AHA pushes HHS on Medicaid questions

Hospitals pressed HHS this week to address a range of Medicaid-related uncertainties created by the U.S. Supreme Court's decision on the federal healthcare overhaul.

The Aug. 20 letter from the American Hospital Association to HHS Secretary Kathleen Sebelius primarily sought details on a range of payment issues for hospitals, including the fate of cuts in disproportionate-share hospital payments (PDF) also included in the Patient Protection and Affordable Care Act.

The letter was in response to the court's June 28 decision that struck down penalties in the law for states that did not expand their Medicaid programs' eligibility to all residents with incomes of up to 133% of the federal poverty level, including leeway up to 138% of the federal poverty level. But the court's decision threw into question a host of Medicaid-related provisions.

Three of the 12 questions the AHA submitted to Sebelius focused on the DSH payments, including whether providers in states that did not expand their Medicaid eligibility would still face those reductions.

Hospital advocates have repeatedly said they agreed to the DSH cuts only on the promise that vastly expanding Medicaid enrollments would sharply reduce their numbers of indigent-care patients. The letter reinforced their fear that the court's decision will leave them without the newly covered patients while still facing the payment cuts.

The AHA also probed the possibility that HHS would allow incremental expansions of Medicaid, which is an approach many cost-conscious governors have asked about.

The limited written and verbal guidance issued to date by HHS and the CMS has indicated some state flexibility, including the ability of states that expand their eligibility under the healthcare law to cut the eligibility in the future.

The speed with which many of the outstanding questions will be answered has been one of the biggest concerns for providers. For instance, the AHA letter asked whether HHS and the CMS plan to issue the Medicaid-related decisions through the complex rulemaking process, simple letters to state Medicaid directors or other means. Some critics of the healthcare law have said many of the Medicaid-related clarifications would amount to new regulations and so must go through the time-consuming rulemaking process, which could throw off the implementation schedule.