Last year we saw a major legislative victory with a two-year delay of the Medicaid disproportionate share hospital (DSH) cuts. The fiscal year (FY) 2014 Joint Budget Resolution, signed into law on Dec. 26, 2013, included a provision to eliminate Medicaid DSH payment cuts in FY2014 and to delay FY 2015 cuts until FY 2016.
This two-year delay provides much needed relief for our member hospitals. Medicaid DSH payments help essential hospitals provide access to high-quality services like trauma, burn, and primary care for all patients, including the most vulnerable.
However, even with this relief from near-term Medicaid DSH cuts, there is much advocacy work to be done. And here is where I write my open letter to Congress.
Dear Congress, here is what you can expect from us in 2014:
We will continue to fight for changes to the Medicaid DSH cuts that are scheduled to begin in FY 2016. At the same time, we will take action on other issues that are important for essential hospitals, including:
- Preventing Congress from cutting payments to hospitals in order to pay for legislation that replaces the sustainable growth rate (SGR) formula.
- Ensuring that marketplace (exchange) plan networks include an adequate number of essential community providers (ECPs).
First, we will closely monitor congressional efforts to replace the SGR formula. The House and Senate introduced a consensus bill to replace the Medicare physician payment system, which is partially based on the SGR formula. This bill merged three bills passed last year in the Senate Finance; House Ways and Means; and House Energy and Commerce committees.
The bill does not include “pay fors,” or mechanisms to fund the legislation. We are concerned that some payments and programs that are critical for essential hospitals could be cut to help fund the legislation, though, including:
- Medicare Evaluation and Management (E&M) payment cuts, which would disproportionately hurt members of America’s Essential Hospitals. Our members make up just 2 percent of all hospitals, but would absorb 15-20 percent of the E&M payment cuts.
- Medicare bad debt payment cuts, which could limit access to care for low-income Medicare beneficiaries who are unable to meet their cost-sharing responsibilities under their Medicare plan.
- Medicaid provider tax cuts, which could jeopardize states’ abilities to maintain a stable, functioning Medicaid program. Currently, 49 states and the District of Columbia use provider taxes, which are also knows as provider assessments or fees.
Essential community providers
Second, we will closely monitor regulations around ECPs. We are concerned that the new health insurance plans sold through the marketplaces are not required to include an adequate number of ECPs in their plan networks. The federal government requires these plans to contract with ECPs, but the requirement is pretty weak. When it comes down to it, a plan may end up contracting with as few as one ECP hospital in each county in its service area. While we are still learning about how this requirement is impacting our members and their patients, we have a hunch that it could prevent patients from seeing their ECPs they know and trust.
All of these issues (and the issues yet to come) will certainly keep us busy in 2014. We look forward to working with our members, Congress, and the Administration on innovative ways to ensure that essential hospitals can continue to provide high-quality care to their patients.