The American Hospital Association and the National Association of Public Hospitals and Health Systems are both fighting a proposed CMS rule that the associations say would limit healthcare services to poor and uninsured patients.
The AHA and NAPH last week asked congressional leaders to help stall the proposed regulation that limits states use of intergovernmental transfers and alters the upper-payment limit in an effort to save the Medicaid program close to $4 billion over five years.
Harsh spending cuts are not the solution to Medicaids woes, AHA Executive Vice President Richard Pollack said in a statement. Pollack said he wants more dialogue on the topic before any final commitment is inked. The AHA will pursue every avenue available to ensure that this rule does not prevent hospitals from providing for their community health needs.
Similarly, in a letter sent on Jan. 16 to Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.), the NAPH expressed strenuous opposition to the proposal. We firmly believe that its impact will be to undermine the already fragile viability of the nations health safety net and reduce or eliminate access to healthcare services for many millions of low-income patients, the letter states.
Under one provision of the rule change, the CMS would limit Medicaid reimbursement for public facilities operated by state and local governments to the individuals cost. The current upper-payment-limit structure restricts provider reimbursement to an aggregate limit for various provider types and classes of providers. Upper-payment limits are the maximum amount that states can pay providers for Medicaid services, according to a Kaiser Commission on Medicaid and the Uninsured report.
Also part of the rule is a provision that could affect any of the current intergovernmental transfers that states have been using, according to the Kaiser commission.
While the arrangements are legal, problems can occur if the federal share of total Medicaid funding is raised far above the states nominal statuary federal matching rate, or if federal matching funds are made available for purposes other than purchasing a covered healthcare service for Medicaid-eligible individuals, according to the commission.
For example, say the state and the CMS reimburse a provider $100, with both groups paying $50 each. The hospital gets the $100 reimbursement, but then may kick $10 back to the state because the procedure only costs the hospital $90 to perform; the state then uses it for non-Medicaid purposes. CMS spokesman Jeff Nelligan said that essentially the procedure then only costs $90, which would have lowered the federal governments share to $45.
Now the above example is legal, as long as another provider within the same type and class is receiving an amount lower than the upper-payment limit because all of the payments in the aggregate need to be within the payment limit. But the new rule would change that.
According to the CMS, the rule could affect payment structures to 1,153 hospitals that are operated by local governments or hospital authorities; 822 nursing facilities that have identified themselves as operated by counties, cities or governmental hospital districts; and 113 intermediate-care facilities for the mentally ill.
The U.S. Government Accountability Office and other federal watchdogs have issued reports citing instances where states and local governments have used the funds returned by the healthcare providers for costs outside the Medicaid program or to help draw additional federal dollars for other Medicaid program costs.
Larry Gage, president of the NAPH, said he agrees that Medicaid dollars should be spent only on the program itself and on treating the uninsured, he nevertheless added that public hospitals and the CMS itself have done a good job in self-policing as a way to stamp out fraudulent billing. CMS is trying to solve a problem thats three or four years out of date, he said. In the process, they are really screwing things up in states that dont have the problems of abuse that theyre targeting.