The Pennsylvania Department of Public Welfare has issued a Medical Assistance Bulletin detailing changes in the fee-for-service fee schedule. The changes take effect immediately.
Read the bulletin with the changes here
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Declaring that “We in the commonwealth have never witnessed a law so vast, with such demands on state resources, and lack of federal guidance,” Pennsylvania Department of Public Welfare Secretary Gary Alexander told the House Energy and Commerce Committee last week that while Pennsylvania has not ruled out expanding its Medicaid program in accordance with the Affordable Care Act, “Under the constraints of the health care reform law, I do not think we can afford the expansion.”
Mr. Alexander made these remarks at a hearing of the committee’s Health Subcommittee, which was taking testimony on the Medicaid expansion component of the 2010 health care reform law.
While the Kaiser Foundation on Medicaid and the Uninsured says that expansion would cost Pennsylvania $2 billion through 2022, the Corbett administration has put a $4 billion price tag on such expansion.
The Safety-Net Association of Pennsylvania (SNAP) supports Medicaid expansion in the state.
Read more about Mr. Alexander’s testimony in this Pittsburgh Post-Gazette article and this Central Penn Business Journal article, which also includes a direct link to the secretary’s testimony.
If Medicaid is a health care program for at-risk low-income people, it appears that Medicaid itself is at risk during the current fiscal cliff talks in Washington, D.C.
While Medicaid was left untouched by last year’s sequestration bill, it is now viewed by growing numbers of policy-makers as a potential source of savings to help stave off the fiscal cliff.
Several aspects of Medicaid, in particular, appear to be vulnerable in the coming weeks. They include Medicaid provider taxes, which are incurring growing opposition in Washington and which, if ratcheted back, could save more than $25 billion; supplemental payments for Medicaid primary care providers, scheduled to take effect on January 1, which if eliminated would save $13 billion; better management of dual eligibles, which could save $12 billion; and medical equipment spending, where a competitive bidding program similar to that currently being introduced for Medicare could save $5 billion.
While all of these cuts would hurt Pennsylvania’s safety-net hospitals, those hospitals would particularly be affected by any reduction in either the rate at which the federal government matches the state’s Medicaid expenditures or in its ability to levy provider taxes, which are a key contributor to the financial foundation of the state’s Medicaid program.
Learn more about how Medicaid figures in the current fiscal cliff talks and how policy-makers are increasingly looking to Medicaid for savings in this Politico article
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Safety-net hospitals are 30 percent more likely to have readmission rates that exceed the national average – always a problem, but a greater problem than ever now that Medicare is penalizing hospitals for readmissions through its new Hospital Readmissions Reduction Program.
A recent Commonwealth Fund study quantified the degree to which safety-net hospitals’ readmissions exceed national averages, citing as the reason for those reasons that
Safety-net hospitals care for a disproportionate share of vulnerable populations who are low-income, uninsured, underinsured, or on Medicaid. They have substantially higher rates of chronic health problems, disability, mental illness, and substance abuse, compared with the general population. Safety-net hospital patients also have disproportionate personal and social needs that adversely affect their health and act as barriers to accessing and fully benefiting from care. These include homelessness, unsafe housing, and unstable employment. In particular, vulnerable populations are more likely to lack social support systems (e.g., family members at home) and housing stability, which contribute to a disproportionate risk of readmission after hospital discharge.
The report also offers strategies to help safety-net hospitals reduce their readmissions and avoid the Medicare financial penalties they now face for those readmissions.
Find “Higher Readmissions at Safety-Net Hospitals and Potential Policy Solutions” here
, on the web site of The Commonwealth Fund.
Uncompensated care rose more than five percent for hospitals in western Pennsylvania while operating margins fell slightly during the fiscal year that ended on June 30.
Hospitals reported more patients unable to pay their bills and lower reimbursements as more procedures move to an outpatient basis and more inpatient care is accorded “observation day” status.
Read more about the results of a survey of 56 hospitals conducted by the Hospital Council of Western Pennsylvania in this Pittsburgh Post-Gazette article.
States must opt into the Affordable Care Act’s Medicaid expansion or opt out, the federal government has informed the nation’s governors. They may not implement a partial expansion.
That was the message conveyed to governors by Kathleen Sebelius, Secretary of the U.S. Department of Health and Services (HHS).
The Medicaid expansion, made mandatory in the 2010 health care reform law, has been the subject of much debate since the Supreme Court ruled the mandate unconstitutional in June and instead left the decision on whether to expand to the individual states. Some governors have already declared that their states will expand their Medicaid programs, some have announced that they will not, and many still have not decided.
Pennsylvania is among the states that have not yet announced whether they will expand their Medicaid programs, although Governor Tom Corbett has signaled that he is reluctant to incur the additional costs that expansion would involve. The Safety-Net Association of Pennsylvania (SNAP) supports Medicaid expansion.
Read more about this latest decision from HHS in this Washington Post article and read an FAQ that HHS sent to governors regarding both Medicaid expansion and the operation of health insurance exchanges here.
In its mid-year budget briefing, the Corbett administration projects that Pennsylvania’s Medical Assistance costs will rise $650 million in the state’s 2014 fiscal year, which will begin on July 1, 2013.
The budget briefing also noted that the governor has directed state agencies to maintain level funding in their proposed FY 2014 budgets, that level funding essentially means a cut of seven to eight percent because of rising personnel costs, and that the governor “has reiterated that no new taxes will be part of the 2013-14 budget.”
Although the governor does not present his proposed FY 2014 budget for another two months, this raises the question of how the state might pay these increased Medicaid costs – or if next year’s budget might include payment cuts for the state’s Medicaid providers.
Cut would be particularly burdensome to Pennsylvania’s safety-net hospitals because of the especially high numbers of Medicaid patients they serve and their unusual dependence on Medicaid revenue.
Read about the mid-year budget briefing in this PA Independent article and find the budget briefing itself here
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The time for states to decide whether they will expand their Medicaid programs in accordance with the Affordable Care Act is fast approaching.
With the Medicaid expansion due to begin in 2014, thirteen states seem likely to opt out, 14 appear ready to expand, and the rest are still on the fence.
Among the major concerns of states still deciding are the cost of expansion and their concern that the federal government, currently scheduled to assume almost all of the cost of expansion, may at some point decide to shift more of expansion’s costs to state governments.
Pennsylvania is among the undecided states, but comments in recent months by Governor Corbett suggest that he is leaning against Medicaid expansion in the commonwealth. The Safety-Net Association of Pennsylvania (SNAP) supports that expansion.
Read more about the deliberations taking place in state capitals across the country, and the questions with which elected officials are wrestling, in this Washington Post article
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Pennsylvania cannot decide whether to operate its own health insurance exchange or allow the federal government to operate an exchange for the state until it gets more information from the federal government about the regulations governing exchanges, how much they will cost to operate, and what a partnership with the federal government might look like.
That’s the message Pennsylvania Governor Tom Corbett conveyed last week.
Health insurance exchanges are among the most important components of the Affordable Care Act. States have until December 14 to inform the federal government whether they will operate their own exchange and Pennsylvania is one of ten states that still had not made this decision.
Read more about Governor Corbett’s thoughts on health insurance exchanges and the additional information he seeks before deciding in this PA Independent article
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In a recent editorial, the Washington Post called for the federal government to reform the provider taxes that most states use to help finance their Medicaid programs.
Provider taxes essentially enable states to increase the effective rate at which the federal government matches their Medicaid spending. Past efforts to limit provider taxes have failed, but the Post calls for reform to be phased in over a number of years.
Pennsylvania currently levies two such taxes: a state-wide hospital assessment and a Philadelphia assessment. Both are important parts of the financing of the state’s Medical Assistance program. Provider taxes are thought to be on the table during the current fiscal cliff negotiations between the Obama administration and congressional leaders.
Read the Washington Post editorial on Medicaid provider taxes here.