State and Federal Health Care Legislation

1. State and Federal Health Care Legislation Lawrence Massa Minnesota Hospital Association

2. The good news continues ….

3. Well … not so fast …

4. State Health Care Legislation

5. State Issues:Community benefit • Passed repeal legislation keeping hospitals’ community benefit activities locally determined. • Unanimous support in House and Senate • Repeal of new rider language from 2011 • Funding language for Statewide Health Improvement Project (SHIP) remains

6. State Issues:Provider Peer Grouping • Passed a Provider Peer Grouping “fix-up” language in same bill as community benefit. • Allows providers to verify their data • Requires better risk adjustment for high cost services like trauma, medical education and neo-natal ICU • Creates a stakeholder/expert advisory committee • Expands scope of appeals (peer group, calculations, methodology and data) • Requires use of most current data available • Eliminates requirement that health plans use PPG in product design

7. State Issues:HHS Omnibus Bill • Allow Medicaid coverage for inpatient mental health services delivered by a physician assistant acting under psychiatrist’s supervision • Further restriction on release of medical records • Expands liability for unauthorized, intentional access via record locator service • Requires study by Department of Health to examine capability of detecting unauthorized attempts to view a patient’s medical records • Establishes a 10-day window for DHS prior authorization for PT/OT, speech, audiology and mental health services, otherwise authorized

8. State Issues:HHS Omnibus Bill • Restores Emergency Medical Assistance coverage for dialysis and cancer treatments • Repeals Minn. Rule that required physician authentication (signature) of verbal/emergency orders within 24 hours

9. State Issues:Radiation Therapy • The current moratorium in 14 counties stays in place until 2014 • After 2014, can’t build a new radiation facility within 7 miles from a current facility • Maintained the requirement that any new radiation facility must be built in collaboration with a hospital

10. State Issues:Miscellaneous • Enacted a new felony-level offense for intentional deprivation of a vulnerable adult. • Provides affirmative defenses for caregivers acting in good faith • Amended MN’s No-Fault Auto Insurance statute. • Restricts the use of “runners and cappers” which can generate inappropriate health care services. • $20,000 in medical coverage remains in place. • Newborn screening bill responds to court ruling • Opt-out for testing • Opt-in for allowing MDH to store sample for 18 years

11. Other policy issues raised but not enacted • Interstate Nurse Licensure Compact • Partial restoration of Medical Education Research Costs (MERC) • Health Insurance Exchange • 1-year restoration of 5% cut to outpatient provider rates • Leapfrog mandate

12. Other policy issues raised but not enacted • Mandatory nurse-to-patient staffing ratios • Bills introduced (SF 2182; HF 2618) • MHA successful at keeping bills from getting hearings in either House or Senate • Major, contentious issue for 2012 elections and 2013 session • MN hospitals already provide safest, highest quality care in the country • Mandated ratios not shown to improve care safety or quality • Hospitals need flexibility to staff for patient acuity and caregivers’ experience/skill level • Mandated ratios increase the cost of care significantly

13. Attorney General Agreement

14. Current Requirements:Based on 2005 agreement &2007 extension • Cap on charges to uninsured • Uninsured pay amount equal to what hospital’s “Most Favored Insurer” pays • Adopt charity care and debt collection policies • Limit debt collection litigation (and litigation-like) • Limit on garnishment, contingency fees, credit bureau reports • Requires senior corporate officer review at each step of litigation process

15. Modifications in new extension • 5-year extension • Modify Attorney General contact information on hospital collection notices so patients contact hospital first, then AG if issue is unresolved • Clarify that hospitals may respond to patient inquiries verbally, not just in writing

16. Federal Issues

17. Federal budget not getting any prettier • Rep. Paul Ryan budget proposal • Shift Medicare to voucher program • Shift Medicaid to block grant • Debt ceiling deal from 2011 called for 2% across-the-board cuts • Goes into effect Jan. 1, 2013 • Includes Medicare and critical access hospitals • Will not apply to Medicaid • President Obama proposed additional hospital and provider cuts

18. Critical Access Hospitalsno longer “under the radar” • President proposed cutting payments 1% • President proposed eliminating CAH status for hospitals within ten miles of another hospital • Others proposed 20 miles • Independent Payment Advisory Board pending • 15 members appointed by the President • Required to cut $13 billion in six years from CAHs, physicians or other non-hospital providers (while physician sustainable growth rate cuts remain unresolved)

19. Health Reform:Trends and Speculations

20. ACA in Limbo

21. Meanwhile . . . • States are spending hundreds of millions of dollars in federal grant funds to construct health insurance exchanges • Insurance plans extended coverage to dependent children up to age 26 • Minnesota expanded Medicaid to cover childless adults up to 75% of FPL All dependent on legality of ACA

22. Health care reform initiatives in Minnesota • Gov. Dayton began early Medicaid enrollment • 100,000+ people eligible for Medicaid coverage • Decrease uninsured population by 28,000; decrease underinsured population by 75,000 • Medicaid is more meaningful coverage with statewide access to providers • Gov. Dayton building health insurance exchange • Using more than $36 million in federal grants • Controversy with GOP legislators over authority to spend federal grants without enabling legislation • State must make substantial progress on Exchange by 2013 or federal government will run MN’s Exchange

23. Health Care Home:Minnesota’s medical home model • Requires certification by the state • Multiple payers participating • Medicaid • State employees • Medicare • Commercial • Care coordination fee varies based on number of chronic/complex conditions from $10/month for 2 conditions to $60 (Medicaid) or $45/month (Medicare) for 10 conditions

24. Health Care Home:Minnesota’s medical home model • 150 clinics certified in MN so far • Provide care for 438,000 non-Medicarepatients, although many, many fewerhave enrolled to receive health care home services • Total Medicaid care coordination fee payments to providers are much smaller than predicted because of lower-than expected enrollment

25. Bundled payments • Lump payment for services patient receives from multiple providers for same episode or condition • Flexibility in program • Benefits providers assembling bundles • Makes it more difficult to for other providers to discern what works, best practices, etc. • Integrated or collaborative providers have better opportunity to succeed

26. Bundled Payments • MHA members applying for CMS’ Bundled Payment program • MHA-led consortium of 8 hospitals CentraCare Fairview Southdale Fairview Ridges Fairview UMMC North Memorial Regions Park Nicollet St. Luke’s • Other MHA members submitting applications EssentiaHealthEast Mayo

27. Accountable Care Organizations • Group of providers that agree to care for an entire population of patients & achieve quality and cost thresholds • Medicare proposed Shared Savings Program • Min. 5,000 Medicare beneficiaries • 33 quality measures required to be reported • 2-4% savings threshold before eligible for shared savings bonus • Withhold of 25% of any savings bonus • soon Accountable Care Organizations

28. MHA seeking rural ACO modelsfrom CMS Center for Innovation • Micro-ACOs • Specify smaller region, subpopulation of patients (e.g., dual eligibles), and less financial risk • Focus on total cost of care coordination, not necessarily total cost of care delivery • Uncoupled-ACOs • Non-hospital-provider ACO within community/region • Allow CAH to retain cost-based reimbursement • Create financial rewards for ACO/community providers based on total cost (including hospitalization) and quality

29. Accountable Care Organizations • Three Minnesota health systems certified as Pioneer ACOs by CMS • Allina Hospitals & Clinics • Fairview Health Services • Park Nicollet Health Services(also participated in Physician Group Practice demonstration)

30. Accountable Care OrganizationsMedicaid • Demonstration projects on the horizon • State issued Request for Proposals (RFP), which gave hospitals more flexibility • Contract negotiations on-going • Nine applicants CentraCare Children’s Hospitals Essentia Fairview FQHCs in Twin Cities Mayo Clinic North Memorial Park Nicollet Allina • Hennepin County has similar, ambitious project • Includes corrections, social services, courts, etc. as well as health care in total cost of care calculation

31. Examples of ACO considerationsfor potential partnerships • Potential provider/partner must • Meet defined performance measures on quality, experience and cost • Have capability to use ACO network’s resources and optimize transitions of care • Share clinical and financial data with ACO • Commit to use ACO’s analytics, metrics • Participate in case review and performance improvement discussions • Use or refer to other ACO network providers • Help reduce ACO network’s readmissions

32. Health systems are responding to demand for more integrated care delivery and financing

33. Questions & Discussion