Medicaid Expansion and Exchange Marketplaces at the Ground Level

1. Medicaid Expansion and Exchange Marketplaces at the Ground Level April 26, 2013 Xiaoyi Huang, Esq. Assistant Vice President for Policy NAPH National Association of Public Hospitals and Health Systems

2. Agenda • Introduction • What will happen on Jan. 1? • What does it all mean? • Q&A National Association of Public Hospitals and Health Systems

3. About NAPH member hospitals National Association of Public Hospitals and Health Systems

4. NAPH Members by Bed Size, 2010 National Association of Public Hospitals and Health Systems

5. Discharges by Race/Ethnicity at NAPH Members, 2010 National Association of Public Hospitals and Health Systems

6. Discharges by Age at NAPH Members, 2010 National Association of Public Hospitals and Health Systems

7. Gross Charges by Payer Source at NAPH Members, 2010 National Association of Public Hospitals and Health Systems

8. Hospital Margins, 2010 National Association of Public Hospitals and Health Systems

9. NAPH Member Sources of Financing for Unreimbursed Care, 2010 National Association of Public Hospitals and Health Systems

10. What Will happen on Jan. 1? National Association of Public Hospitals and Health Systems

11. Important Dates • Effective date for exchange coverage and Medicaid expansion: Jan. 1, 2014 • Exchange open enrollment: Oct. 1 2013 to Mar. 31, 2014 National Association of Public Hospitals and Health Systems

12. Medicaid Expansion – Yea or Nay? National Association of Public Hospitals and Health Systems

13. Medicaid Expansion in IL • 2+ million people on IL Medicaid today • 700,000 current uninsured >> eligible • ~180K under current rules (regular FMAP) • ~520K under expansion rules (enhanced FMAP) • ~500,000 – 600,000 people will enroll National Association of Public Hospitals and Health Systems

14. Issues to Consider • Do you have capacity to take on additional Medicaid patients, including those who have been forgoing care? • What will be the impact on your bottom line? • Will your Medicaid shortfall increase? • Will this shift in payer mix impact your supplemental payments? • What will be the impact on DSH? National Association of Public Hospitals and Health Systems

15. Exchange Marketplace • IL is pursuing the partnership model until at least 2015 • Until then, IL plans to take on consumer assistance and plan management functions • Federal government will take on eligibility determination, enrollment, and financial management functions National Association of Public Hospitals and Health Systems

16. Profile of Exchange Population • Depending on uptake, between 300,000 to 700,000 will enroll in IL’s partnership exchange • Median poverty level: 235% of FPL • Two-thirds: 200-400% of FPL • 78% employed • Access and utilization more like uninsured than insured population National Association of Public Hospitals and Health Systems

17. Issues to Consider • What happens when people move between Medicaid and exchange coverage? • What if patients need services that are not covered by the EHB benchmark package? • What if the cost-sharing is too high? • What if people can’t afford the premiums? National Association of Public Hospitals and Health Systems

18. Special Issues to Consider as an Essential Community Provider (ECP) • Part of QHPs’ network adequacy standards to include a sufficient number and type of ECPs • If not already established, can you develop beneficial relationships with issuers on the exchange? • If not, will existing patients (the newly eligibles) go elsewhere once they are covered? • What will happen if these patients lose their coverage and need medical care? • Will you continue to provide a disproportionate share of uncompensated care? National Association of Public Hospitals and Health Systems

19. And Don’t Forget the Residual Uninsured • 1.8 million people in IL uninsured today • Those who move in and out of coverage • Those who can’t afford the premiums • Those who choose not to purchase insurance • Those who are exempt from the individual mandate • Undocumented Immigrants National Association of Public Hospitals and Health Systems

20. What does it all mean? National Association of Public Hospitals and Health Systems

21. Adequacy of Reimbursement Rates • Persistent and growing Medicaid underpayments • Adequacy of negotiated rates with plans on the exchange marketplaces • Uncompensated costs of covered services • Unpaid cost sharing for covered services • Uncompensated cost of uncovered services National Association of Public Hospitals and Health Systems

22. Cuts Already in Law and Ongoing Deficit Reduction • Medicaid DSH reductions (FYs 14 to 22) • Can it be offset with Medicare DSH? • Sequestration cuts to Medicare ($11b this year) • New documentation & coding cuts ($11b from FYs14 to 17) • Annual market basket reduction and productivity adjustment ($200b over 10 years) National Association of Public Hospitals and Health Systems

23. Changing Medicare and Medicaid Landscape • VBP • Readmissions • HACs (HCACs in Medicaid) • ACOs • Bundled payments • Medicaid health homes • Community health teams National Association of Public Hospitals and Health Systems

24. Questions? Xiaoyi Huang, Esq. Assistant Vice President for Policy NAPH xhuang@naph.org 202-585-0127 National Association of Public Hospitals and Health Systems