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The Federal The Federal Landscape for Landscape for

Rural Health Care Leadership Conference

ppRural and CAHsRural and CAHs

John Supplitt, Sr. Director, AHAJohn Supplitt, Sr. Director, AHA

Agenda

•• Political EnvironmentPolitical Environment•• AHA Advocacy AgendaAHA Advocacy Agendad ocacy ge dad ocacy ge da•• Regulatory EnvironmentRegulatory Environment•• Health Care ReformHealth Care Reform•• Beyond ReformBeyond Reform

PoliticalPoliticalPolitical Political EnvironmentEnvironment

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The Total Deficit or Surplus - January 2010(percent of the gross domestic product)

Deficit Reduction

Projected Growth of the U.S. Economy and Federal Spending for Major Mandatory Programs – January 2008

Entitlement Reforms

HI Trust Fund Balance at Beginning of Yearas a Percentage of Annual Expenditures

The HI Trust Fund

May, 2009

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Health Insurance CoverageHealth Insurance Coverage in the United States: 2008U.S. Census Bureau

Sept. 09

Health for Life

Health for Life1. Health Coverage for All, Paid for by All: Protecting and

expanding coverage, as well as ensuring access to care, is an essential element of reform. It is also a key to controlling costs, as health care costs are higher when patients do not receive care at the right time or in the right setting.

2. Focus on Wellness: America has a “sick care” system rather than a “health care” system. In order to improve health and healthcare, we must rebalance our system to focus more on prevention and wellness.

3. The Most Efficient, Affordable Care: The cost of insurance and the cost of health care need to be reduced. We need to better manage chronic disease; spend limited resources on care, not paperwork; address the growing shortage of well-trained health care workers; and make useful information on quality and pricing available to the public.

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Health for Life (cont.)4. The Highest Quality Care: Health for Life calls for the

development and use of best practices, coordination between the treatment of physical and behavioral health needs, rewarding care outcomes, make end-of-life care more available, and ensure we have the proper workforce.

5. The Best Information: Health for Life calls for accelerating the adoption of health IT by addressing current financialthe adoption of health IT by addressing current financial, regulatory and technological barriers, including the lack of interoperability and standardization across IT vendors.

Rural Hospital Rural Hospital Advocacy Advocacy

Agenda 2010Agenda 2010

Medicare Improvements for Patients and Providers Act of 2008

July 15, 2008, to extend expiring provisions under the Medicare Program and to maintain access to care in rural areas…

MIPPA – PL 110-275

• Extends FLEX program grants thru 9/30/2010

• Authorized appropriations for FY 2010-12 to establish a demo for development and testing of new community health integration models in frontier states

• Extends 508 reclassifications thru 9/30/2009

• Extension of floor on Medicare work geographic adjustment under the Medicare physician fee schedule thru January 1, 2010

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Medicare Improvements for Patients and Providers Act of 2008

• Extends direct billing for physician pathology services by independent labs thru 9/30/2009

• Extends payments for ground ambulance services and for air amb lance ser ices nder the amb lance fee sched le

MIPPA – PL 110-275 (cont.)

air ambulance services under the ambulance fee schedule after July 1, 2008, and before January 1, 2010

• Extends and expands OPPS hold harmless for small, rural hospitals and SCHs under 100 beds thru 12/31/2009.

Senate Health Reform Bill• Floor on Medicare Work Geographic

Adjustment

• Increased Payments for Ambulance Services

HR 3590 - Medicare Extenders

Services

• Section 508 hospital reclassifications

• Outpatient hold harmless provision

• Payment for technical component of certain physician pathology services

More Extenders/Rural Protections

• Reinstates reasonable cost reimbursement for clinical diagnostic lab services

• Extends the RCH Demonstration Program• Extends the Medicare-dependent hospital program• Medicare inpatient hospital payment adjustment for

low-volume hospitalsp• Technical correction related to CAH• Extension of Medicare rural hospital FLEX program• Improves the demo project on community health

integration models• MedPAC study• Payment adjustments for home health care

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Equitable Treatment for Rural Safety-Net Providers includes several special programs including:• PPS for ambulatory care providers• Family nurse practitioner training program grants• Community-based collaborative care networks• Early detection of certain medical conditions

More Rural Protections – Senate

Early detection of certain medical conditions funding

• Creation of a payment floor

Rural health clinics, FQHC look-alike clinics, and Indian health clinics also should be eligible for these programs.

Wage Index - The Senate bill contains two provisions:

1. Requires the Secretary to use, until FY 2014, the area wage index reclassification thresholds of the average hourly wage that were in effect prior to FY 2009

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More Rural Protections – Senate

2. Requires the Secretary to apply budget neutrality on a national basis in the calculation of the Medicare hospital wage index floor for each all-urban and rural state.

The Manager’s Amendment introduced new protections for frontier states with a floor on the area wage index not less than 1.00.

Workforce• National health care workforce commission• Expanding access to primary care services

and general surgery services• Distribution of additional residency positions

Senate Bill

Distribution of additional residency positions• Increasing teaching capacity

IRS• Additional requirements for charitable

Section 501(c)(3) hospitals

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HOUSE: Discount for Rural and Other Hospitals;340B Program Integrity

Sec. 2501. Expanded participation in 340B programSec. 2502. Improvements to 340B program integritySec. 2503. Effective date

340 B Drug Discount Pricing

SENATE: More Affordable Medicines for Childrenand Underserved Communities

Sec. 7101. Expanded participation in 340B programSec. 7102. Improvements to 340B program integritySec. 7103. GAO study to make recommendations on

improving the 340B program

Select Major Provisions in Senate Bill (HR 3590)Sec. 3001: Hospital Value-Based PurchasingSec. 3023: National Pilot Program on Payment

Bundling: study and report on application of pilot program to small or

l h it l

Patient Protection & Affordable Care Act

rural hospitalsSec. 3025: Hospital Readmissions Reduction

Program. (CAHs exempt in Senate but not House)

Sec. 3403: Independent Medicare Advisory Board

RegulatoryRegulatoryRegulatory Regulatory EnvironmentEnvironment

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Regulatory Red Flags

1. Physician Supervision

2. CRNA Pass Through/Stand-by

3 Meaningful Use/EHR3. Meaningful Use/EHR Standards

4. Recovery Audit Contractors

5. Expired Extenders

Physician Supervision

OPPS Final Rule• For ALL outpatient therapeutic services, direct

supervision by a physician or NPP must be provided.• On-campus then anywhere, immediately

available• Off-campus then in the OPD, throughout

procedure• For outpatient diagnostic services follow

physician supervision requirements per fee schedule

• CAHs are NOT subject to diagnostic rule

The Administrator finds that the Board’s The Administrator finds that the Board’s decision was improper. Accordingly, the decision was improper. Accordingly, the Administrator reverses the Board’s Administrator reverses the Board’s

CRNA Standby Costs

decision in this case.decision in this case.Michelle SnyderMichelle SnyderActing Deputy AdministratorActing Deputy Administrator

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Durbin Amendment #3077

• CMS has denied “pass-through” payment for the CRNA services of certain CAHs reclassified from rural to urban and as being

CRNA Payment

reclassified from rural to urban and as being located in a “Lugar” county

• Despite previously reimbursing CAH for stand-by costs of having a CRNA available for emergency surgery, CMS recently began to deny these payments

Meaningful Use

On December 30, CMS published a proposed definition of meaningful use of electronic health records. Phased in over 3 stages:

1. Electronically capturing health information in coded format

2. Expands earlier measures to focus on continuous quality improvement at the point of care and the exchange of information

3. Promoting improvements in quality, safety and efficiency, decision support, patient access, and improving population health

EHR Criteria

On December 30, ONC HIT issued an interim final rule that sets standards, specifications and certification criteria for EHR technology.

• Certification criteria follow the Stage 1 meaningful use objectivesmeaningful use objectives.

• Hospitals must use certified EHRs to qualify for Medicare and Medicaid payments.

• HIPAA is a starting point for certified EHR. However the HITECH Act will expand capabilities of HIPAA

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Recovery Audit ContractorsCMS RAC Review Phase-in Strategy

• Automated Review – black and white issues (Aug. 09)• DRG Validation-complex review (Oct/Nov 2009)• Complex Review for coding errors (Oct/Nov 2009)• DME Medical Necessity – complex review (FY 2010)• Medical Necessity Reviews-complex review (CY 2010)

Expired Extenders• Extends FLEX program grants thru 9/30/2010

• Authorized appropriations for FY 2010-12 to establish a demo for development and testing of new community health integration models in frontier states

• Extends 508 reclassifications thru 9/30/2009

• Extension of floor on Medicare work geographic adjustment under the Medicare physician fee schedule thru January 1, 2010

Expired Extenders (cont.)

• Extends direct billing for physician pathology services by independent labs thru 9/30/2009

• Extends payments for ground ambulance services and for air ambulance services under the ambulance fee schedule after July 1, 2008,

d b f J 1 2010and before January 1, 2010

• Extends and expands OPPS hold harmless for small, rural hospitals and SCHs under 100 beds thru 12/31/2009.

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Health CareHealth CareHealth Care Health Care ReformReform

Affordable Health Care for America Act – H.R. 3962, will expand coverage to 36 million people(96 percent of all those legally residing in the U.S. or 94 percent of all those residing in the country) and cost $1.052 trillion over the 10-year period (fiscal years 2010-2019).

Health Care Reform Bills

Patient Protection & Affordable Care Act – H.R. 3590, will expand coverage to 31 million people(94 percent of all those legally residing in the U.S. or 92 percent of all those residing in the country) and cost $848 billion over the 10-year period (fiscal years (FY) 2010-2019).

p ( y )

NO clear path forward• Three options

− Move forward on comprehensivereform … reconciliation process

− Scaled back bill− Exit strategy

• No decisions reachedNo decisions reached− Timing for decision

• Partisan processto continue

• Pivot to jobs andeconomy

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White House PlanBased on Senate passed billBased on Senate passed bill

• Medicaid match for new enrollees for all states at:– 100 percent from 2014 to 2017– 95 percent from 2018 to 2019– 90 percent from 2020 and beyond

• Delays excise tax on high cost plans until 2018 and i th h ld f ll i di id lincreases thresholds for all individuals

• Raises Medicare payroll tax and applies tax to unearned income for high income

• Creates Health Insurance Rate Authority• Closes the Medicare drug benefit “Donut Hole”• Increases brand-name pharmaceutical

assessment

Legislative Calendar

Date Action NoteJan 5 Convene Pro forma sessionJan 19 Reconvene MLK Holiday Jan 18.

Feb. 10-14 SNOWDid not meet insession

Feb 15 19 State Work Period Presidents' DayFeb 15-19 State Work Period Presidents DayMar 29-Apr 9 State Work Period EasterMay 31-Jun 4 State Work Period Memorial DayJul 5-Jul 9 State Work Period Independence DayAug 9-Sep 10 State Work Period Labor Day- Sep 6Sep 30 Target Adjournment Date

Should Reform Fail…

• Deficit reduction

• Entitlement reform

• Extending the life of theExtending the life of the Hospital Insurance Trust Fund

• Covering the Uninsured

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Beyond HealthBeyond HealthBeyond Health Beyond Health Care ReformCare Reform

• Baucus Grassley proposal

– Medicare physician payment fix 7 month extension

– COBRA subsidy extension 3 month extension

– Medicare extenders (generally 12 months)

Jobs Bill

– Bonus payments for clinic-based docs for HIT

• Reid Alternative

– $15 B scaled back package

– No healthcare provisions

– Passed 60 vote threshold

President’s Budget

Health Care Reform — The President’s budget includes a placeholder estimate of savings from healthestimate of savings from health insurance reform. Over ten years, the budget reflects $150 billion in deficit reduction for health reform, which represents the mid‐way point between the House‐passed and Senate‐passed bills.

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SELECT RURAL PROGRAMS ($ in millions)

FY 2009 FUNDING

FY 2009 ARRA

FY 2010 FUNDING

FY 2011 PRES.

Health Centers 2,190.0 2,000.0 2,190.0 2,480.0

Nurse Loan Repay/Scholarship

37.1 27 93.9 93.9

N t H lth S i C 135 0 300 0 141 9 168 6

President’s BudgetAnnual Appropriations ProcessAnnual Appropriations Process

Nat. Health Service Corps 135.0 300.0 141.9 168.6

340B Office of Pharm. 1.5 0 2.2 5.2

Rural Health Policy Develop. 9.7 0 9.9 9.9

Rural Health Outreach Grants 53.9 0 56 57.3

Rural & Community AEDs 1.8 0 2.5 2.5

Rural Hospital FLEX Grants 39.2 0 41.2 41.2

State Offices of Rural Health 9.2 0 10.1 10.1

Telehealth 7.6 1.0 11.6 11.6

Denali/Delta Combined 45.6 0 45 0

Budget – Next StepsCongressional Budget Process Timetable

Debt Limit/Pay-Go

SA 3305SA 3305——STATUTORY PAYSTATUTORY PAY--ASAS--YOUYOU--GO ACT OF 2010GO ACT OF 2010

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• Legislative maintenance– Medicare physician payment fix

– Medicaid FMAP extension

– COBRA subsidy extension

Beyond Health Care Reform

– Medicare extenders

– Section 1011 program

– Annual Medicare payment regulations Inpatient PPS rule (behavioral offset)

– Eliminating barriers to clinical integration

• Labor issues– Card check

– NLRB supervisor issue

– Independent contractors

St ff ti

Beyond Health Care Reform

– Staff ratios

– Mandatory overtime

– Lifting restrictions

• RAC implementation

• IRS 990/Schedule H implementation

John SupplittSenior Director

AHA Section for Small or

Contact Information

Rural HospitalsChicago, IL

312-422-3306jsupplitt@aha.org

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