1

Federal Advocacy

2009

2

Congressional Activity on Reform

3

ProcessSenate

Currently debating bill

House Approved reform bill on

November 7

Alternatively, a bill approved by either chamber could be “ping-

ponged” between each chamber

until an identical bill is passed by

both.

Option 2

Option 1

4

Comparing Reform Proposals

5

Coverage Expansion

6

Coverage Expansion–How?

7

Major Financing ComponentsSenate: Cost = $848 billion. Fully offset over ten years. *

House: Cost = $1.052 trillion. Fully offset over ten years. *

* Reflects gross cost of coverage expansions based on CBO

scores.

8

Hospital and Health System Reductions

House and Senate are generally consistent on the level of hospital cuts, with approximately $155 billion in Medicare

and Medicaid reductions over ten years.

House: $258 billion over ten years.

Senate: $244 billion over ten years.

9

Key Hospital and Health System Provisions

10

Medicare Update Factor Reductions

11

DSH Reductions

12

Hospital Readmissions

13

Hospital Value-Based Purchasing

14

Geographic Variation

15

Independent Medicare Advisory Board

16

340B Drug Discount Program

17

Medicare Payment Bundling

18

Accountable Care Organizations

19

Medicaid Payment Demos

20

Additional Provisions in Both House and Senate Bills

21

Rural Provisions in Senate Version Only

• Rural Community Hospital Demonstration Project– Extends demonstration project for two additional years and

expands eligibility to all states

• Medicare Rural Hospital Flexibility Program– Extends the FLEX program through 2012

• Clinical Diagnostic Laboratory Services– Reinstates provision that pays rural hospitals with less than 50

beds reasonable cost for clinical diagnostic laboratory services

• Other provisions:– Extend MDH classification for two additional years– MedPAC review of Medicare payments for rural areas– Expansion of community health integration models in rural areas

22

State Advocacy

23

What’s the Focus for 2010…

• State of Kansas Budget

• State of Kansas Budget

• State of Kansas Budget

24

Status of the Kansas State General FundFY 2009-2012

-$1,000

-$800

-$600

-$400

-$200

$0

$200

FY 2009 FY 2010 FY 2011 FY 2012

Mil

lio

ns

ARRA Funding Ends

25

Governor’s Budget Adjustment for SFY 2010 Total: $258.9M SGF

1. Targeted, strategic budget reductions in individual agencies

2. Reduce highway maintenance funds by $50M3. Reduce state funding to Bioscience Authority by $5M4. Reduce K-12 funding by $36M; Board of Regents

funding by $2M5. Move unspent funds from prior years to SGF6. Reduce Medicaid reimbursement rates by 10% ($22M

savings)

26

Governor’s Medicaid Cuts SFY 2010

• Across-the-board Medicaid rate decrease of 10 percent

– Rate reduction expected to be carried into SFY 2011

• Impacted Agencies:

– KHPA

– Ks Dept on Aging

– SRS

– Juvenile Justice Authority

• Each agency may have some discretion

KHPA

Targeted Rate Reduction Amount:

$40.4 M (AF)

Hospital $19 M (AF)

Physician $4.7M (AF)

Pharmacy $8.5 M (AF)

Dental $2.2 M (AF)

27

KHA Advocacy Strategy

• Legislature unlikely to address SFY 2010 budget• Legislative focus will be on SFY 2011 budget• Continue discussions with KHPA, elected officials• Discuss impact and strategy with other health care

associations• Develop advocacy materials

– Model cuts for individual hospitals– Share examples of the impact on hospital operations– Economic impact of cuts

• Review all options– Revenue enhancements– Focused budget cuts

28

Nursing Home Provider Tax

• Purpose is somewhat unclear...– To improve quality?– To improve payments?– To improve access?– To improve non-NH services?– Just cause…

• Variety of legislation introduced since 2003• KHPA requested workgroup to consider

– Disagreement between Nursing Home Associations• Issues to consider

– Who’s included in the tax– How is the tax calculated – How are the funds used

• KHPA Board to consider possible legislation

29

Tort Reform – Awaiting the Decision

• Current law has been in place since 1980’s– Limits cap on non-economic damages at $250K

• Two court cases are challenging the “constitutionality” of the law

• Kansas Supreme Court will decide• Possible Rulings

– “Unconstitutional” – “Constitutional”– Legislative action needed

30

Health Care Data Transparency

Community Benefit

Pricing

Quality

•CMS’ Price Release

•MedPAR DRG Report

•Negotiated Insurance Rates

•Individual Hospital Estimates

•American Hospital Directory

•Consumer Checkbook

•Insurance Database

•Top 25 Inpatient/Outpatient Procedures

•CMS’ Hospital Compare

•AHRQ Quality Indicators

•JCAHO’s Quality Check

•HFAP

•Leapfrog

•Health Grades

•WI CheckPoint

•Insurance Initiatives (BC/BS Distinction Hospitals)

•Healthcare Acquired Infections

•Kansas Healthcare Collaborative

•IRS 990 Form

•CHA/VHA Model

•CBISA

•Rural Health Works

31

Statewide Smoking Ban

2007:Clean Indoor Air Legislation Introduced

- No hearing or action taken

2008:Clean Indoor Air Legislation Heard in Senate Committee

- KHPA announces support

-Two bills heard; but no action taken by either committee

2009:Clean Indoor Air Legislation re-Introduced

-Senate passes legislation twice

-Legislation stalls in House

2010:Focus on the House

- Will a compromise be reached?

32

Questions…