1 / 26

Mike Lane Director, Health Care Finance Policy

State & Federal Legislative Update Keystone AAHAM March 13, 2013. Mike Lane Director, Health Care Finance Policy The Hospital & Healthsystem Association of Pennsylvania. Overview. Hospital Trends State Environment Governor’s 2013-14 Budget HAP Legislative Issues

Download Presentation

Mike Lane Director, Health Care Finance Policy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. State & Federal Legislative Update Keystone AAHAM March 13, 2013 Mike Lane Director, Health Care Finance Policy The Hospital & Healthsystem Association of Pennsylvania

  2. Overview • Hospital Trends • State Environment • Governor’s 2013-14 Budget • HAP Legislative Issues • Reauthorize MA Modernization • Medicaid Expansion • Insurance Exchanges • Hospital Licensure—H.B. 1570 • Nurse Staffing—H.B. 1880 • Act 94—S.B. 1358 • Medical Liability/Mcare • Act 55 • Federal Environment • Debt Ceiling & Sequester • Federal Budget • ACA Implementation 2

  3. Licensed Hospitals in Pennsylvania • Admitted more than 1.6 million people; treated nearly 39 million people in an outpatient setting; evaluated 6.0 million people in their emergency departments; and delivered more than 128,000 babies. • Provided nearly 267,000 full‐ and part‐time jobs, and contributed to the economic vitality of their communities, in that they created more than 317,000 additional jobs statewide. • Contributed $98.9 billion to the state’s economy (total annual direct and ripple effect). • Advanced quality and patient safety—a Department of Health report showed that infection rates in Pennsylvania’s hospitals were lower than elsewhere in the country. • Provided $990 million in uncompensated care, reflecting the impact of the growing numbers of uninsured. 3

  4. Pennsylvania Hospital Trends • Fewer acute care hospitals (-11%), and more specialty hospitals (+14%). • Fewer acute care hospital beds (-13%). • Fewer inpatient admissions (-3%). • Shorter acute care lengths of stay (-2%). • More emergency department visits (+17%). • More community hospitals closing obstetrical services (44). • Growing shortage of physicians. • One of every four physicians in practice is over the age of 60. • One of every five physicians in practice is under the age of 40. 4 Source: Pennsylvania Department of Health, 2002-2011

  5. Trend in Uncompensated Care 46% increase over 5 years 5 Source: HAP analysis of PHC4 data.

  6. State Environment

  7. Governor’s 2013 “To Do” List • 2013-2014 State Budget • Health Care (Provider Assessment) • Pension Reform • Economic Development • Transportation • Privatization of Liquor Stores • Insurance Reform (Act 94) 7

  8. Governor’s 2013 Budget Priorities • $28.4 Billion spending plan. • $1.8 Billion investment in transportation. • Uncapping the oil company franchise tax. • Level funding for higher education. • $90 Million increase in K-12 education. • Three (3) new state police cadet classes. • Privatize liquor stores. • Reform public pension program. 8

  9. HAP2013 State Priorities • Medical Assistance • Reauthorization of Quality Care Assessment • 2013-2014 State Budget • Affordable Care Act Implementation • Medicaid Expansion • Insurance Exchange • Other: • Institutions of Purely Public Charity; Medical Liability; Hospital Licensure • Advanced Practice Professionals – BH Setting • PSR/UR Process – Removing barriers 9

  10. 2013-2014 Total Operating Budget Total Funds – $66.7 Billion 10 Source: DPW Budget Overview, 2-5-13

  11. 2013-2014 General Fund Budget Total Funds – $28.4 Billion 11 Source: DPW Budget Overview, 2-5-13

  12. 2013-2014 General Fund Revenue Sources Nearly three-quarters (72%) of General Fund revenues come from the PIT and Sales & Use tax. 12 Source: DPW Budget Overview, 2-5-13

  13. Federal Environment

  14. Overview • Debt Ceiling • Sequester • 2012-2013 Federal Budget • 2013-2014 Federal Budget • ACA Implementation • Sustainable Growth Rate (SGR) 19

  15. How Did We Get Here? 2011 2012 • Congress and the President agree to raise the debt ceiling. • Every dollar debt ceiling increase must equal amount of deficit reduction. • Super Committee formed (sequestration). • We hit the debt ceiling. • Payroll Tax Extension expired. • Hospital extenders expired. • Bush/Obama tax cuts expired. • So . . . • Debt ceiling raised again by passing the American Tax Relief Act (ATRA) and extended • all of the above. • President signed temporary Payroll Tax Cut Extension. • Temporary hospital extenders passed. • Congress passed the Middle Class Tax Relief and Job Creation Act of 2012. 21

  16. What Lies Ahead? 2013 • Continuing Resolution expires. Sequestration begins. • We will AGAIN hit the debt ceiling. 22

  17. American Tax Payer Relief Act (ATRA) of 2012 • Passed January 1, 2013 to avert the “Fiscal Cliff.” • Made Bush-era tax cuts permanent for most Americans. • Delayed by two months, across-the-board cuts to defense and domestic spending. • Postponed for one year the expected 27% cut in Medicare physician payments. • Adopted two key hospital extenders supported by HAP. • Positive provisions were offset in part by Medicare payment cuts to hospitals and • other health care providers. 23

  18. American Tax Payer Relief Act (ATRA) of 2012 • Key Provisions – Hospital Extenders: • Delays for two months the sequester of both domestic and defense spending that was set to begin January 3, 2013. The sequester reduces Medicare payments to providers by 2%. (PA hospital impact: $25 million) • Replaces the 27% cut in payment to physicians for Medicare services with 0% for 2013. (PA impact: $930 million) • Extends the Medicare Dependent Hospital program from October 1, 2012, to October 1, 2013. (PA hospital impact: $16.7 million) • Extends the Low Volume Adjustment payment from October 1, 2012, to October 2013. (PA hospital impact: $6.7 million) • Extends ambulance add-on payments. 24

  19. American Tax Payer Relief Act (ATRA) of 2012 • Key Provisions – Hospital Reductions: • Coding adjustment as a result of the transition to Medicare Severity Diagnosis Related Groups. (PA hospital impact: $450 million) • Extension of the Medicaid disproportionate share hospital reductions for an additional year. (PA preliminary estimated impact: $277 million) • Extension of hospital outpatient therapy caps from January 1, to December 31, 2013. (PA impact unknown) 25

  20. Impact of Sequestration of Medicare Spending1 Budget Control Act (BCA) of 2011 1Utilizing baseline spending by sector affected by Medicare payments. Sectors are: hospital IP and OP care, SNF, physician offices, home health, prescription drugs, insurance administrative component of Medicare Advantage, and other services which include hospice, DME, ambulance, lab services, Part B prescription drugs and other services. 2Reflects 2% reductions (sequester) of Medicare fee-for-service (FFS) hospital payments only. Additional cuts will impact hospitals under Medicare Advantage (managed care). Source: “The Negative Employment Impacts of the Medicare Cuts in the Budget Control Act of 2011,” Tripp Umbach for the American Hospital Association (AHA), American Medical Association (AMA), and American Nurses Association (ANA), September 2012 26

  21. More Deficit Reduction Options • Medicaid ($100 billion) • Provider taxes/assessments • Blending rates/FMAP • Medicare • IME ($14 billion) • Bad Debt ($14–26 billion) • Rural adjustment cuts ($14–16 billion) • Post-acute care services ($50 billion) • Medicare IPPS coding adjustments ($4 billion) • Expansion of IPAB • Other • Increase retirement age ($125 billion) • Means-testing ($38 billion) • Reform and increase copayments for Part A & B ($110 billion) • Medigap restrictions ($53 billion) • Home health copayments ($40 billion) • SNF copayments ($50 billion) 30

  22. March 1Sequester • March 27Continuing Resolution • Budget Resolution • Other “Noise” • Guns • Immigration Looking Ahead . . . 31

  23. What are the challenges? • Forces Increasing Costs • Labor • Life-saving technology/Rx • Older, sicker patients • Redundant regulation • Liability insurance • Information technology • Emergency readiness • Forces Decreasing Revenue • Government underpayment • Private payer pressure • New payment penalties (VBP) • Uninsured and under-insured 32

  24. 33

  25. Supreme Court ruled 5 – 4 • Commerce Clause out – • Constitutional under Tax Clause. • Insurance Exchanges • Medicaid Expansion • Governor Corbett “Pennsylvania May Opt-Out.” • Conservative estimate predicts additional 482,000 would be eligible for Medicaid1 at 138% of FPL. Status of ACA 1Kaiser Commission on Medicaid & The Uninsured, Medicaid Coverage and Spending in Health Reform: National and State-by-State Results for Adults at or Below 133% FPL,” May 2010. 34

  26. Questions/Discussion The Hospital & Healthsystem Association of Pennsylvania March 2013 36

More Related