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Federal Focus

The ACA: Repeal & Replace 

Congress is currently considering changes to the Affordable Care Act (ACA). The Republican alternative, which narrowly passed the House of Representatives in early May on a party-line vote, has been coined the "American Health Care Act" (AHCA, for short).  While the AHCA will make significant changes in the health care landscape it is far from a "repeal" bill.  In fact, much of the ACA will remain even if the AHCA is signed into law as passed by the House of Representatives.  For example, cuts to Medicare designed to pay for Medicaid Expansion will remain in effect even though the AHCA ultimately winnows away and eventually does away with Medicaid Expansion.  

Sometimes our position is influenced by the finer details such as these.  However, with the AHCA our position is rooted in a much more basic philosophy.  

When considering advocating for or against any particular piece of legislation, BJC's first order of business is always to assess the impact it will have on patients.  Many of the 24 million Americans projected to lose coverage if the AHCA is signed into law are our neighbors, friends, or family.  And, many of those who would remain insured may be again subjected to discriminatory pricing because of pre-existing medical conditions or because of their age.  Because we believe the AHCA falls short of ensuring that patients have access to affordable coverage, we are opposed to its passage and are actively engaging members of Congress to that effect.

Update November, 2017

Attention in health care policy has shifted, for the time being, to reauthorizing the Children's Health Insurance Program, Medicare extenders, and delaying scheduled DSH funding cuts.  However, it remains possible that Congress and the Trump Administration may return to "repeal and replace" in the future.  We are encouraged by the bi-partisan efforts of Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) to stabilize the insurance markets and find compromise on other areas of health care policy.  Should efforts to undermine the Affordable Care Act return, we will again engage along the same principles as outlined above.

Socioeconomic Status

CMS is in a vast transition period as it shifts its reimbursement methods to emphasize performance and outcomes over volume of services delivered. In theory, this is a laudable endeavor. In practice, however, it has had severely negative implications.

The most glaring problem in CMS’s revised methodology is the failure to account for differing patient populations’ socioeconomic (also referred to as sociodemographic) status. That is, hospitals across the country that care for poorer populations (which are generally sicker) are held to the same outcome standards as those that treat wealthier (and generally healthier) populations.

One succinct example lies in the new penalties that are applied to hospitals that have lackluster outcomes in hospital 30-day readmissions. As the American Hospital Association (AHA) notes, there are a variety of factors outside of a hospital’s control which contribute to an individual being readmitted within 30 days. Socioeconomic status is one such factor. The result is that many of the nation’s urban and academic hospitals are being penalized for caring for our nation’s inherently sicker and more vulnerable patient populations.

Simply put, socioeconomic status affects a patient’s health outcomes regardless of the quality of care they receive. Our institutions, like Barnes-Jewish Hospital and Christian Hospital, that care for these patients should not be penalized for caring for all populations.

While there is much work to be done to fully risk-adjust these types of penalties, BJC Government Relations has advocated for two important changes that recently won approval.  First, Congress passed the 21st Century Cures Act which contained a provision to risk-adjust for those dually eligible for both Medicare and Medicaid.  Also, CMS announced that it would be moving to the use of the Worksheet S-10 Cost Report in calculating uncompensated care costs.  This worksheet better captures the actual costs to hospitals in providing care for those who are under/uninsured, which will subsequently improve the reimbursement due to providers who care for disproportionate amounts of these populations.  

Quality Ratings

Similar to our concerns with CMS’s readmissions penalties, we have joined hundreds of hospitals around the country, the Association of American Medical Colleges (AAMC) and the American Hospital Association (AHA) in echoing concerns about CMS’s new star ratings system. Similar to how a movie critic judges a film, CMS is attempting to boil hospital quality ratings down to a 5-star ratings system. To quantify health care quality in such a simplified way is inherently flawed, from our perspective. And, again, CMS has not factored in the socioeconomic status of a hospital’s patient population into the scoring methodology.

While successful in delaying the release of the star ratings from April of 2016 to July, we continue to make a case for a shift in CMS's underlying methodology.

Prescription Drug Costs

Federal law requires that prescription drug companies sell drugs at their best price to state Medicaid programs (most Medicaid services funded by roughly 60% federal funds).  The 340B program was established in recognition that certain providers, like Critical Access Hospitals and Disproportionate Share Hospitals, see a large number of patients either covered by a government insurance plan or that are uninsured altogether. Similar to the Medicaid best price mandate, providers using the 340B program are eligible to receive high-cost drugs at a significantly reduced price, allowing their patients to receive more affordable care.  

Recent court rulings have altered the 340B program landscape and some in Congress, at the behest of pharmaceutical companies, are working to rescind or significantly restrict the 340B program.  BJC will continue to stand in opposition to these forces that will negatively impact patient care.

Physician-owned Hospitals

Since 1989, Congress has recognized that certain types of business relationships in the health care industry can contribute to improper care recommendations and overutilization. Hospitals that are owned by physicians are one such example where the conflict of interest is simply too great. We have long concurred with Congress that a physician that has the authority to refer a patient for care should not own outright or in part a facility to which he or she is referring patients. We continue to monitor Congress’s proposals to ensure that this longstanding policy remains the standard.

Children's Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) is a federal/state collaboration that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid but too little to afford family health insurance. Today, 92,918 Missouri children have health insurance provided by CHIP. The program has been reauthorized federally until 2019, but funding was only authorized through September 2017. 

Congressional support for CHIP funding is needed to ensure children do not lose insurance as they transition between CHIP and the marketplace.  St. Louis Children’s Hospital has a long standing history of supporting our patients and families through the Congressional reauthorization and funding process.

Medical Education (Adult and Children’s)

Training the next generation of physicians requires teaching hospitals to assume an increased financial burden. Graduate Medical Education (GME) payments are designed to help cover the costs of training new residents. For example, these payments go toward residents’ stipends and fringe benefits, the salaries and benefits of supervising faculty, designated overhead costs associated with teaching in a hospital setting, and direct costs such as administrative and location fees. Coupled with GME Payments, Indirect Medical Education (IME) payments assist with the higher costs associated with the accommodation of medical students in the patient care setting.

Though teaching hospitals provide millions of dollars in critical patient care services to a diverse patient population, they are faced with the potential of up to a 70% reduction in GME/IME payments from Medicare – a situation which is complicated by the fact that teaching hospitals are not fully reimbursed for the costs of graduate medical education. Every year, there is a multimillion dollar gap between the cost of educating new physicians and GME/IME payments we receive. The current model is simply unsustainable. Children’s Hospital GME is separately appropriated by Congress and we continue to push for training the next generation of professionals caring in the pediatric space.

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Page updated 11/1/17

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