A divide concerning the number of uninsured under a reformed healthcare system and related reductions in federal payments to hospitals for treating them entered the political fray last week.
The numbers game
DSH payments, uninsured counts roil Senate
The dispute in the Senate throws into doubt a deal struck between the hospital lobby, a key senator and President Barack Obama.
In the meantime, lawmakers in the House inched closer to a vote on their bill.
In the Senate, a sweeping health reform package, drafted by its Finance Committee, calls for a $34.8 billion reduction in disproportionate share hospital, or DSH, payments. The American Hospital Association and two other groups already agreed to the cuts, but on the condition that at least 94% of people living in the U.S. would have coverage—and 97% of all U.S. citizens. The idea is that as more people acquire some level of coverage, the amount of uncompensated care that hospitals receive would decrease.
In July, the AHA, the Federation of American Hospitals and the Catholic Health Association agreed to $155 billion in cuts—an estimated $103 billion in inflationary updates and $50 billion from DSH payments—in exchange for certain protections from an independent payment advisory board and tweaks to rules that govern tax-exempt status (July 13, p. 8).
According to official estimates, the health reform package inked by Senate Finance Committee Chairman Max Baucus (D-Mont.) and currently being debated would cover 91% of those living in the U.S. and 94% of its citizens.
Those numbers fall short of what was negotiated, according to sources familiar with the deal who spoke on the condition they not be identified. The DSH cuts would go into effect in 2015, when the Congressional Budget Office estimates that only 91% of everyone living in the U.S. would be covered. The deal, according to sources, requires 95% covered. Separately, the CBO said that by 2019, there will be 14 million unauthorized immigrants in the U.S., with about 60% of them going without coverage.
A senior aide to Baucus confirmed that the hospital groups have expressed their concern, but said the deal hasn't been reworked. Still, all three associations have not endorsed the legislative framework.
On Capitol Hill, where the Finance Committee took the first steps toward a historic health reform vote, a Republican senator tried to override the reduction in DSH payments.
Sen. Orrin Hatch (R-Utah), who sponsored an ultimately unsuccessful amendment that would have reinstated the cuts, said he doesn't think the bill will cover as many people as some claim it will. “I still believe that it's going to be extremely difficult to achieve that goal.”
Hatch and senators from states with a high rural population were vocal backers of the amendment. “The hospital associations didn't represent all the hospitals,” said Sen. Jon Kyl (R-Ariz.), a member of the Republican leadership team. Kyl read from several letters from Arizona hospital executives saying they opposed the deal.
The committee is expected to continue negotiations on the bill this week. A source familiar with the deal, who spoke on the condition of anonymity, said the expectation is that the coverage numbers will change as the legislative package goes through the amendment process.
“This is fluid,” the source said. “The idea is that the Senate Finance Committee will get the numbers up.”
In the meantime, the House shifted back into action, with lawmakers saying that a bill could be finalized as early as this week. Still, a timeline is hard to muster because of a number of messy problems—the public option, immigration and abortion—still dog the three bills that have already passed preliminary legislative hurdles.
Rep. Stephanie Herseth Sandlin (D-S.D.) speculated that “some of the thornier issues” may not end up in a merged bill, but would not elaborate on what those issues would be.
The public plan remains a contentious issue, with Blue Dog Democrats insisting that negotiating rates with providers should be the vehicle for setting rates, as opposed to basing them on Medicare. Last week, CBO figures discussed with the staff of House Speaker Nancy Pelosi (D-Calif.) indicated that a public plan option in some form could save up to $90 billion over 10 years.
Pelosi insists a robust public option will appear in the final bill in the House, alluding that a “trigger” mechanism to jump-start a public plan option would more or less sell the option short.
As negotiations continue between the various Democratic factions, there is also the challenge of getting more Republicans onboard with the bill.
Some progress on the reform front took place when the House Energy and Commerce Committee wrapped up its work on additional amendments that will be considered for inclusion in the final package.
A number of provisions in this package would have a direct effect on hospitals, including an amendment that would direct states to establish laws requiring disclosure of information on hospital charges. It would also require hospitals and health plans to make such information available to the public.
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