NCHA Update Ronnie Cook Financial Services Consultant
Agenda Key 2016 Legislative Priorities Medicaid Reform Payor Update Regulatory Update
Key 2016 Legislative Priorities Certificate of Need (CON) - Preserved Taxes Protected Graduate Medical Education - Restored Behavioral Health Funded Medicaid Reform - Submitted
Certificate of Need Certificate of Need Determines placement of facilities and services based on population shifts Around since the 1970s. Multiple efforts to repeal or carve out. Eliminating CON would cost NC Hospitals an estimated $533 million per year.
Taxes North Carolina Non Profit health systems receive a refund on sales taxes. Effort every year to reduce the amount. Current cap of $45 million. Municipalities would like an option to tax the property of non-profits
Graduate Medical Education 2015 required elimination of Medicaid GME Restored in 2016 as long as funds are available. Essential for Medicaid transformation
Behavioral Health Issues: Involuntary commitment Payment models do not incentivize community based care EMTALA No where for patients to go
Behavioral Health 2016 budget Governor s taskforce Funded construction of community based crisis centers Set aside funds for rural behavioral health beds that are either new construction or conversion from existing acute care beds.
Medicaid Reform - DHHS Timetable 9
Hospital Supplemental Funding Base Rate 60% Supplemental Funds 40% Hospitals rely on supplemental funding for as much as 40% of their Medicaid payments. The State also relies on supplemental funds for their budget. 10
The Future of Supplemental Payments CMS must approve the 1115 waiver, including how supplemental payments are handled CMS has recently pushed some other states seeking 1115 managed care waivers towards other forms of payments CMS issued a rule in late April, 2016 that appears to phase out supplemental payments over a 10 year period, beginning in 2017 11
Other Aspects of Reform Commercial managed care companies will compete with regional provider-led entities to provide services The vast majority of Medicaid services will be under capitation (eventually) LMEs and Dual Eligibles are carved out initially Plans will be regulated by DOI and DHHS DOI will regulate financial solvency DHHS will regulate network adequacy and general insurance-related issues 12
PLE Regions (Draft as of March 1, 2016) 13
Moving Parts/Challenges CMS negotiations with the State will define the waiver CMS views, rules on supplemental funding are crucial Impact on provider rates still unknown with so many variables in play CMS may raise issue of Medicaid expansion Carve-outs of services: Dual eligibles are exempted in first round of waiver LMEs (mental health) will continue under their own capitated system for 4 years after capitation begins; creates challenges for hospitals and other providers in aligning whole patient care 14
Moving Parts/Challenges Managed Care companies may seek legislation or regulatory changes adverse to hospitals For example, preventing a hospital from being in both a statewide provider-led health plan and forming its own regional PLE plan 2016 Elections: changes in governance (federal or state) could impact waiver negotiations, rules, RFPs, contracts, etc. 15
Payor Update Medicare Provider Workgroup Medicaid Technical Advisory Workgroup VA Workgroup Managed Care Committee Network Adequacy Workgroup (NCDOI)
Payor Update CY 2017 ACA Market Update Medicaid Payment of Inpatient Rehabilitation Services Reference Based Pricing Products
State Health Plan CY 2017 Medicare Advantage Update For CY 2017, moving to one Medicare Advantage carrier, UnitedHealthcare (UHC) and providing three plan options for Medicare retirees Members enrolled in Humana Medicare Advantage Plan for 2016 will have to take action during Open Enrollment Plan staff recommended assigning all Humana members to the UHC Base Plan for Open Enrollment. Members who take no action will remain in the UHC Base Plan for 2017.
Regulatory Update NOTICE Act Delayed Notice of Observation Treatment and Implication for Care Eligibility Act requires hospital and CAHs to provide: Written and oral notification to beneficiaries receiving observation for more than 24 hours Medicare Outpatient Observation Notice (Moon) to beneficiary Notice is required to be provided no later than 36 hours after observation is initiated, or sooner if the individual is transferred, discharges, or admitted as inpatient
Regulatory Update NOTICE Act Delayed CMS significantly revised proposed MOON Removed physician name, date and time observation was initiated, hospital name, QIO contact information Added field for specific information as to why patient was in observation vs. inpatient Provided required and recommended items for Addition Information section
Regulatory Update NOTICE Act Delayed NOTICE Act requirements were originally set to take effect August 6, 2016 MOON subject to Paperwork Reduction Act and must undergo 30-day review and comment period After MOON has been finalized, providers have 90 calendar days to implement Expected effective date January 1, 2017
Regulatory Update Site Neutral Certain off-campus PBDs would be permitted to bill for excepted services under OPPS Excepted items and services are: All items and services furnished in a dedicated emergency department Items and services that were furnished and billed prior to November 2, 2015 Item and services furnished in a hospital department within 250 yards of hospital or remote location of the hospital No exception for under construction
Regulatory Update Site Neutral Service Expansions, Relocations, and Changes of Ownership Additional items and services beyond those within the clinical families of services furnished and billed prior to November 2, 2015 will not be excepted services An excepted off-campus PBD will lost its excepted status if it changes location New owners accepting the existing Medicare provider agreement from the prior owner, the PBD may maintain its excepted status
Regulatory Update Site Neutral CMS proposes one-year transitional policy while it explores changes to allow PBD to bill Medicare under Part B payment system During this period, CMS will pay physicians furnishing services in PBD at the higher nonfacility PFS rate No payment made directly to hospital by Medicare
Questions? Ronnie Cook rcook@ncha.org 919-677-4225