1

Legislative Update

2

National Health Reform Update

• Senate HELP Bill– Detail missing

• Senate Finance– Three options papers set the stage– OMB scores “draft” at $1.6 billion; target <$1

Billion– White House involvement

• House Tri-Committee Bill– Productivity Offsets– No DSH cuts; includes physician self-referral

3

Hospitals Reach Agreementon Health Reform

• Stakeholders Involved:– White House– Senate Finance Chairman Max Baucus (D-MT)– AHA – Catholic Health Association– Federation of American Hospitals

• Caps hospital spending cuts to $155 billion over 10 years– AHA estimates that hospitals would see

reduced uncompensated care of at least $171 billion over 10 years

4

Key Elements of the Agreement

• Coverage– Starting in 2013, policies will be implemented

to expand coverage to 95% of all Americans, and require a mandatory employer contribution and an individual mandate

• Hospital Spending Reductions– $155 billion over 10 years

• Market basket cuts (-1.0% per year over 10 years)• No DSH cuts for 5 years

– Reductions begin in 2015– After 10 years – 60% preserved

• Reduction in payments for Hospital Readmissions– Focus on “avoidable” cases – Related to the initial admission

5

Key Elements of the Agreement• Public “Exchange”

– Details to be forthcoming• Delivery System Reforms

– Value-based purchasing provisions that are budget neutral

– Bundling – pilot project– Restrictions on physician self-referral– Medicare-approved slots for physician GME is

increased• Tax-Exempt Status

– Maintains the community benefit standard for hospital tax-exemption

• No formulas or tests on the amount of charity care provided

6

Kansas “Health Reform” Initiatives

PASSED:• Increased CHIP coverage to 250 percent of the

Federal Poverty Level• Dental Coverage for Pregnant WomenFAILED:• Premium Assistance ProgramSTILL AVAILABLE:• Statewide Smoking Ban, plus Tobacco Tax• Additional Assistance for Small Businesses • Health Care Transparency• Medical Home Model• Expanded Coverage for Adults

7

Implications of the State Budget

• Revenues continue to plummet– May/June 09 revenues $126 million below projections

• Governor’s July 2009 Actions– $90.6 million in spending cuts (2 percent cuts)– $70 million in new revenues– $700 million in certificates (internal borrowing)

• Current Environment for KHPA– Increasing backlog of Medicaid applications– Reduction in staff – Lack of resources to implement new policies

• Further Reductions in KHPA Budget– Unlikely to be absorbed through Medicaid Ops– Decrease in Medicaid provider reimbursement rates?

8

Changes to the KHPA

• New Leadership– Dr. Andy Allison, Ph.D. as KHPA Executive

Director– Dr. Barb Langner, Ph.D. as Medicaid Director

• Agency Dilemma– Whether to focus solely on the operations of

the Medicaid program OR continue providing policy recommendations on health initiatives

• Legislative Changes to KHPA– Independent vs. Governor-led– Medicaid Operations vs. Health Policy

9

Next Steps…

• Meet with your Legislator– Invite to hospital– Need help, let KHA know

• Find the connections– Trustees– Staff– Other community members