How much to cut hospital payments is another Build Back Better battle
November 22, 2021 8:33 am |
Washington Post
House Democrats passed President Biden’s sprawling economic package Friday after months of haggling over how expansive the legislation would be. But the changes are far from over.
One possibility: Democrats are discussing making a cut to certain states’ hospital payments last just a few years instead of permanently,according to four people familiar with the situation.
The idea would protect states that get coverage for their Medicaid expansion populations for the first time from hospital funding cuts if lawmakers don’t extend the policy past 2025. The economic package extends health insurance to roughly 2.2 million people living in the mostly GOP-led states that have refused Obamacare’s Medicaid expansion – but the expansion is only guaranteed for a few years.
The potential change, though far from definite, would make the hospital payment cuts last just through 2025, instead of permanently. That would align the reduction in dollars with the length of the new Medicaid expansion opportunity.
Hospitals and key lawmakers, such as Georgia Sens. Raphael Warnock (D) and Jon Ossoff (D), are fighting hard to remove the 12.5 percent reduction in payments altogether.
But supporters of the cuts argue policies granting more people health insurance (like expanding Medicaid) would improve hospitals’ finances — and more than make up for the cuts.
Hospitals get paid money from Medicaid for seeing a significant number of low-income patients. The theory: Those dollars, known as disproportionate share hospital (DSH) payments, are supposed to help offset the costs of providing services to patients who may not be able to pay or where Medicaid funding falls short.
Here’s the policy argument for the cuts: Closing the so-called Medicaid coverage gap would improve hospitals’ margins because facilities would get paid for more of the care they deliver. Those who gain coverage may also seek more medical services, according to a white paper from the USC-Brookings Schaeffer Initiative for Health Policy.
- People in nonexpansion states would get free coverage through the Obamacare exchanges. And those private plans reimburse at higher rates than Medicaid.
- Per a top Democrat: “The people that are in those red states that were in that Medicaid gap, once they access the ACA and they have insurance, that’s gonna more than make up for the hospitals and the caregivers in terms of whatever they’re getting from the state for uncompensated care,” Rep. Frank Pallone Jr. (D-N.J.), the chairman of the House Energy and Commerce Committee, said on a call with reporters Friday.
Yet, the powerful hospital industry is lining up against the reduction in payments — even for just a few years. They’re lobbying hard to kill the provision and are in part banking on Georgia’s Democratic senators, who helped Democrats win the majority last year, using their leverage to get it removed from the bill.
- “While we have long supported efforts to expand coverage, we do not believe that hospitals that disproportionately serve low-income, medically complex patients should be the offset,” Stacey Hughes, an executive vice president of the American Hospital Association, said in a statement to The Health 202.
- Safety net hospitals argue they won’t be the ones benefiting from people getting coverage through the Affordable Care Act’s exchanges — contending those patients will be going elsewhere — but would be most impacted by the cuts.
Meanwhile, a half dozen Republican senators from non-expansion states are asking congressional scorekeepers to further analyze any potential impact of the cuts.
Next up for the economic package
The House passed the Build Back Better bill, which bears the name of Biden’s campaign slogan, in a 220-to-213 vote Friday. Only one Democrat, Rep. Jared Golden (Maine), opposed the measure, while no Republicans supported it.
The vote is a victory for House Speaker Nancy Pelosi, who helped guide the bill’s passage despite warring among the party’s moderate and more liberal members. But now it heads to the Senate, where it faces a tough road ahead.
- Moderates, such as Sen. Joe Manchin (D-W.Va.), have long been concerned about the tax-and-spending measures’ price tag and policy scope — and could look to pare back its provisions, our colleague Tony Romm reports.
- Additionally, the two parties will soon begin sparring over what policies can be included under the budget maneuver Democrats are using to pass the package without any Republican votes.
How much to cut hospital payments is another Build Back Better battle
November 22, 2021 8:33 am
House Democrats passed President Biden’s sprawling economic package Friday after months of haggling over how expansive the legislation would be. But the changes are far from over.
One possibility: Democrats are discussing making a cut to certain states’ hospital payments last just a few years instead of permanently,according to four people familiar with the situation.
The idea would protect states that get coverage for their Medicaid expansion populations for the first time from hospital funding cuts if lawmakers don’t extend the policy past 2025. The economic package extends health insurance to roughly 2.2 million people living in the mostly GOP-led states that have refused Obamacare’s Medicaid expansion – but the expansion is only guaranteed for a few years.
The potential change, though far from definite, would make the hospital payment cuts last just through 2025, instead of permanently. That would align the reduction in dollars with the length of the new Medicaid expansion opportunity.
Hospitals and key lawmakers, such as Georgia Sens. Raphael Warnock (D) and Jon Ossoff (D), are fighting hard to remove the 12.5 percent reduction in payments altogether.
But supporters of the cuts argue policies granting more people health insurance (like expanding Medicaid) would improve hospitals’ finances — and more than make up for the cuts.
Hospitals get paid money from Medicaid for seeing a significant number of low-income patients. The theory: Those dollars, known as disproportionate share hospital (DSH) payments, are supposed to help offset the costs of providing services to patients who may not be able to pay or where Medicaid funding falls short.
Here’s the policy argument for the cuts: Closing the so-called Medicaid coverage gap would improve hospitals’ margins because facilities would get paid for more of the care they deliver. Those who gain coverage may also seek more medical services, according to a white paper from the USC-Brookings Schaeffer Initiative for Health Policy.
- People in nonexpansion states would get free coverage through the Obamacare exchanges. And those private plans reimburse at higher rates than Medicaid.
- Per a top Democrat: “The people that are in those red states that were in that Medicaid gap, once they access the ACA and they have insurance, that’s gonna more than make up for the hospitals and the caregivers in terms of whatever they’re getting from the state for uncompensated care,” Rep. Frank Pallone Jr. (D-N.J.), the chairman of the House Energy and Commerce Committee, said on a call with reporters Friday.
Yet, the powerful hospital industry is lining up against the reduction in payments — even for just a few years. They’re lobbying hard to kill the provision and are in part banking on Georgia’s Democratic senators, who helped Democrats win the majority last year, using their leverage to get it removed from the bill.
- “While we have long supported efforts to expand coverage, we do not believe that hospitals that disproportionately serve low-income, medically complex patients should be the offset,” Stacey Hughes, an executive vice president of the American Hospital Association, said in a statement to The Health 202.
- Safety net hospitals argue they won’t be the ones benefiting from people getting coverage through the Affordable Care Act’s exchanges — contending those patients will be going elsewhere — but would be most impacted by the cuts.
Meanwhile, a half dozen Republican senators from non-expansion states are asking congressional scorekeepers to further analyze any potential impact of the cuts.
Next up for the economic package
The House passed the Build Back Better bill, which bears the name of Biden’s campaign slogan, in a 220-to-213 vote Friday. Only one Democrat, Rep. Jared Golden (Maine), opposed the measure, while no Republicans supported it.
The vote is a victory for House Speaker Nancy Pelosi, who helped guide the bill’s passage despite warring among the party’s moderate and more liberal members. But now it heads to the Senate, where it faces a tough road ahead.
- Moderates, such as Sen. Joe Manchin (D-W.Va.), have long been concerned about the tax-and-spending measures’ price tag and policy scope — and could look to pare back its provisions, our colleague Tony Romm reports.
- Additionally, the two parties will soon begin sparring over what policies can be included under the budget maneuver Democrats are using to pass the package without any Republican votes.