Urgent Rural Healthcare Issues Linger After ACA Repeal Drama

Urgent Rural Healthcare Issues Linger After ACA Repeal Drama

With the dust settling after last week’s dramatic Senate vote to repeal parts of the Affordable Care Act, which narrowly failed, many questions remain about federal health reform and legislation. Rural healthcare providers that nervously watched the near overhaul of Medicaid and other sources of funding are now left to consider the consequences of inaction, while looking ahead to legal and regulatory changes that are still possible in the short term.

Perhaps the most widely publicized of these looming policy decisions is the Trump administration’s treatment of cost-sharing reduction (CSR) subsidies to insurers under the Affordable Care Act. If the decision is to not continue the payments, and Congress does not appropriate the funds, this would destabilize the already fractured individual marketplace. The CSR payments are also the subject of a federal lawsuit over the legality of being distributed without Congressional appropriation, and the Court recently allowed state attorneys general to intervene in the case.

Without CSR payments, some insurers would likely back out of the 2018 individual marketplaces. This would especially impact rural America because, by and large, the counties with dangerously few participating insurers are rural. In Georgia, many rural counties' exchanges are only served by one insurer, Blue Cross Blue Shield of Georgia, which could still reverse course if it so chooses. BCBSGA has already announced rate increases averaging 41 percent for 2018, which –- combined with potential non-enforcement of the individual mandate -- could cause fewer signups in the individual marketplace even if insurance options remain.

Another major ACA provision on the minds of rural providers is the impending cuts to Medicaid disproportionate share hospital (DSH) payments, which have been delayed to this point under the ACA. These payments significantly help hospitals serving indigent and uninsured patients, including rural hospitals. Both the House-passed American Health Care Act and the most fully formed Senate bill, the Better Care Reconciliation Act, called for these cuts to be eliminated, with BCRA going a step further and increasing DSH payments to non-Medicaid expansion states.

With the GOP-led health efforts failing, CMS has released a proposal to begin the DSH cuts as scheduled beginning in FY2018. Without any intervening action from Congress or a reversal from CMS, these cuts would be a devastating blow to rural healthcare.

While rural providers seemingly dodged a bullet when the AHCA/BCRA’s Medicaid cuts failed to pass (particularly rural hospitals in Medicaid expansion states), attention will now shift to Medicaid waivers and their impact on rural healthcare. One of the first joint actions of HHS Secretary Dr. Tom Price and new CMS Administrator Seema Verma was to write a letter to governors in part encouraging the use of Section 1115 Medicaid waivers to undertake a variety of delivery system reforms and access additional Medicaid funding. Currently, seven states use Section 1115 waivers to implement alternative versions of the ACA’s Medicaid expansion while drawing down much-needed federal Medicaid funds.

Georgia is not currently taking advantage of a Section 1115 waiver but lawmakers were recently urged to adopt a model similar to those of Oklahoma or Texas. Grady Health System proposed a 1115 waiver plan in 2015, which the state ultimately deemed too expensive.

Another program seemingly in the health reform crosshairs is the 340B Drug Pricing Program, which has been a boon to some rural hospitals. The program allows safety net providers to purchase prescription drugs at a significant discount. The Trump administration has taken aim at the 340B program, referencing possible reform in an Executive Order but later, reportedly, backing off this position. Nonetheless, CMS went on to release a proposed rule on July 20 containing a 29-percent cut to reimbursements under the 340B program (excluding Critical Access Hospitals whose reimbursement is cost-based). Rural healthcare advocacy groups must insist that rural hospitals be exempt from the final rule, or else this rare lifeline for rural hospitals may disappear.

Outside of the ACA repeal bills, there has been a host of federal legislation proposing to aid rural healthcare, but the prospects of these bills advancing this year are unclear. Such bills include the Save Rural Hospitals Act, halting various payment cuts and other regulations adverse to rural hospitals, the Rural Emergency Acute Care Hospital (REACH) Act, which would create a new classification of stripped-down rural hospitals with enhanced reimbursement, the Fair Medicare Hospital Payments Act, which would adjust the area wage index to the benefit of many rural hospitals, and the Medicare Telehealth Parity Act, which would gradually increase the number of rural sites eligible for telehealth reimbursement.

 

 

 

 

 

BCBS Emergency Room Rule Fast Approaching Despite Controversy

BCBS Emergency Room Rule Fast Approaching Despite Controversy

The controversial reimbursement policy advanced by Blue Cross of Georgia (BCBSGA) last month is hurtling toward an implementation date of July 1, with big implications for emergency rooms in Georgia. The goal of the policy is to reduce costly visits to emergency rooms by tightening coverage rules for non-emergent conditions. 

BCBSGA, a subsidiary of Anthem, sent out letters to members in May stating, “Going to the emergency room (ER) or calling 9-1-1 is always the way to go when it’s an emergency. And we’ve got you covered for those situations … But starting July 1, 2017, you’ll be responsible for ER costs when it’s NOT an emergency. That way, we can all help make sure the ER’s available for people who really are having emergencies.” This policy change will impact large swaths of Georgia, especially rural Georgia, with BCBS being the only insurer providing individual insurance plans in 96 of Georgia’s 159 counties.

The new policy defines inappropriate visits to the ER as any visit except emergency visits, defined as:

“Emergency” or “Emergency Medical Condition” means a medical or behavioral health condition of recent onset and sufficient severity, including but not limited to, severe pain, that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that not getting immediate medical care could result in: (a) placing the patient’s health or the health of another person in serious danger or, for a pregnant woman, placing the woman’s health or the health of her unborn child in serious danger; (b) serious impairment to bodily functions; or (c) serious dysfunction of any bodily organ or part. Such conditions include but are not limited to, chest pain, stroke, poisoning, serious breathing problems, unconsciousness, severe burns or cuts, uncontrolled bleeding, or seizures and such other acute conditions as may be determined to be Emergencies by us.

The new policy does not apply to (1) children younger than fourteen, (2) members directed to the ER by another medical provider, (3) instances where an urgent care clinic is more than fifteen miles away from the member’s primary address, or (4) when emergency care is delivered on Sundays or major holidays.

Similar letters were sent to Anthem customers in Missouri and Kentucky.

The “Prudent Layperson” Standard

But is BCBSGA’s new policy legal? The American College of Emergency Physicians (ACEP) has criticized the rule, arguing it violates the “prudent layperson” standard. The prudent layperson, as codified in federal regulations (see 45 C.F.R. § 147.138) and Georgia law (see O.C.G.A. §§ 33-20A-3, 9) requires certain insurers to cover services where a prudent layperson, possessing an average knowledge of medicine and health, would believe the condition to be one of a specified number of emergent situations.

For example, if a member arrives at the ER for symptoms reasonably believed to be related to a heart attack, and it turns out that the member was not experiencing a heath attack, the insurer is required by law to cover the member’s ER visit under the prudent layperson standard.

A spokesperson from Anthem has countered that the policy actually tracks the language of the “prudent layperson” standard and simply enforces rules that have long existed in provider contracts and policies.

But, BCBSGA’s notice to providers states the claims review “will take into consideration the symptoms that brought the member to the emergency room as well as the final diagnosis.” This is likely the point on which any legal debate over the new policy would turn, with challengers arguing the “prudent layperson” standard does not allow for review of final diagnoses.   

EMTALA Conundrum

Another legal issue the policy raises is a hospital’s obligation under the Emergency Medical Treatment and Active Labor Act (EMTALA). Under EMTALA, hospitals are federally mandated to treat any person presenting to the emergency room with an emergency medical condition regardless of that patient’s ability to pay.

The definition of “emergency medical condition” under EMTALA (42 C.F.R. § 489.24) is very similar to that of the “prudent layperson” standard — and therefore similar to the new BCBSGA policy — albeit with subtle differences. Regardless of the similarities, a hospital may be subject to two differing interpretations, feeling pressure to treat a patient under EMTALA but then denied payment according to the BCBSGA medical director’s review. This may lead to more uncompensated care among a hospital’s insured population, on top of the uncompensated care regularly incurred treating uninsured patients.

Telehealth’s Role

BCBSGA is recommending telehealth as one alternative to non-emergent ER visits, according to one report. Specifically, the May letter to customers suggested use of BCBSGA’s preferred telehealth vendor, LiveHealth Online: “[I]f a member can’t get an appointment with their primary care doctor, most non-emergency medical conditions can be easily treated at retail clinics, urgent care clinics, or 24/7 telehealth services such as LiveHealth Online.”

The utilization of telehealth for low-acuity conditions and triage is becoming increasingly popular with health plans. Payers welcome telehealth as an alternative to costly, non-emergent ER visits, and coverage policies like that of BCBSGA will likely continue to drive consumers to lower-cost telehealth options.

Boling & Company will continue to follow the implementation of this new policy to better inform individuals and healthcare providers in Georgia about how they will be impacted.

 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

Flurry of Federal Legislation on Telehealth - Recap

Flurry of Federal Legislation on Telehealth - Recap

If the first several months are any indication, 2017 promises to be a big year for telehealth on Capitol Hill. Below is a current rundown of pending legislation that aims to expand access to healthcare through telehealth/telemedicine.

CHRONIC Care Act of 2017

The bipartisan Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 contains a variety of proposed Medicare changes, such as expanding in-home care and strengthening accountable care organizations (ACOs).

The legislation also seeks to improve access to telehealth services. Specifically, the CHRONIC Care Act would:

·      allow at-risk ACOs to provide telehealth services without Medicare’s geographic restrictions and with the home as an added originating site;

·      allow Medicare beneficiaries receiving dialysis treatments at home to complete monthly check-ins with their doctor via telehealth;

·      expand coverage for telehealth services in Medicare Advantage plans; and

·      remove Medicare’s geographic restrictions for telestroke services.

The Congressional Budget Office (CBO) estimates the costs of the CHRONIC Care Act to be negligible. Expanding Medicare reimbursement of telehealth services is projected to cost $150 million over a decade per the CBO, but increased coverage of telehealth via Medicare Advantage plans is projected to save Medicare $80 million. Overall, the CHRONIC Care Act received a positive score from the CBO, thanks in large part to significant cuts in the Medicare Improvement Fund.

CONNECT Act

On May 3, 2017, six senators reintroduced a bipartisan bill designed to expand Medicare coverage for telehealth services and remote patient monitoring. The legislation, Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act of 2017, was initially introduced last year by the same six senators. The CONNECT Act includes many of the same provisions as the CHRONIC Care Act, but builds on them.

The bill has five stated primary goals:

1.     Build upon provisions in the CHRONIC Care Act of 2017 to expand telehealth platforms in accountable care organizations and Medicare Advantage, as well as patients undergoing home dialysis and stroke treatment programs;

2.     Expand remote patient monitoring programs for individuals with chronic conditions;

3.     Expand telehealth and remote patient monitoring programs at community health centers and rural clinics, and integrate the technology into bundled and global payment programs;

4.     Give HHS the authority to lift restrictions on telehealth—including geographic limitations, originating site restrictions, reimbursements limitations, and restrictions on the use of store-and-forward technology—when quality and cost effectiveness criteria are met; and

5.     Expand the use of telemental health services.

The CONNECT for Health Act has garnered more than 50 endorsements, including support from the American Medical Association, American Telemedicine Association, Healthcare Information and Management Systems Society, Federation of State Medical Boards, and a wide array of vendors and health systems.

The Hallways to Health Act

The Hallways to Health Act was also recently reintroduced in Congress. The legislation would provide federal support to expand telehealth access to schools and medically underserved areas.

The bill would amend Title XXI of the Social Security Act to:

1.     Provide grants for school-based health centers that partner with community health care workers who can coordinate care and services in the community for families;

2.     Create a demonstration project to provide telehealth services at centers and expand existing telehealth services in medically underserved areas; and

3.     Ensure school-based health centers can be reimbursed for covered services under Medicaid and the Children’s Health Insurance Program at the same level as services provided in a physician’s office or outpatient clinic.

The Telehealth Innovation and Improvement Act of 2017

The Telehealth Innovation and Improvement Act is another piece of current bipartisan legislative activity that touches on telehealth. The legislation seeks to encourage health providers to launch telehealth programs through HHS’ Center for Medicare and Medicaid Innovation (CMI). In addition, the bill calls on the CMI to evaluate telehealth models “for cost, effectiveness, and improvement in quality of care without increasing the cost of delivery,” and to reimburse telehealth models under Medicare if they satisfy those criteria.

In a press release, the sponsors of the legislation, Senator Cory Gardner (R-Colorado) and Senator Gary Peters (D-Michigan), criticized Medicare for its limited coverage of telehealth, saying CMS sets “a poor industry standard, [discourages] innovation and [restricts] access to specialized services.” Senators Gardner and Peters stressed that expanded reimbursement for telehealth care will benefit citizens of urban and rural communities, and the legislation could help “reduce costly emergency room visits, hospitalizations and readmissions” and “incentivize the healthcare industry to develop new technologies that could potentially reduce costs and improve patient health.”

Furthering Access to Stroke Telemedicine (FAST) Act

Originally introduced in 2015, the Furthering Access to Stroke Telemedicine (FAST) Act was reintroduced to Congress in February 2017. The bipartisan telehealth bill, supported by the American Heart Association (AHA) and the American Academy of Neurology, would alter the Social Security Act to allow Medicare coverage of telestroke services—no matter where the patient is located.

The AHA President Steven Houser, PhD, pointed to quantitative data to support the merits of the bill — “Evidence indicates that telestroke improves patient outcomes and reduces disability. However, nearly 94 percent of the strokes that occur in America take place in areas where telestroke is not paid for by Medicare. We urge Congress to give more Medicare patients access to this proven form of treatment and support the FAST Act.”

Get to know Dr. Bruce Struminger, afternoon plenary speaker at the 2nd Annual Rural Healthcare Symposiumrural

Get to know Dr. Bruce Struminger, afternoon plenary speaker at the 2nd Annual Rural Healthcare Symposiumrural

Over the next several days we will be featuring speakers who will headline the 2nd Annual Rural Healthcare Symposium at the University of Georgia School of Law, April 21, 2018, in Athens, Georgia. Dr. Bruce Struminger will lead the "Afternoon Plenary Session" at 2:15 pm. Seats are filing up quickly -- register for this free event here.

Dr. Bruce Baird Struminger

Dr. Bruce Baird Struminger

Dr. Bruce Baird Struminger serves as Associate Director of Project ECHO and an Associate Professor of Internal Medicine in the Department of Infectious Diseases at the University of New Mexico School of Medicine. Launched in 2003 at UNM, Project ECHO (Extension for Community Healthcare Outcomes) links expert specialist teams at an academic ‘hub’ with primary care clinicians in rural communities — the ‘spokes’ — using telehealth and other innovations. The goal of Project ECHO is to make specialized medical knowledge accessible wherever it is needed to save and improve lives.

Project ECHO has quickly become a national model of excellence and was recently the subject of federal legislation, the ECHO Act, that directed the U.S. Department of Health and Human Services to explore and develop similar approaches nationwide.

Dr. Struminger began his career as an internist and public health practitioner with the US Indian Health Services on the Navajo Indian Reservation. He went on to work for the Centers for Disease Control and Prevention (CDC) for six years, acting as the Country Director for the CDC in Cote d’Ivoire from 2007-2009, and as Country Director for Vietnam from 2009-2012.

Dr. Struminger graduated from Harvard College with a degree in Art History and went on to graduate from Johns Hopkins School of Medicine. After graduating from Johns Hopkins School of Medicine, Dr. Struminger also completed a degree in Medical Anthropology from the Harvard Graduate School of Arts and Sciences. He completed his residency in Internal Medicine at the University of Michigan in Ann Arbor.

Get to know Jim Langford, morning plenary speaker at the 2nd Annual Rural Healthcare Symposium

Get to know Jim Langford, morning plenary speaker at the 2nd Annual Rural Healthcare Symposium

Jim Langford

Jim Langford

Over the next several days we will be featuring speakers who will headline the 2nd Annual Rural Healthcare Symposium at the University of Georgia School of Law, April 21, 2018, in Athens, Georgia. Jim Langford will lead the "Morning Plenary Session" at 10:45 am. Seats are filing up quickly -- register for this free event here.

James ‘Jim’ B. Langford serves as Executive Director for the Georgia Prevention Project. The Georgia Prevention Project is a statewide drug-prevention program that partners with community members, schools, and prevention professionals to develop strategies, build coalitions, and provide drug education resources to reduce the use of dangerous drugs, especially methamphetamines, among teens and young adults. In recent years, drug overdose deaths have exceeded motor vehicle crash deaths in Georgia, per a GPP report. 

Mr. Langford’s focus on the opioid epidemic follows a long career in public service programs benefiting Georgia communities. He is the former President of the Society for Georgia Archaeology, and a former member of the Georgia Board of Natural Resources (DNR), the Governor's Environmental Advisory Council, and the Georgia Humanities Council. From 2004 to 2007, Mr. Langford served as Georgia State Director of the Trust for Public Land (TPL). At TPL, he led the effort to design the connected park and greenspace system of the Atlanta BeltLine, and he directed the acquisition of more than $40 million of land to be converted from commercial and industrial uses into parkland.

A native of Calhoun, Georgia, he is the founder of two successful non-profits: the MillionMile Greenway, an organization that helps communities throughout the eastern United States preserve and connect greenspace, and the Coosawattee Foundation, an organization that concentrates its efforts on the study and protection of archaeological sites and environmentally sensitive areas in northwest Georgia. He earned his undergraduate degree in journalism from the University of Georgia and an MBA degree from Harvard Business School.

At the Rural Healthcare Symposium at UGA Law, Mr. Langford will speak about the Georgia Prevention Project’s efforts to combat opioid addiction in Georgia. He will discuss the findings of the project’s recent white paper led by the Substance Abuse Research Alliance, a collaboration among GPP and more than 60 research institutions including most major universities in Georgia and the CDC. 

Georgia Legislative Wrap-Up: Rural Healthcare

Georgia Legislative Wrap-Up: Rural Healthcare

The latest session of the Georgia General Assembly is in the books, and the healthcare industry has been impacted as usual. Below, we highlight just a few of the successful bills with particular relevance to rural healthcare.

Perhaps more consequential than any single bill passed this session, Georgia is reportedly reconsidering a Medicaid “expansion waiver” in the wake of the Affordable Care Act withstanding a recent Congressional challenge. The benefit of this waiver program could be huge for rural healthcare in Georgia, which suffers from low Medicaid reimbursement and limited Medicaid eligibility. 

SB 180 and SB 14 Tweak Existing Law to Aid Rural Hospitals

Senate Bill 180 passed both chambers of the Georgia legislature and is designed to encourage increased donations to rural hospitals in Georgia. SB 180  was amended to include provisions of unsuccessful House Bill 54. As previously discussed, House Bill 54 sought to raise the tax credit from 70 percent to 90 percent for individuals and corporations who donate money to rural hospitals. These provisions were added to Senate Bill 180.

If SB 180 is signed by the Governor, donors to rural hospitals will receive increased tax credits retroactive to January 1, 2017; eligibility for such tax credits will extend to hospitals in counties of up to 50,000 people (increased from 35,000); and hospital payments to third-parties soliciting, administering, or managing the tax credits will be capped at three percent (3%) of a hospital’s total donations.

Senate Bill 14 amends the Georgia’s Code to make ‘rural hospital organizations’ eligible for monetary grants from the state. Under the current Georgia Code, rural hospitals not operated by a hospital authority are only eligible for state grants in limited scenarios. The legislation defines a rural hospital organization as an acute care hospital, in a rural county that:

1.     Provides inpatient hospital services at a facility in a rural county;

2.     Participates in and accepts both Medicaid and Medicare patients;

3.     Provides services to indigent patients;

4.     At least 10% of their annual revenue is categorized as indigent care, charity care, or bad debt;

5.     Annually files an IRS Form 990;

6.     Maintains a 24-hour emergency room;

7.     Operated by a county or municipal authority, or is designated as a tax-exempt organization by the IRS.

The legislation allows qualifying rural hospital organization to apply for monetary grants for projects ranging from facility renovations, equipment purchases, personnel retention, or nontraditional healthcare delivery systems.

In addition, SB 14 expands the definition of what qualifies as a rural county for both hospital authorities and rural hospital organizations to any county having fewer than 50,000 residents (up from 35,000). Finally, SB 14 raises maximum grant allocations for eligible hospital authorities and rural hospital organizations from $200,000 to $500,000 for strategic planning grants, and from $1.5 million to $2.5 million for grants involving nontraditional healthcare delivery systems. Hospital authorities and rural hospital organizations are eligible for up to $4 million annually in grants from the state under the new statutory revisions.

House and Senate Pass Resolutions Focused on Rural Development

The Georgia House of Representatives adopted House Resolution 389. The resolution creates the House Rural Development Council, which will be composed of 15 House lawmakers appointed by the Speaker of the House, David Ralston. The Georgia Senate passed Senate Resolution 392, creating the Senate Rural Georgia Study Committee. The Senate committee will be composed of 7 Senators appointed by the President of the Senate, Lieutenant Governor Casey Cagle.

The appointed House and Senate members will be tasked with examining problems found in rural communities around Georgia, specifically population loss, lack of doctors or hospitals, poor infrastructure, educational achievement, job scarcity, and overall lack of economic growth. Beginning April 1, 2017, the appointed legislators will begin holding meetings throughout rural Georgia with local officials, educational and business leaders, healthcare providers, civic groups, and other interested individuals for input of how to address the identified issues.

Based upon these meetings and research, the appointed legislators will explore possible legislative solutions to the identified issues for rural Georgia and introduce corresponding legislation during the next session of the Georgia General Assembly in January 2018. In the context of healthcare, H.R. 389 and S.R. 392 represent an opportunity for lawmakers to better understand the healthcare needs of rural Georgians to ensure those needs are met in the coming years.

Multiple Successes in Fight Against Opioids

House Bill 249 is set to become the latest sweeping law aimed at combatting the opioid epidemic. The bill contains various efforts to reduce opioid overdoes, including codifying Governor Nathan Deal’s executive order allowing the sale of overdose antidote naloxone without a prescription, and strengthening the state’s Prescription Drug Monitoring Program, which requires physicians to report opioid prescriptions.

Another successful bill, Senate Bill 88, entrusts the Department of Community Health with substantial licensure and oversight controls over “narcotic treatment programs.” Lawmakers have expressed concern over clinics offering narcotic addiction treatment, which often involves opioid prescriptions to fight the patient’s addiction to other opioids, and placed a one-year freeze on such clinics last summer.

Cancelable Loan Program for Rural Practitioners Expanded

House Bill 427, the ‘Physicians, Dentists, Physician Assistants, and Advanced Practice Registered Nurses for Rural Areas Assistance Act,’ expands the types of healthcare providers eligible for cancelable loans if they agree to practice medicine in qualifying rural areas of Georgia. The legislation now makes dentists, physician assistants, and advanced practice registered nurses eligible for cancelable loans. Cancelable loans for healthcare providers in rural Georgia were previously limited to physicians. The goal of the new legislation is to address the shortage of physicians and other healthcare practitioners in rural Georgia.

 

 

 

 

 

 

 

Rural Health Under Republicans' Post-Obamacare American Health Care Act

Rural Health Under Republicans' Post-Obamacare American Health Care Act

Last month, we posted a blog highlighting the special implications of Obamacare replacement or reform on rural healthcare. With Republicans in the U.S. House of Representatives revealing their first concrete proposal for overhauling the landmark Affordable Care Act last night, how have these possibilities evolved? 

The American Health Care Act, comprised so far of a pair of bills, advances a wide range of post-Obamacare policies, but does not repeal the entire law. Some components that are already receiving ample attention are the shift from income-based tax credits to age-based tax credits, repeal of the individual mandate, penalties for lapses in coverage, defunding of reproductive health services, and the realities confronting President Donald Trump’s statement that the new plan will mean insurance for everybody. 

Here, we focus on a select few provisions of the AHCA keenly impacting rural health providers and their patients:

- Medicaid Reform. Perhaps most important for rural health providers, the AHCA significantly reshapes the Medicaid landscape, albeit more gradually than some had anticipated. The bill calls for substantial reductions in federal matching funds to state Medicaid programs beginning on January 1, 2020, with the caveat that states would continue to receive enhanced Medicaid payments for people enrolled in Medicaid before that date. 

For new enrollees in 2020 and beyond, the federal government would only pay its pre-Obamacare share of Medicaid costs — a move that is sure to lead to cuts in expansion states’ Medicaid programs. States would have until Dec. 31, 2019, to decide whether to expand Medicaid (or implement a waiver program) and get their members enrolled. 

Studies have shown rural hospitals are more impacted by the Medicaid expansion or lack thereof than are city-based hospitals. 

Another major change to Medicaid proposed by the AHCA is a shift to per capita aggregate spending limits beginning in 2020. Notably, the initial per capita lump sum to states would be based on their respective Medicaid spending in FY 2016. Therefore, states that were to expand Medicaid or implement a waiver program between 2017 and 2019 would not receive a corresponding benefit in their per capita allotments.

- Safety Net Funding to Non-Expansion States. In states to have not and will not expand Medicaid, the AHCA would extend $10 billion in safety net funding for Medicaid providers over five years ($2 billion/year). As a rough comparison of budgetary scope, the Congressional Budget Office estimated that the next 10 years of Obamacare’s Medicaid expansion nationwide would have involved $993 billion in federal funding.

- DSH Cuts. Medicaid Disproportionate Share Hospital payments, protecting safety net hospitals that treat a high number of indigent patients, were scheduled to be cut beginning in FY 2018 under Obamacare. The AHCA would repeal Medicaid DSH cuts for non-expansion states in 2018 before they even take effect, and would repeal such cuts in expansion states beginning in 2020. 

- Community Health Center Funding. In recent years the federal government has increasingly supported Community Health Centers, also known as Federally Qualified Health Centers, which are not exclusive to rural areas but do exclusively serve medically underserved areas. The AHCA would offer a one-time increase in funding to Community Health Centers of $422 million. 

- 340b Program. One of the effects of a less-than-wholesale repeal of Obamacare is that some provisions may be simply left alone without much public attention. At least in the first iteration of the AHCA, this appears to be the case for the 340b Drug Pricing Program, which was expanded to include 1,100 rural hospitals under Obamacare. The rural hospital community would surely welcome a continuation of this change. 

- Individual Marketplace. As mentioned above, the AHCA proposes substantial changes to the individual insurance marketplace, including the shift from income-based tax credits to age-based tax credits with older consumers receiving more assistance. These changes would have many direct and indirect impacts on rural healthcare, largely by increasing patient co-insurance and reducing the number of privately insured patients. For example, because the AHCA premium tax credits are not tied to local premiums as under Obamacare, people in areas where premiums are higher (often rural areas) would receive a flat tax credit based on age but would be stuck with the remainder of the higher local premium.

Generally, rural areas have lower-income populations than do urban areas, so premium tax credits that are not adjusted for income level may lead to more uninsured patients in rural areas. This handy interactive map from the Kaiser Family Foundation (adjustable by age and income!) shows that 40-year-olds with an income of $30,000 will often face reduced tax credits under the AHCA in rural America, but will not be as affected in urban pockets. 

The AHCA aims to address some of these private marketplace deficits through lower premiums via health plan competition and increased use of health savings accounts. 

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Overall, the AHCA proposes a handful of measures acknowledging the difficulties of rural health providers, offering safety net funding to non-expansion states, halting impending DSH cuts, increasing funding to FQHCs and leaving the 340b program untouched.

However, the likely reduction in insured patients -- whether by decreased Medicaid funding or changes to the individual marketplace -- threatens to outweigh these potential benefits. The National Rural Health Association has already released a statement expressing concern about the bill. 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

Senator Isakson and Others Reintroduce Fair Medicare Hospital Payments Act

Senator Isakson and Others Reintroduce Fair Medicare Hospital Payments Act

Last week, several United States Senators including Georgia Senator Johnny Isakson introduced legislation aimed at improving Medicare’s compensation of hospitals, especially hospitals located in rural, underserved, or economically struggling regions. 

Like similar legislation that stalled in 2016, the Fair Medicare Hospital Payments Act of 2017 would alter a Medicare reimbursement formula that results in disproportionately low Medicare payments to hospitals located in rural and low-wage areas. The formula, known as the ‘area wage index,’ is based upon the relative hospital wage level in a hospital’s geographic area compared to the national average.

If passed, the 2017 legislation would create a national minimum ‘area wage index’ of 0.874. Hospitals that currently have an index below 0.874 would benefit from increased Medicare payments by way of this “floor” to the area wage index.   

“Too many rural hospitals have been forced to close in recent years, and hospitals in states like Georgia are at a unique disadvantage because of the way these Medicare payments are calculated,” Sen. Isakson said in a press release. “This legislation would address the discrepancy in payments, help to prevent future closures of hospitals in medically underserved areas, enable hospitals to boost wages in economically struggling regions, and ensure patients have access to emergency and needed care.”

More than than 100 hospitals in Georgia would benefit from this increased Medicare payments, according the press release. The newly introduced legislation has also been embraced by many organizations, including the Georgia Hospital Association and the National Rural Health Association.  

Obamacare Update – Repeal, Repair, Is There a Difference?; Special Implications for Rural Health

Obamacare Update – Repeal, Repair, Is There a Difference?; Special Implications for Rural Health

Several key Republican lawmakers have reportedly shifted their rhetoric in recent weeks from repealing and replacing the Patient Protection and Affordable Care Act (“ACA”) to repairing it. But with many of the leading ‘repeal’ plans promising to reinstate certain elements of ACA immediately, the differences between these two paths may be academic. 

Throughout the last election cycle, Republicans promised newly insured individuals they would not lose insurance coverage if the ACA were repealed. Facing pushback from the public on certain popular provisions of the law, Senator Lamar Alexander (R – TN), chairman of the Senate health committee, announced the alternative plan could be more accurately described as a “repair” than a replacement. Adding to the mixed message, Speaker of the House, Rep. Paul Ryan, (R – WI) said ‘repairing’ the ACA actually meant repealing and replacing it

Semantics aside, it is becoming increasingly clear that the GOP replacement plan will share some characteristics with the ACA. Fundamentally, most prominent GOP alternatives mirror the ACA’s multi-payer system in which consumers are offered tax credits for purchasing private insurance on an individual marketplace, while public programs like Medicaid are bolstered through federal funds. Within this context, differences exist as to how the tax credits will be distributed, how the Medicaid funds will be applied, and how insurers will be restricted in shaping their plans. Also like the ACA, Speaker Ryan’s “Better Way” plan seeks to prohibit insurers from excluding members based on preexisting conditions, and to allow adults up to age 26 to remain on their parents’ plans.  Health and Human Services Secretary nominee Tom Price, who has proposed his own replacement plan, supports a limited form of preexisting condition exclusions and stated in his confirmation hearing that he would considering preserving the CMS Innovation Center that has housed many of the ACA’s value-based payment reforms. 

Possible Implications of a Complete Repeal for Rural Hospitals

An overhaul of the ACA comes at a critical time for healthcare in rural America. A December 2016 report from the CDC found a decline in life expectancy for Americans—particularly among Americans living in rural areas—for the first time in 20 years. The CDC attributed this finding to rural Americans having higher rates of chronic illness, obesity, alcoholism, mental illness, and suicide relative to their urban counterparts. The financial health of hospitals serving rural populations remains dire; an estimated 700 rural hospitals across the country are vulnerable to closure. 

Here are some elements of the ACA that have especially affected rural healthcare and whose repeal would have significant impacts on rural providers. 

Medicaid Expansion

Repealing the ACA’s Medicaid expansion would be a massive blow to rural health providers, but its impact would be greater, naturally, in states that opted to expand Medicaid in the first place. After the U.S. Supreme Court made expansion optional in 2012, thirty-two states including the District of Columbia expanded Medicaid coverage under the ACA. For providers in states that declined to expand Medicaid, a repeal of the expansion will be business as usual. 

In so-called “expansion states,” many hospitals will see an increase in uncompensated care if the ACA’s replacement withdraws federal support for expanded Medicaid programs. The American Hospital Association has estimated repealing the expansion of Medicaid would cost hospitals across the United States more than $160 billion due to reductions in Medicaid revenue received and an increase in unpaid medical bills. These financial losses would impact all hospitals, especially rural hospitals due to a greater percentage of their patient populations gaining coverage under the Medicaid expansion relative to urban and suburban hospitals. 

Medicare and Other Reimbursement Cuts

The ACA contained a variety of Medicare payment cuts that have adversely affected health providers. Repealing some of these cuts, such as the reduction in reimbursement from Medicare Advantage plans, would benefit health providers including those in rural areas. The same goes for repeals of payments that compensate hospitals treating a disproportionate share of uninsured patients (“DSH” payments); however, while cuts to Medicare DSH payments have hurt some rural hospitals, such hospitals would be much more heavily impacted by the ACA’s planned reductions in Medicaid DSH payments, which have been delayed and therefore not yet felt by rural hospitals. 

Of note, the across-the-board 2-percent sequestration cut to Medicare payments, first passed into law in 2011, was not a part of the ACA and would not be undone merely by way of an ACA repeal. 

Value-Based Care

The ACA contained several initiatives aimed at tying providers’ payments to the quality of their care (Accountable Care Organizations; Hospital Value-Based Purchasing Program; Hospital-Acquired Condition Reduction Program, and more) and further directed CMS to test and implement new approaches to compensating providers in hopes of containing costs. Currently, the CMS Innovation Center administers dozens of programs in this “value-based” mold, and private payers have followed suit.

Repealing the ACA without immediately reinstating the statutory basis for these value-based programs would cause significant confusion and disarray in the provider community. While many providers would likely breathe a sigh of relief without the threat of penalties for readmissions and other quality measures, these programs have been widely adopted and their repeal would disrupt delivery and workflow changes and technological investments that providers have made since the ACA’s passage. 

340b Program

The 340b Drug-Pricing Program was enacted by Congress in 1992 to provide low-cost drugs to designated “social safety net” medical facilities in economically distressed areas of the country. A provision of the ACA expanded the 340b Program, causing 1,100 rural hospitals to become eligible to purchase low-cost drugs from drug companies. The expanded 340b Program was a windfall for many rural hospitals, especially when the typical rural hospital operates on small margins. An outright ACA repeal would eliminate these valuable cost-savings.  

Individual Mandate

An increase in insured patients is a benefit to all providers, including rural hospitals. Therefore, the repeal of the ACA’s “individual mandate,” requiring all taxpayers to purchase health insurance or else pay a penalty, will not help rural healthcare to the extent that it raises the uninsured rate. 

However, as discussed above, rural hospitals treat a higher percentage of Medicaid patients relative to urban hospitals, and a lower relative percentage of commercial-pay patients. This will limit the impact of changes to the individual marketplace on rural providers. 

The frustratingly limited benefit of the individual mandate on rural health is especially pronounced in states that have declined to expand Medicaid.  That is because the ACA was never redesigned to account for the optional Medicaid expansion; therefore subsidies for buying private insurance were never extended to patients who would otherwise have been covered under expanded Medicaid programs (a problem known as the “coverage gap”). 

Individuals falling in this coverage gap have incomes that exceed eligibility for Medicaid, but fall below the lowest income eligible for premium tax credits under the ACA. An estimated 2.5 million adults fall into this category. If the coverage gap had been closed through amendments to the ACA, rural providers in non-expansion states would be more affected by possible changes to the private insurance marketplace.  

Breaking Down Georgia's Rural Hospital Tax Credit Improvement Bills

Breaking Down Georgia's Rural Hospital Tax Credit Improvement Bills

Two bills introduced early in the Georgia legislature’s current session aim to raise tax credits for donations to rural hospitals. These bills are both modifications of the tax credit law passed last year.

A bill in the Ga. House of Representatives, HB 54, seeks to raise the tax credit from 70 percent to 90 percent for individuals and corporations who donate money to rural hospitals. HB 54 also includes language mandating that rural hospitals report to the state Department of Community Health any payments made to third-party consultants for attracting donations under the tax break. This provision presumably responds to concerns about outside consultants taking a large portion of donations that were intended to benefit rural hospitals; the consulting firm at the center of this criticism has said it will donate its profits to a foundation supporting rural healthcare.

The proposed Ga. Senate bill, SB 14, would allow certain individuals to recoup a dollar-for-dollar tax credit (i.e. 100 percent) up to $10,000, for donations made to rural hospitals. This dollar-for-dollar credit would be allowable if the individual is a member of an LLC, shareholder in an “S” corporation, or partner in a partnership, provided that the credit will “only be allowed for the portion of the income on which such tax was actually paid” by the individual.  

In 2016, the General Assembly passed the initial law establishing a tax credit at 70 percent for donations made to rural hospitals. Individual donors may claim 70 percent of their donation, or $2,500 per year, whichever is less, as a tax credit; while married donors filing jointly may claim 70 percent of their donation, or $5,000 per year, whichever is less. Corporations are allowed a tax credit worth up to 70 percent of their donation, or up to 75 percent of their income tax liability, whichever is less.

The tax credit has had a lukewarm reception, though. According to research by the Atlanta Journal-Constitution, only 136 taxpayers had submitted requests to the Department of Revenue for tax credits related to rural hospital donations as of January 13, 2017. These tax credits totaled $860,955 and represent less than 2 percent of what Georgia allocated in 2017 for the program. Lawmakers attribute the lack of donations to the 70 percent threshold providing insufficient incentive for taxpayers to donate.

The program follows a similar model from the education sector, the 2008 Private School Tax Credit Program. The Private School Tax Credit allows Georgia taxpayers to receive tax credits for donations made to Student Scholarship Organizations (SSOs), who then provide scholarships to parents of children who attend private schools, up to a certain maximum aggregate amount. In 2016, the $58 million in tax credits allocated for the Private School Tax Program were claimed in one day.

The Private School Tax Credit has a major difference from Georgia’s rural hospital tax credit: it is a dollar-for-dollar credit. Under the Private School Tax Credit, a person filing individually can donate and receive a tax credit for their Georgia income tax liability up to $1,000. For married tax payers filing jointly, the limit is $2,500. Similar to SB 14 amending the rural hospital tax credit, owners of pass-through entities, (LLCs, S-Corps, partnerships) may donate and receive a tax credit up to $10,000.

HB 54 is sponsored by the architect of the 2016 rural hospital tax credit, Rep. Geoff Duncan (R – Cumming), among others. Sen. Dean Burke (R – Bainbridge), who is chief medical officer at Bainbridge Memorial Hospital, is the lead sponsor of SB 14.

Previewing 2017 in Telehealth/ Telemedicine, and a 2016 Roundup

Previewing 2017 in Telehealth/ Telemedicine, and a 2016 Roundup

Despite the many unknowns facing the healthcare industry in 2017, the new year appears to offer at least one sure thing — telemedicine and telehealth (used interchangeably in this blog) will continue to experience growth and acceptance among patients, healthcare providers, and payers.

Rock Health, a research firm dedicated to digital health, released its annual survey in December 2016 on how patients use digital health services. The survey, which more than 4,000 patients across the United States completed, found that 22 percent of respondents utilized telemedicine at some point in 2016. This represents over a 200 percent increase in utilization of telemedicine compared to Rock Health’s 2015 survey, where only 7 percent of respondents utilized telemedicine. The survey also found that patients reported satisfaction rates above 75 percent across all telemedicine platforms.

Photo source: kaiserpermanente.org

Photo source: kaiserpermanente.org

In an eye-popping utilization study, Kaiser Permanente was reported to offer 52 percent of its total visits over the previous year via online portals, virtual visits or mobile health apps. Patients’ usage of telemedicine will likely continue to increase in 2017 due to reduced travel time, medical efficacy, affordability, and increased access to individual care facilitated by telemedicine.

Naturally, provider trends are mirroring this increased patient utilization. 2016 saw many significant partnerships between large health systems and telehealth companies of various sorts.  AmericanWell had an especially busy year, striking deals with New York Presbyterian, the Cleveland Clinic, Bon Secours (Md.), and Baptist Health South Florida, among others. Other 2016 partnerships included Teladoc’s affiliation with Hackensack Meridian Health (NJ) and endorsement from the American Hospital Association, Doctor on Demand’s link with Saint Francis Health System (Ok.), and, more locally, Spartanburg Regional Healthcare System’s adoption of MDLIVE and Piedmont Healthcare’s white-label partnership with Alii Healthcare. Already in 2017, Northwell Health (NY) has announced a partnership with Avizia.

Photo source: baptisthealth.net

Photo source: baptisthealth.net

State and federal legislatures and medical boards will also be busy with telemedicine policy in the coming year. The Federation of State Medical Boards (FSMB), a private, non-profit organization, announced in December 2016 that telemedicine is currently the most important medical regulatory topic to state medical boards. The survey respondents were asked to name issues and topics impacting their mission to protect public well-being. Approximately 75 percent of medical boards completing the survey identified telemedicine as an important regulatory issue. FSMB initiated the Interstate Medical Licensure Compact, an interstate licensing model that gained six states in 2016, bringing its total to 18. 

In 2016, at least seven state legislatures and/or medical boards passed laws governing the practice standards for telemedicine, including significant endorsements of physician-patient relationships established by telemedicine in Wisconsin and Missouri, and similar progress in Arkansas. State legislatures also took up telemedicine parity with Rhode Island becoming the latest state to pass a parity law, and New York grappling with “payment parity” after passing a coverage parity law in 2015. Last year also demonstrated how laws affecting telemedicine will come in a variety of shapes and sizes, as Indiana, Michigan, Georgia and others passed laws prohibiting online-only eye exams of the kind popularized by the company Opternative.

At the federal level, the recently passed 21st Century Cures Act, the ECHO Act, and expansion of telehealth services in TRICARE are directives from Congress that telehealth is being gradually phased into federally driven healthcare. CMS also continued to update its Medicare claims processing manual regarding telehealth in 2016.

Finally, telehealth will be a hot topic among employers and schools in 2017. US employers began to enthusiastically support telemedicine services in 2016. According to Mercer’s National Survey of Employer-Sponsored Health Plans, 59 percent of large employers covered telemedicine services in 2016 compared to the 30 percent of large employers who covered such services in 2015. With large health insurers partnering with telehealth technology companies (see below), this trend figures only to increase. Telemedicine is also becoming increasingly present in school settings, an exciting development with proven efficacy, and also a host of novel legal questions.  

Follow our blog and Twitter account for frequent updates regarding the state of telemedicine in 2017.

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

Telehealth Capsules - Federal Legislation

Telehealth Capsules - Federal Legislation

Telehealth to Expand in TRICARE; Shown as Viable Treatment Option for PTSD

The recently enacted National Defense Authorization Act for Fiscal Year 2017 will expand the use of telehealth in TRICARE, the federal healthcare program for military personnel and military retirees. Specifically, the law mandates coverage parity for telehealth services with conditions and reimbursement specifications to be defined in upcoming Department of Defense rules. An earlier version of the law contained broad interstate licensure exemptions, which have since been deleted following complaints by the American Academy of Family Physicians, among others.

TRICARE represents an exciting new adopter of telehealth parity, particularly in light of a recent study, to be published in the upcoming February 2017 issue of Behaviour Research and Therapy, showing therapy delivered via telehealth represents a viable treatment option for veterans with post-traumatic stress disorder (PTSD). The study compared the efficacy of home-delivered therapy by videoconference for veterans with PTSD to treatment received at a U.S. Veterans Affairs clinic, finding the home-delivered therapy to be just as effective to treatment at a U.S. VA clinic.  

The study placed veterans with PTSD into two randomly assigned groups. Each group received 10 to 12 therapy sessions to treat the symptoms of PTSD. One group attended therapy sessions at a Veterans Affairs clinic, while the other group consisted of veterans receiving home-delivered therapy via videoconference with a psychiatrist. Researchers found veterans who received home-delivered therapy made similar progress in treating PTSD symptoms as  veterans who received inpatient therapy at a Veterans Affairs clinic.

ECHO Act Signals Continued Commitment to Expansion of Telemedicine

On December 14, President Obama signed the Expanding Capacity for Health Outcomes Act (ECHO Act) into law. The legislation is modeled after University of New Mexico Health Sciences Center’s telehealth initiative “Project ECHO.” Project ECHO uses a “hub-and-spoke” model to connect healthcare specialists with rural healthcare providers and their patient populations using a telehealth platform. Healthcare specialists located at “hub” hospitals conduct virtual clinics and train primary care providers at “spoke” sites, typically located in rural areas. Through the virtual clinics and training, patients can receive care locally at a spoke site, avoiding costly referrals and the need for a patient to travel to the office of a healthcare specialist. 

The ECHO Act requires HHS to study technology-enabled collaborative learning and capacity building models, and the impact of such models on (1) mental and substance use disorders, chronic diseases, prenatal health, pediatric care, pain management, and palliative care; (2) healthcare workforce issues (e.g., shortage of healthcare specialists); (3) public health programs; and (4) delivery of healthcare to rural, medically underserved areas. Donald Berwick, the former administrator of CMS, has stated the model of Project Echo represents a fundamental design shift “from moving the patient to moving the knowledge,” a necessary shift to meet modern healthcare demands. 

The ECHO Act is the latest legislative effort to ensure quality healthcare services to rural communities through the utilization of telehealth. Telehealth will continue to be a point of legislation in upcoming years due to the efficacy and cost-savings associated with the technology.

 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. The information relies on limited authority and has not been screened or approved by any governmental agency. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

21st Century Cures Act: Implications for Telehealth, Mental Health, Rural Health

21st Century Cures Act: Implications for Telehealth, Mental Health, Rural Health

President Obama signed the 21st Century Cures Act (Cures Act) into law on Tuesday, December 13. The 966-page piece of legislation represents the largest reform of the U.S. health sector since the passage of the Affordable Care Act in 2010. The $6.3 billion bill makes reforms across the healthcare industry, including exploration of telehealth solutions, mental health and substance abuse reform, and provisions impacting rural healthcare providers.

Exploration of Telehealth Solutions

The Cures Act requires CMS and the Medicare Payment Advisory Commission (MedPAC) to create a report for Congress detailing current and potential uses of telehealth for Medicare beneficiaries. Specifically, the bill tasks CMS and MedPAC with gathering and analyzing data for Congress to make an informed decision on the potential of telehealth to improve patient care for Medicare recipients and the associated financial costs.

Though the Cures Act will not immediately impact Medicare’s approach to telehealth, the legislation signals Congress’ commitment to exploring telehealth’s potential of lowering costs of healthcare delivery, while simultaneously providing better quality patient care.

Mental Health and Substance Abuse Reform

A major portion of the Cures Act relates to mental health and substance abuse disorders. The final version of the Cures Act incorporates provisions from the Senate’s Mental Health Reform Act of 2016 and the House’s Helping Families in Mental Health Crisis Act of 2016. Mental health reforms found in the Cures Act include a directive for increased cooperation among federal agencies in combating mental health, funding to develop evidence-based models to treat mental health, and a dictate to ensure parity in terms of reimbursement for mental health treatment.

Since requiring parity in for mental health reimbursement with the enactment of the Mental Health Parity and Addiction Equity Act of 2008, concerns have been raised whether parity is being achieved. To address these concerns, the Cures Act includes requirements that the Department of Human and Health Services (HHS), the U.S. Department of the Treasury, and the U.S. Department of Labor (DOL) develop compliance guidance with detailed examples for health plans to ensure parity is met for mental health reimbursement. Recognizing the impact of substance abuse and the opioid abuse epidemic, especially in rural America, the Cures Act places $1 billion over two years in a fund to directly award grants to states in their efforts to combat opioid abuse.

Impacts on Rural Healthcare Providers

Several provisions of the Cures Act relate directly to rural healthcare providers. The Cures Act bars CMS from enforcing direct physician supervision requirements for outpatient therapeutic services obtained in Critical Access Hospitals (CAHs) and small rural hospitals (hospitals located in rural areas with less than 100 beds) through the end of 2016. The direct supervision requirements for outpatient therapy services were changed by CMS in 2009 for all hospitals, requiring either a physician or a non-physician healthcare provider directly supervise when Medicare beneficiaries receive outpatient therapies. The regulation has been met with considerable criticism from rural healthcare providers for being impractical and failing to account for the realities of staffing rural healthcare facilities. Though 2016 is almost over, the provision is noteworthy if a hospital becomes the subject of a CMS supervision-related action for an event that occurred during calendar year 2016.

In addition, the Cures Act extends the Rural Community Hospital Demonstration Program through the end of calendar year 2021 while expanding the program to new states. The Rural Community Hospital Demonstration Program provides Medicare cost-based reimbursement to certain small rural hospitals that fail to qualify for cost-based reimbursement under a CAH designation. Applications for the program were previously limited to rural hospitals located in the twenty least densely populated states in the country. The Cures Act changes this requirement and the program application to is now open a select number of hospitals located in any state.

 

How Tom Price's Obamacare Replacement Plan Might Look

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How Tom Price's Obamacare Replacement Plan Might Look

President-elect Donald Trump’s reported selection of U.S. Representative Tom Price (R- Ga.) for Health and Human Services Secretary may indicate how the president-elect plans to fulfill his campaign promise of dismantling the Affordable Care Act. A leading critic of “Obamacare,” Rep. Price has introduced legislation during every Congress since 2009 to repeal the President Obama’s sweeping healthcare reform law.

The following are some key provisions of Rep. Price’s Empowering Patients First Act, the latest of his Obamacare replacement plans:

1)  Coverage Mandates. By its express terms, Empowering Patients does not “provide a mandate for guaranteed issue or community rating in the private insurance market.” Therefore, two of the ACA’s strongest controls on insurers’ actuarial behaviors would revert to their pre-ACA state of deregulation.

However, Empowering Patients would maintain a form of prohibition on preexisting condition exclusions. The law would prevent denials of coverage to certain individuals based on preexisting conditions so long as those individuals have maintained “continuous coverage” for at least 18 months prior to the date of enrollment. If a person has a lapse in insurance coverage, insurers may be allowed to deny coverage or charge up to 150 percent of the standard premium for two years under the continuous-coverage provision.

As for consumer mandates, Empowering Patients would remove the so-called “individual mandate” requiring patients to obtain insurance or else pay a tax penalty.

2)  Essential Health Benefits. Empowering Patients eliminates the essential health benefits package mandated by Obamacare, which required insurers to cover a set of 10 different types of care under all insurance plans. Empowering Patients would allow insurers to cut whatever benefits they no longer wish to cover.

3)  Tax Credits. Like Obamacare, Empowering Patients would extend annual tax credits to individuals purchasing private health insurance. However, how tax credits are structured under Empowering Patients is very different than under Obamacare. Obamacare’s tax credits are based upon income, with individuals who earn less getting more assistance. Empowering Patients bases annual tax credits only upon age, providing greater help to individuals who are older. The annual tax credits proposed by Empowering Patients are as follows:

a.   $900 for children under 18

b.   $1,200 for those between 18 and 35

c.   $2,100 for those between 36 and 50

d.   $3,000 for those 51 and older

4)  Medicaid Expansion. Simply put, Empowering Patients promises to undo the Medicaid expansion initiated by Obamacare. Unlike other alternatives to Obamacare, such as Rep. Paul Ryan’s ‘Better Way Plan,’ which allow states to continue operating currently expanded programs albeit with quickly diminishing federal support, Empowering Patients does not offer an alternative to the Medicaid expansion. People previously covered by the Medicaid expansion, if removed from their states’ Medicaid rolls, would be eligible for the age-based tax credits listed above if electing to purchase coverage through the private marketplace under Empowering Patients. 

5)    Employer-Based Insurance Limits. Empowering Patients would also impact employer-sponsored insurance. Empowering Patients proposes limiting employer-tax exclusions for insurance to $20,000 for a family and $8,000 for an individual. Any additional funds above those amounts would be treated as taxable dollars.

6)    New Provisions. Among Rep. Price’s proposals not directly tied to Obamacare are an emphasis on health savings accounts to allow for tax-deductible contributions to special accounts reserved for healthcare expenses; new laws aimed at allowing insurers to sell their products across state lines; medical malpractice reform aimed at changing the burden of proof in malpractice cases; and various provisions allowing beneficiaries under public programs (Medicare, VA, etc.) to seek coverage in the private marketplace.

Empowering Patients contains scant mention of the ACA’s innovation models that have steered federal reimbursement away from fee-from-service and toward quality-based care. However, in September 2016, Rep. Price co-authored a letter to CMS challenging the agency’s authority to enact certain mandatory programs under its Center for Innovation.

As HHS Secretary, Price can impact health reform through the regulatory process, but legislation is ultimately required to replace Obamacare. Price’s detailed Empowering Patients proposal will likely provide a framework for Congressional Republicans as they draft an alternative to Obamacare in the coming months.

 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. The information relies on limited authority and has not been screened or approved by any governmental agency. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

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Task Force Unveils Proposals for Georgia’s Uninsured

Task Force Unveils Proposals for Georgia’s Uninsured

The Georgia Chamber of Commerce’s Healthcare Access Task Force released a proposal Wednesday to combat Georgia’s high uninsured population. 

The plan provides three different tracks for Georgia legislators to consider, none of which expand Medicaid to the full extent provided by the Affordable Care Act. However, each proposal would substantially reduce Georgia’s uninsured rate, which hovers around 6 percentage points higher than the national average — 48th-ranked in the U.S. 

The three proposed plans are as follows:

1) Close the Coverage Gap. One of the great absurdities of the mangled ACA is that states declining to expand Medicaid cannot even promise low-income citizens subsidies in the private insurance market because some are too poor to qualify. The subsidies originally were intended for non-Medicaid recipients, so they the federal government cuts them off at 100 percent of the poverty line. This leaves a “coverage gap” in non-expansion states, where a person’s income could be too high for Medicaid but too low for subsidies. The task force’s first proposal would close this gap by expanding Medicaid to childless adults up to 100 percent of the federal poverty level (“FPL”) ($11,880 for an individual in 2016). 

2) Medicaid Expansion Reworked. The task force’s second option uses Georgia’s Medicaid CMOs to expand eligibility up to 138 percent of the FPL — the income threshold called for under the ACA. However, because this model would contain elements unlike the traditional Medicaid expansion, such as cost-sharing by beneficiaries, Georgia would still have to petition the federal government for approval of the model as a “waiver.” 

3) Public/Private Hybrid. The third option would use Medicaid CMOs to insure those up to 100 percent of the FPL, but would use private qualified health plans, paid for by Medicaid with some cost-sharing, to cover the population between 100 and 138 percent of the FPL. 

Georgia Health News reports that the task force will release enrollment estimates or savings projections tied to each plan later this year. 

 

 

News Capsules - July '16

News Capsules - July '16

Transparency of Hospital Records in Question 

Georgia Health News ran a thorough recap earlier this week of an evolving issue regarding the privacy of hospital records in Georgia. Specifically, the issue relates to the "open records" status of business and financial documents at private Georgia hospitals that have converted from public hospital authorities.

The Georgia Court of Appeals held in late March, in the case of Smith v. Northside Hospital, inc., that Northside Hospital did not have to disclose certain records as the long-term lessee of the Fulton County Hospital Authority. The Georgia Supreme Court is expected to decide soon whether to hear the case, GHN reports. 

The law at the center of the dispute is the Georgia Open Records Act, O.C.G.A. § 50-18-70. This law requires hospital authorities to disclose many records that would be confidential in a private context, and has been extended in the past to private, nonprofit hospitals converted from hospital authorities. However, the Court of Appeals distinguished Northside’s case from these past rulings because, among other things, 1) Northside’s contract with the hospital authority does not  provide for Northside to act on behalf of the authority to the same extent as other hospital authority conversions, and 2) the specific records sought related to private transactions in which the hospital authority board played no role. 

While the Court of Appeals ruling is limited to the specific facts of the case, if affirmed it would almost certainly lead to an increase in open records denials by Georgia’s many converted hospital authorities. 

CMS Proposed Rule Has Huge Ramifications for Hospital Outpatient Departments

Last week’s CMS proposed rule regarding the Hospital Outpatient Prospective Payment System (OPPS) contained a significant proposal to change the way hospitals bill for outpatient procedures in off-campus “provider-based” departments. 

Finding that the current practice of coupling facility payments (made under OPPS) with professional payments under the physician fee schedule (MPFS) contributes to higher charges to CMS and to patients, the proposed rule would shift all such payments to the MPFS for 2017 while the agency “explore[s] operational changes” to compensate hospitals under a new system (likely not OPPS) in 2018 and beyond. 

Off-campus provider-based departments that were billing CMS before November 2, 2015, might be allowed to continue billing under OPPS, but their ability to expand or relocate services would be limited. 

CMS will accept comments on the proposed rule until September 6. 

Arkansas Telemedicine Rules Suffer Unexpected Defeat

Arkansas’s recently proposed telemedicine rules, aimed at undoing the requirement of an in-person examination before a telemedicine visit, failed in committee Monday. Despite the Arkansas Medical Board’s recommending the rules this spring, the legislative committees were concerned that a last-minute amendment to the draft rules had changed various stakeholders’ views after the public comment period had closed, according to the Arkansas Democrat-Gazette. The amendment related to the definition of “store and forward technology.”

If the Board and the legislature can agree on a new set of rules, Arkansas would take a critical step forward from its current “failing” position, according to the American Telemedicine Association, as one of only two states to prohibit telemedicine encounters without a preceding in-person examination. 

 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. The information relies on limited authority and has not been screened or approved by any governmental agency. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

Proposed 2017 Physician Fee Schedule Includes Telehealth Changes

Proposed 2017 Physician Fee Schedule Includes Telehealth Changes

Yesterday CMS released its proposed changes to the Medicare Physician Fee Schedule for Calendar Year 2017, which include several provisions related to telehealth.

First, CMS proposes to expand on Medicare's reimbursable tele-nephrology codes by adding three “per-day” end-stage renal disease CPT codes, 90967-90970. It also proposed making reimbursable two advance care planning codes (99497-99498) and creating new G-codes for critical care consultations, GTTT1 and GTTT2, valued at work RVUs of 4.0 and 3.86 respectively. 

CMS declined to add codes related to observation care, emergency department visits, psychological testing, physical and occupational therapy, and speech language pathology. 

Finally, CMS is proposing to introduce a telehealth place of service (POS) code to clarify that distant-site physicians should use the POS code of the patient's location, not their own. The proposed telehealth POS code would be paid using facility PE RVUs. 

Comments on the proposed rule must be submitted by September 6, 2016.