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Advocacy Agenda

Disproportionate Share Hospital Funding

The Affordable Care Act (ACA) makes deep cuts to Medicaid and Medicare disproportionate share hospital (DSH) payments-and does so in a vacuum, with no adjustment for the actual level of uncompensated care hospitals provide. The law requires the federal government to reduce aggregate state DSH allotments by more than $18 billion through 2020.

But two years after the law’s passage, the Supreme Court ruled that states may opt out of a key ACA provision to reduce the number of uninsured: an expansion of Medicaid eligibility. To date, about half the states have rejected Medicaid expansion, meaning 6.4 million more people than expected will remain uninsured by 2019. In turn, that means hospitals nationwide will experience $53.3 billion more in uncompensated care than expected when the ACA passed in March 2010.

The ACA was silent on what happens to DSH allotments in fiscal year (FY) 2021 and beyond. The Congressional Budget Office interpreted the law to mean that DSH allotments would return to pre-ACA levels. But Congress has twice “rebased” DSH—extended the much lower 2020 total into 2021 and 2022—and used the additional savings to restore physician payments cut by Medicare’s sustainable growth rate and for other policy extenders.

America’s Essential Hospitals calls on Congress to delay the DSH cuts for three years and reconsider the reductions in light of the dramatically altered coverage landscape.

Medicare Evaluation & Management Payments

Policymakers have made various recommendations to reduce overall Medicare hospital outpatient payments for evaluation and management (E&M) services. Such cuts would effectively lower the payment rate to the equivalent rate for physicians, and would disproportionately hurt hospitals that care for society’s most vulnerable. While members of America’s Essential Hospitals represent just 2 percent of all hospitals and 6 percent of all discharges, they would absorb 15 percent of the cuts from reduced E&M payments. These payment cuts are often considered as a deficit reduction and budget savings measure. We urge Congress to protect hospital E&M payments.

Preserve State Flexibility to Fund Medicaid

As part of deficit reduction discussions, the administration and some lawmakers have proposed limiting or eliminating states’ use of provider taxes, also known as provider assessments. In 49 states and the District of Columbia, health care providers pay assessments to help their state fund its share of Medicaid costs. These assessments allow states to maintain a functioning Medicaid program. Restricting states’ use of provider assessments—or eliminating them altogether—would reduce the flexibility states have to finance their Medicaid programs and hurt patient access to care. Essential hospitals urge Congress to oppose any attempt to reduce or eliminate provider assessments.

Health Insurance Marketplaces

With the start of enrollment and coverage in ACA health insurance exchanges, America’s Essential Hospitals has actively monitored and responded to member reports of challenges to participation in exchange plans. Specifically, some members have raised concerns about potential exclusion from marketplace plans or unfavorable placement into higher cost-sharing tiers. America’s Essential Hospitals staff has actively engaged senior leaders at the Centers for Medicare & Medicaid Services’ Center for Consumer Information and Insurance Oversight and the Health Resources and Services Administration to discuss possible solutions.

The 340B Drug Pricing Program

The federal 340B Drug Pricing Program provides important funding support to hospitals for their care of vulnerable people. Consistent with the law and congressional intent, hospitals purchase pharmaceuticals at a discount and use the savings to deliver essential care services to the uninsured and other disadvantaged patients, both within the hospital and in the community. The 340B program is a key component of the nation’s health care safety net.

America’s Essential Hospitals, which supports transparency for and appropriate federal oversight of 340B, works to defend the program against attempts to scale back its use or limit how hospitals may use savings to benefit vulnerable patients.

Immigration Reform

After the 2012 election, in which Latinos had a significant influence on the vote for president, both parties renewed their interest in comprehensive immigration reform. Following months of bipartisan negotiations, the Senate overwhelmingly passed a comprehensive immigration reform bill that included a path to citizenship for the estimated 11 million undocumented immigrants in the United States. But that path included a 10-year provisional status, during which immigrants cold not access federal health programs. Combined with an existing five-year waiting period for Medicaid once an immigrant achieves legal status, the law would require immigrants to wait up to 15 years for access to affordable health care coverage. The House has yet to consider the legislation.

America’s Essential Hospitals and its allies believe Congress must make health care part of the discussion on immigration reform.


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