpatient/Patient Experience, MedPAR, HCRIS
Source Rural Relevance Under Healthcare Reform
2014, Study Area C.
Medicare Reimbursement (Parts A and B) (2008)
Source The Dartmouth Atlas (Age, Sex, Race and
Price-Adjusted Medicare Reimbursements per
Beneficiary), weighted averages by HSA
(No Transcript)
  • The Challenges Ahead - - its all about
  • Over 150 new members of House of Representatives
    in last two years.
  • Many champions are no longer in Congress.
  • Fiscal conservatives view rural payments as
    special or bonus

Rural Hospital Closures 1980-90
The History of Rural
  • 1986 46 of ALL community hospitals were
    located in rural, non-MSA, counties
  • During the 80s nearly 10 of all U.S. rural
    hospitals closed Hart et. al, 1991
  • 1992-1999 -- 122 Rural Hospitals Closed
  • Nearly 60 of rural hospitals gross revenue come
    from Medicare and Medicaid
  • Approximately 439 Rural Hospitals in 20 years!
  • Moscovice, I. Rural hospitals a literature
    synthesis and health services research agenda.
  • Dec. 13-15, 1987 (a) p. 4
  • OIG Report Trends in Rural Hospital Closure
    1987-1991, July 1993

  • Finally, Congress intervened
  • Created Sole Community Hospital, Medicare
    Dependent Hospital, Low-volume Hospital
    Adjustment, Hold Harmless Payment, Critical
    Access Hospital (Balanced Budget Act of 1997).
  • Over the past 11 years, 7 more pieces of
    legislation have resulted in the modification of
    the CAH program.

  • They arent called Critical for nothing
  • Each year, Critical Access Hospitals provide care
  • 7 million emergency room visits
  • 38 million outpatient visits
  • 900,000 admissions
  • 86,000 babies delivered

  • Key CAH Legislation

  • CAH 96 Hour Condition of Payment
  • 42 USC 1395f(a)(8) stipulates payment
  • Leftover from original CAH statute
  • Recent research into two-midnight rule uncovered
  • NRHA working to eliminate subparagraph 8
  • S. 2037
  • H.R. 3991

  • Rural Veterans Legislation
  • Goal Rural veterans should have the choice to
    access care from their home community.
  • 40 mile threshold

  • Physician Supervision
  • Regulatory change as part of IPPS rule in 2009
  • Enforcement moratorium in place since then
    expired last year
  • NRHA supported legislation would set supervision
    to general for CAH and PPS
  • S. 1143
  • H.R. 2831

  • Regulations
  • IPPS for FY 2015
  • Implements new MSAs established by OMB in 2013
    based on 2010 census.
  • This implementation will require dozens of CAHs
    to recertify as rural under federal rules.
  • These facilities will have 2 years to recertify
    or convert to PPS status.

  • IPPS 2015 Cont.
  • Provides additional clarityand some relieffor
    the physician certification requirement of the
    96-hour rule
  • Providers will now be able to provide the
    certification up to 24 hours before the claim is
    submitted (pg. 837)

  • IPPS 2015
  • Implements other policies included in the last
    SGR package including
  • LVH payments
  • MDH payments
  • ICD-10 delay

  • RHC/FQHC New Concerns
  • CMS issued new guidance stating that a previous
    guidance indicating that preventative services
    were independently billable was in error.
  • Because RHCs and FQHCs are paid an all-inclusive
    per visit rate rather than per service, CMS
    claims it was a mistake to allow billing that was
    outside Welcome to Medicare visit or an
    Annual Wellness Visit
  • An appropriate EM HCPCS code would also need to
    be on the claim in order to be paid. 
  • Specific language published by one of the
    Medicare contractors
  •     HCPCS G0101, Cervical or vaginal cancer
    screening pelvic and clinical breast examination
    and Q0091, screening papanicolaou smear, are not
    considered to be a medically necessary
    face-to-face visits and will not be billed or
    paid at the all-inclusive rate when performed
  • The RHC/FQHC policy announcement goes on to
    state, Claims billed with a preventive service
    code(s) that does not generate a separate payment
    without another covered
  • service will be rejected

  • Rural veterans
  • Administration may advance more collaborative
    efforts between VA and other health care
    providers. NRHA asks Senators Moran (R-KS) and
    Tester (D-MT) to intervene to ensure that rural
    providers are not left behind.

  • We Need You Join our Grassroots Efforts
  • Support Key Rural Legislation
  • S. 2359 R-HoPE Act
  • S. Res. 26
  • S. 2037/HR 3991, the Critical Access Hospital
    Relief Act - Repeals the 96-hour physician
    certification requirement for CAHs
  • HR 3444, Critical Access Hospital Flexibility Act
  • S. 1143/HR 2801, Protecting Access to Rural
    Therapy Services (PARTS) Act

  • Washington Congressional Delegation
  • Get Involved
  • Importance of your association
  • Importance of your involvement

  • Thank You!!
  • Please join our grassroots calls!
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