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Missouri Health Care Executive Assistants Conference. May 4, 2012. Agenda. Defining the “New Normal” Key issues. Overview: Market Changes. Realignment of capital investments Constrained reimbursement levels Passive payers transitioning to active purchasers Cost pressures

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Presentation Transcript
  • Defining the “New Normal”
  • Key issues
overview market changes
Overview: Market Changes
  • Realignment of capital investments
  • Constrained reimbursement levels
  • Passive payers transitioning to active purchasers
  • Cost pressures
  • Market consolidation
  • Growth in physician employment
  • New coverage through insurance exchanges and Medicaid
  • Workforce shortages
how do we cut costs
How Do We “Cut Costs”?

Employer Reduce benefits

Family Add covered services

President Obama Subsidize premiums

Rep. Ryan Limit contribution to coverage

Medicaid Reduce provider payment rates

Doctor Reduce overhead

Insurer Remove high costs from pool

Hospital Close the psych. unit, market the cath. lab

premiums for family coverage by state 2010
Premiums for Family Coverage, by State, 2010


Source: The Commonwealth Fund – November 17, 2011

employer premiums as percentage of median household income for under 65 population 2003 and 2010
Employer Premiums as Percentage of Median Household Income for Under-65 Population, 2003 and 2010

62 percent of under-65 population live where premiums

are 20 percent or more of income

Source: The Commonwealth Fund – November 17, 2011


Source: Estes Park Institute

Survey of hospital executives, trustees and physicians

Sept. 2011

reform archetypes
Reform Archetypes

Send It Back

Active Implementers

Passive Aggressive

On Hold

Source: Ian Morrison

Layout: Matt Williams

states suing federal government over health bill as of 4 5 11
States Suing Federal Government Over Health Bill (as of 4/5/11)

State has filed suit (27 states)

Suit filed by state official, not on behalf of state

Source: Matt Williams

legislative topics
Legislative Topics
  • Federal budget related to provider taxes
  • State Issues
    • Medicaid Appropriations
    • Enrollment of Newly Insured
    • State Health Insurance Exchange
    • Certificate of Need
    • Hospital Licensure Reform
    • Prompt Credentialing By Insurers
    • Expansion of Medicaid Managed Care
    • Scope of Practice
    • Conscience Clause
    • Poison Control Center
    • Rx Monitoring
  • Medical Liability
provider tax reductions in the president s proposed budget
Provider Tax Reductions in the President’s Proposed Budget
  • Phase-down of the maximum provider tax rate
    • 6 percent in 2014
    • 4.5 percent in 2015
    • 4 percent in 2016
    • 3.5 percent in 2017
  • MHA continues to collaborate with other states, the Missouri congressional delegation and the governor and legislative leaders to block this.
Impact of Tax CapReport by Department of Health Management and Informatics, School of Medicine, University of Missouri
  • Reduction of $2.4 billion in federal matching funds for SFY 2015-2018
  • Estimates that a $2.4 billion reduction in federal revenue would increase health care premiums by $715 per privately insured individual by SFY 2018
  • Job loss associated with reduction in the hospital sector could be 16,479
  • Medicaid coverage could decrease by 199,790 by 2018.
medicaid appropriations
Medicaid Appropriations
  • In January, staff offered three membership telephone conferences to review the governor’s proposed budget for SFY 2013, which included:
    • savings from various “efficiencies”
    • no eligibility or benefit reductions
    • a focus on a $500 million revenue shortfall from the lapsing of federal stimulus funds and a $100 million FMAP decline
  • The lower FMAP adds $30 million in state cost for the same level of Medicaid hospital services
30 million shortfall from fmap change
$30 Million Shortfall From FMAP Change
  • Limits on early elective childbirth
  • Curtailing unnecessary ED use
  • Medicaid RAC focus and standards
  • Medicaid liens and expanded dispute resolution
  • Organ procurement efficiency and effectiveness

Federal Reimbursement Allowance

the proposed medicaid budget
The Proposed Medicaid Budget
  • Other components of the $191 million in General Revenue savings in Medicaid included:
    • $36.7 million in managed care efficiencies
    • $29.5 million from new generic drugs
    • $51.5 million more in pharmacy rebates
    • $4.6 million in General Revenue savings from the Medicaid health homes demonstration
demands on the medicaid enrollment system
Demands on the Medicaid Enrollment System
  • A new MHA report finds that 386,000 Missourians will become eligible to enroll in Medicaid in 2014 if the federal health reform law is implemented as written.
  • The state’s eligibility determination system and IT infrastructure is obsolete and entirely inadequate to the task.
  • Federal funding is available to help states fund upgrades in their eligibility determination systems.
changes in coverage under aca population age 65 2016
Changes in Coverage under ACAPopulation < Age 65, 2016

Source: Congressional Budget Office March 18, 2011 (updates original CBO estimate of March 20, 2010 without substantial change)/Health Policy Alternatives

changes in coverage under aca population age 65 20161
Changes in Coverage under ACAPopulation < Age 65, 2016


- 32 million

Exchange: +22 million (18 million w/subsidy)


+16 million

Source: Congressional Budget Office March 18, 2011 (updates original CBO estimate of March 20, 2010 without substantial change)/ Health Policy Alternatives

changes in coverage under aca for missouri population age 651
Changes in Coverage under ACAfor Missouri Population < Age 65



Exchange: Employers 113,000

Non-group 231,000

Medicaid: +410,000

Source: Urban Institute Analysis


Current Medicaid Beneficiaries and Newly Eligible in 2014** Ages 0-64

Current Medicaid Beneficiaries Ages 0-64

state health insurance exchange
State Health Insurance Exchange
  • State health insurance exchange formation
    • The Senate has passed a bill to prevent the executive branch’s creation of a state health insurance exchange under PPACA without specific legislative or voter authorization. It would be on the November ballot for approval.
    • There has been no legislative action to create a state health insurance exchange.
    • The MHA board and FRA Long-Range Planning Committee will be exploring exchange issues.
certificate of need legislation
Certificate of Need Legislation
  • Legislation to repeal/revise certificate of need review of construction of a new hospital has been filed but not given a hearing.
  • A legislative proposal to create a quasi-judicial review process may be debated by the state Senate. Its new review standards favor approval of CON applications.
hospital licensure reform
Hospital Licensure Reform
  • MHA-sponsored bills to revamp hospital licensure processes and standards have been unanimously approved by a Senate committee and the full House of Representatives.
  • The impediment to passage is a Senate opponent and his allies.
  • The bill narrows the focus of state complaint investigations, requires surveyors to cite written standards and promotes consistency with CMS.
prompt credentialing by insurers
Prompt Credentialing by Insurers
  • MHA is in a coalition of providers working to address concerns about insurers’ delays in credentialing physicians.
  • The coalition proposal creates new deadlines for insurer review and also establishes a mechanism for physicians to be paid out-of-network rates while the credentialing application is pending.
  • Bills are under consideration in both the House and Senate.
expansion of medicaid managed care
Expansion of Medicaid Managed Care
  • Legislators are not considering statutory or budget proposals to expand Medicaid managed care to new regions or populations for SFY 2013.
  • A prime proponent of expansion, Centene, has become a vendor in all managed care regions.
  • The number of contracted plans is shrinking as of July 1, 2012.
  • Medicaid’s leadership is favorably disposed towards managed care.
scope of practice bills
Scope of Practice Bills
  • Physicians and CRNAs are battling over who may perform various pain management procedures, including spinal injections. MHA is heavily engaged in the debate.
  • Nursing interests are proposing to authorize advanced practice registered nurses and CRNAs to practice with little if any oversight by physicians. MHA has supported more focused expansions of practice for APRNs but is not promoting this sweeping expansion.
conscience clause protections
“Conscience Clause” Protections
  • Broad conscience clause protections for all types of health care practitioners and employees are being considered.
  • The original versions would protect whatever an employee decides offends his or her conscience, with no requirement for prior notification of employers. The bills creates new employer liability and other penalties.
  • The bills have been somewhat narrowed in scope, but continue to raise serious concerns.
prescription drug monitoring and contracts to treat state prisoners
Prescription Drug Monitoring and Contracts to Treat State Prisoners
  • MHA has successfully amended legislation to narrow and clarify hospitals’ role in a new state system for tracking the dispensing of prescription drugs.
  • Correctional Medical Services, the state’s vendor of medical care for prisoners, is reviving an amendment to force hospitals to contract with them, with payment rates at the greater of Medicaid or Medicare.

Thank You