ADVOCACY UPDATE. Medicare and Medicaid in September 14, 2017

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Dorthy McCormick
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1 ADVOCACY UPDATE Medicare and Medicaid in 2018 September 14, 2017

2 AGENDA OHA Advocacy Update I. OHA advocacy targets II. Ohio s policy & political context III. SFY18-19 state budget overview IV. ODM appropriation gap plan and OHA response V. Price transparency update OHA Advocacy Update September 14,

3 OHA ADVOCACY TARGETS OHA Advocacy Update September 14,

4 POLICY & POLITICAL CONTEXT OHA Advocacy Update September 14,

5 THE TERRAIN (#1) Promising tax cuts Despite lagging tax revenues, tax cuts are paramount. As a result, the budget must be balanced with underspending and other maneuvering. OHA Advocacy Update September 14,

6 THE TERRAIN (#2) Commitment to Medicaid Expansion Medicaid and its eligibility expansion stay in place at current levels, despite any changes at the federal level. Results in a significant increase in Medicaid spending since Non-Medicaid agency funding including primary, secondary, and higher education must go without cost-of-living adjustments and, in some cases, cuts. OHA Advocacy Update September 14,

7 Billions HOSPITAL PAYMENTS UNDER GOV. KASICH Total Ohio Medicaid Hospital Payments $8 $7 $6.49 $6.68 $6.74 $7.10 $7.00 $6 $5 $4.87 $5.23 $4 $3 $2 $1 $0 SFY 2013 SFY 2014 SFY 2015 SFY 2016 SFY 2017 SFY 2018 (proposed) SFY 2019 (proposed) $2.13 billion (43.7%) increase from FY13 to FY19 OHA Advocacy Update September 14,

8 BUDGET BREAKDOWN Hospital Payments OHA Advocacy Update September 14,

9 THE TERRAIN (#3) Cuts to local governments Local government funds will continue to see a decline in state support that began in OHA Advocacy Update September 14,

10 THE TERRAIN (#4) Opiate epidemic strategy Opiate and addiction crisis will be addressed through marginal spending increases for certain programs. Primary way of addressing the problem is through Medicaid Expansion. OHA Advocacy Update September 14,

11 THE TERRAIN (#5) Do not use Rainy Day Fund Unwillingness to use the Budget Stabilization Fund or other one-time money for ongoing purposes. Legacy of large Rainy Day Fund. OHA Advocacy Update September 14,

SETTING THE TABLE Early signs of budget challenges to come We are on the verge of a recession in our state Columbus Dispatch, December 2016 "There's not going to be a lot of growth in any

12 SETTING THE TABLE Early signs of budget challenges to come We are on the verge of a recession in our state Columbus Dispatch, December 2016 "There's not going to be a lot of growth in any [state] program. It's going to be tight. There's not going to be an ability to give significant percentage increases." Cleveland.com, November 2016 OHA Advocacy Update September 14,

13 SFY18-19 STATE BUDGET OVERVIEW OHA Advocacy Update September 14,

14 KASICH ADMINISTRATION BUDGET HISTORY Previous budgets included cuts to hospitals Years (SFY) Budget Bill Budget Impact State Share Budget Impact All Funds H.B. 153 $214 million $597 million H.B. 59 $185 million $500 million H.B. 64 $233 million $483 million OHA Advocacy Update September 14,

15 KASICH ADMINISTRATION BUDGET HISTORY Comparing FY18-19 budget to previous years Years (SFY) Budget Bill Budget Impact State Share Budget Impact All Funds H.B. 153 $214 million $597 million H.B. 59 $185 million $500 million H.B. 64 $233 million $483 million H.B. 49 $179 million $587 million OHA Advocacy Update September 14,

16 STATE REVENUE ACTUALS State General Revenue Fund totals FY2017 Source: LSC Budget Footnotes, July 2017 OHA Advocacy Update September 14,

17 MEDICAID UNDERSPENDING A tradition in this Administration FY Underspend FY 2011 $90.2 FY 2012 ($589.1) FY 2013 ($955.2) FY 2014 ($731.6) FY 2015 ($652.1) FY 2016 ($1,265.8) FY 2017 ($1,561.1) Source: LSC Budget Footnotes, July 2017 OHA Advocacy Update September 14,

18 UPDATED BUDGET FORECAST Lower tax revenue and $800M more in budget cuts announced April 13, 2017 OHA Advocacy Update September 14,

19 STATE BUDGET UPDATE As Passed by the General Assembly Key Hospital Issues Removes managed care non-contracting language Reverts back to current price transparency law Removes moratorium on health insurance mandates Freezes hospital rates Adds Medicaid Expansion eligibility requirements Requires Controlling Board approval for release of Medicaid funds Requires legislative approval for increase of Medicaid rates Requires ODM to re-submit the Healthy Ohio Program waiver Requires ODM to seek a waiver to increase the HIC franchise fee OHA Advocacy Update September 14,

20 VETO MESSAGE Selected health care vetoes Medicaid Payment for Hospital Service Controlling Board Authority Medicaid Coverage of Optional Eligibility Groups Legislative Oversight of Rules Increasing Medicaid Rates Medicaid Rates for Neonatal and Newborn Services Medicaid Rates for Nursing Facilities Medicaid Eligibility Requirements for Expansion Group Behavioral Health Redesign Health Insuring Corporation Franchise Fee Controlling Board Authorization Regarding Medicaid Expenditures Waiver Regarding Healthy Ohio Program OHA Advocacy Update September 14,

21 VETO OVERRIDES The legislative response from the House & Senate Controlling Board Authority Medicaid Coverage of Optional Eligibility Groups Medicaid Rates for Neonatal and Newborn Services Medicaid Rates for Nursing Facilities Behavioral Health Redesign Controlling Board Authorization Regarding Medicaid Expenditures OHA Advocacy Update September 14,

22 VETO OVERRIDES Still pending in the House Legislative Oversight of Rules Increasing Medicaid Rates Medicaid Eligibility Requirements for Expansion Group Health Insuring Corporation Franchise Fee Waiver Regarding Healthy Ohio Program OHA Advocacy Update September 14,

23 THE ADMINISTRATION S APPROPRIATION GAP OHA Advocacy Update September 14,

24 OFFICE OF HEALTH TRANSFORMATION Press Release on July 1, 2017 Within hours of the governor signing a structurally balanced biennial budget, OHT announced via that the Medicaid budget with under funded (now estimated to be over $1.26 billion (state/federal) biennially and that balancing it would require a 6% cut in provider (including hospital) reimbursement rates. However, the same missive stated that the administration would work with providers to determine exactly how this should happen and, in the process, suggested that there might be differential rate reductions. A determination of all of this is to be completed by October 1, 2017 with the rate reductions to go into effect either in October or, possibly, as late as January 1, OHA Advocacy Update September 14,

25 OFFICE OF HEALTH TRANSFORMATION Appropriation Gap OHA Advocacy Update September 14,

26 OHIO MEDICAID SHORTFALL OHA Advocacy Update September 14,

27 OHIO MEDICAID SHORTFALL OHA Advocacy Update September 14,

28 OHIO MEDICAID SHORTFALL OHA Advocacy Update September 14,

29 PRICE TRANSPARENCY OHA Advocacy Update September 14,

30 PRICE TRANSPARENCY History OHA discussions with Board and members began 2014 OHA Board: Hospitals, not insurers, should be source of hospital price information Discussed transparency at CEO meeting in March 2016 At that time, OHA was exploring variety of options, including public website, APCD, various transparency tools, others Then: Legislature intervened OHA Advocacy Update September 14,

31 PRICE TRANSPARENCY The Legislature s Response Medicaid: 53% of state s budget Legislature: Antagonistic to continuing Medicaid expansion State Budget Discussions: Conservative faction would not support budget without a price transparency provision Bottom Line: No continuation of Medicaid expansion without Price Transparency language OHA Advocacy Update September 14,

32 PRICE TRANSPARENCY In the BWC budget, Am. Sub. HB 52 Language requires providers to provide, prior to delivery of nonemergency services, a written good faith estimate of: Amount provider will charge patient or plan; Amount health plan intends to pay; The difference (consumer out-of-pocket) Health plans are required to respond to a provider s inquiry regarding a patient s insurance coverage within a reasonable time Effective 1/1/17 Legislative Language (2015) OHA Advocacy Update September 14,

33 PRICE TRANSPARENCY OHA s Response Convened Price Transparency Work Group Recommended parameters OHA Board approved parameters in October 2015 OHA staff has been advocating for those parameters to be included to fix statute Frequent, ongoing conversations with legislative leaders since then OHA Advocacy Update September 14,

34 PRICE TRANSPARENCY Scope of service Scheduled services Payer cooperation Non-governmental Payers Out-of-Pocket costs OHA parameters address Time to Comply Penalties/Liability Protection Good faith No delay in care and insurer payment not contingent on receipt of estimate OHA Advocacy Update September 14,

35 PRICE TRANSPARENCY Currently No provision included in the state budget current law stands and litigation continues OHA is preparing for September th court dates, while continuing to engage the legislature in conversations about a workable solution Legislative conversations continue OHA Advocacy Update September 14,

36 OHA collaborates with member hospitals and health systems to ensure a healthy Ohio Ohio Hospital Association 155 E. Broad St., Suite 301 Columbus, OH T ohiohospitals.org

HOSPITAL FRANCHISE FEE, SUPPLEMENTAL PAYMENT PROGRAMS & SIM UPDATE. OHA Medicare & Medicaid Update

HOSPITAL FRANCHISE FEE, SUPPLEMENTAL PAYMENT PROGRAMS & SIM UPDATE OHA Medicare & Medicaid Update September 14, 2017 HOSPITAL FRANCHISE FEE 2018 Franchise Fee - $646M in 2018 (est.) Rate set by rule at