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.