Labor union concern over fallout on Obamacare is growing, report says

Wall Street Journal’s Streaming Coverage

President Obama is beginning to find an unlikely rival to his signature health-care overhaul initiative — labor unions.

By Russ Britt

The Hill reports that President Obama is beginning to find an unlikely rival to his signature health-care overhaul initiative — labor unions.

Several labor groups are concerned that implementation of the measure formally known as the Affordable Care Act will let their members fall through the cracks in the law and they’re calling for those to be patched up before the major portions of the bill go into effect next year, The Hill said in a report on Tuesday.

The publication that covers Washington politics said the 1.3 million-member United Food and Commercial Workers Union is worried that restaurant employees covered under multi-employer coverage known as Taft-Hartley plans. It seems that those plans, which cover 20 million people, are not be eligible for tax subsidies.

Therefore, employers may release their workers from those plans and let them pursue their own insurance on state-run exchanges. Democratic leaders, including outgoing Montana Sen. Max Baucus, are worried that troubles like these could result in a “train wreck” once the administration tries to pass the measure.

Further, other unions are concerned about the issue, including the United Union of Roofers, Waterproofers and Allied Workers, as well as the hotel workers’ union Unite Here and the International Brotherhood of Teamsters. And passing legislation to repair any fixes may be impossible with the current divisive climate in Congress.

UFCW President Joseph Hansen, in an accompanying op-ed piece for the publication, nevertheless said it is up to Obama to try and find a solution.

“We’d be open to a legislative fix, but ultimately this is the administration’s responsibility. They are leading the regulatory process. It’s their signature law,” Hansen wrote. “We don’t want a handout. Our members want to keep the healthcare they currently have. We just want them to be treated fairly.”

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Uncompensated Care Faces a Double Hit in Some States

Philip Betbeze, for HealthLeaders Media , May 22, 2013

Hospitals in states that opt not to expand Medicaid are at a severe disadvantage to their counterparts in other states, not only because they will miss out on additional Medicaid-based reimbursement, but also because they will face the same cuts in disproportionate share funding as everyone else.

This article appears in the May issue of HealthLeaders magazine.

Medicaid is widely regarded as a poor payer related to costs, but hospitals, especially the nation’s safety-nets, are eager to get more of their state’s residents on the plan nevertheless. That’s because Medicaid’s reimbursement rate, which varies by state, is much better than nothing at all, which is what many hospitals claim they get, in reimbursement terms, from treating the uninsured.

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But getting more of their patient mix from Medicaid patients rather than the uninsured will be difficult for those in states that have so far refused to expand their Medicaid rolls. Refusing expansion, of course, is their right, according to the Supreme Court’s 2012 decision on the constitutionality of the Patient Protection and Affordable Care Act, in which the Medicaid expansion is enfolded.

But doing so might not only transfer funding to states that do expand, but it also might leave safety-net hospitals with the same costs to treat the uninsured, while other sources of funding, such as disproportionate share dollars, are reduced over time.

As HealthLeaders went to press, 14 states still have refused to participate in the Medicaid expansion, which would take effect in 2014 and make adults with incomes up to 138% of the federal poverty level eligible to enroll.

The problem, say state governors who are resisting, is that although the federal government has agreed to pick up all of the tab for the first three years of expansion and 90% thereafter, there is no way to ensure that future Congresses will keep those promises, meaning states could be on the hook for more than they bargain for under current rules.

The problem for hospital leaders, however, is that if a state does not choose to expand, hospitals in those states will be forthwith at a severe disadvantage to their counterparts in other states not only because they will miss out on additional Medicaid-based reimbursement, but also because they will face the same cuts in disproportionate share funding that their counterparts in other states will see.

“The most vulnerable hospitals will be major safety-nets in urban areas that are currently treating patients who don’t have health insurance and that are dependent on local funding and disproportionate share funding,” says Bruce Siegel, MD, MPH, president and CEO of the National Association of Public Hospitals and Health Systems, a Washington, D.C.–based organization that lobbies on behalf of its members. “We’ll see this funding drop, and will also see continued pressure on the local funding side because of the economy.”

Those dollars lost will be significant, he adds. An NAPH study released late last year found that hospitals could face an increase in uncompensated care costs of $53.3 billion by 2019 if a substantial number of states do forego expansion, coupled with an estimated loss of $14.1 billion in disproportionate share funding.

For most safety-net hospitals, many of which already get by on local tax subsidies, such a drop in revenue could be devastating not only for them but for other hospitals in their states, which would presumably see increased bad debt and funding shortfalls where treating the uninsured is concerned.

Revenue issues apply statewide
Safety-net hospitals will initially bear the brunt of their states’ decisions not to expand, says Siegel.
“If you’re a hospital today that has mostly paying patients and very little charity care, you should be okay, at least in the short term,” says Siegel, who previously served as president and CEO of Tampa General Healthcare and also of New York City Health and Hospitals Corporation. “You’re not counting on coverage expansion and you don’t need disproportionate share and you’re probably not getting much of it right now anyway. But if you’re a safety-net hospital, you have potentially the worst of all
possible worlds.”

For John Haupert, CEO of Atlanta’s 650-staffed-bed Grady Health System, that could mean an annual loss of tens of millions in reimbursement for an already fiscally challenged public hospital system.

By 2016, when disproportionate share funding scales back to 50% of its current levels, “we lose $45 million a year,” he says.

But on a longer-term basis, other hospitals will also be negatively affected.

“All hospitals have skin in this game,” says Siegel. “A lot of hospitals maintain their margin because of the safety-net taking the uninsured, and if that goes away, they will bear the brunt. That’s not a secret to them, but still a threat.”

The haves and have-nots
Though the states that have so far refused still can accept Medicaid expansion, safety-nets in states that refuse expansion are likely to be most at risk.

And though Grady’s Haupert expects much to change in coming years surrounding the Medicaid expansion, he and his board are having to make long-term plans to deal with lots of potential challenges. And it’s frustrating to them that hospitals are in a political fight they didn’t ask for.

“Already we get a disproportionate unfunded mandate. That’s our mission and we have some local tax support, but the bigger issue for us is that the way the law is written, you’re going to give back 50% of your disproportionate share funding even if they don’t expand,” Haupert says.

“The diabolical thing is we have an uncertain insurance expansion and a certain cut in disproportionate share,” echoes Siegel.

If nothing changes, that would mean huge disparities in how much reimbursement similar safety-net hospitals in other states would get versus hospitals in states like Georgia.

“Many say this is too good of a deal to pass up because if the feds don’t deliver on paying for the expansion, you can unwind it,” says Haupert. “Our reality, though, is that I don’t see us expanding immediately.”

For Haupert and his board, that means serious consideration of cuts in services, and with a $45 million annual hole to fill, and it’s not idle talk to discuss eliminating money-losing services, like behavioral health, he says.

“We’ll eliminate or reduce clinical services, period,” Haupert says. “One example I gave to the governor [Republican Nathan Deal] personally is that Grady is the state’s second-largest provider of mental health [care]. If this happens, can we continue to provide it? We could save $25 million to $30 million a year by not doing it, but what does that do to the state? In this case the law of unintended consequences is significant.”

Other hospitals in less populated areas of the state, he predicts, will simply close.

“We have 15 hospitals that will close if the state does not expand its Medicaid program or we don’t get the disproportionate share funding issue resolved, and I don’t see too many governors who want that on their hands,” he says.

Many of the states that are so far rejecting the Medicaid expansion are the same ones that are not planning on setting up insurance exchanges on their own. Though both pieces of the legislation have serious implications for hospital revenue, the delays that are expected to surround states that aren’t setting up exchanges could have a knock-on effect on revenues for hospitals in those states.

Hard lobbying
Like Haupert, Siegel says hospital leaders need to take their issues straight to their governors and paint the picture. He says it can be effective to partner with businesses to push for the expansion.
“Not expanding is an act of fiscal insanity. This is a core economic issue,” he says. “States that do not expand are literally taking their federal tax money and giving it to other states. It’s hurting patients and small businesses in your state.”

But some governors seem steadfast, at least for now. That’s why, in parallel, NAPH and hospitals that will be affected by the disproportionate share funding drop are working on possible modifications to that piece of the law. But as Haupert says, hospitals are caught in the middle of two government entities engaging in high-stakes brinksmanship.

“Someone’s going to have to blink,” he says. “HHS is going to use the disproportionate share issue to the final minute to get the s and years, especially surrounding adjustment of the disproportionate share cuts.

“All of us should be working really hard to educate our governors and congresspeople about the reality of the DSH cuts,” Siegel says. “That will take some time. Right now, the reductions are still a few years out—they don’t start getting big until after 2016, but in an atmosphere of gridlock, it’s hard to get action until a disaster is about to occur.”

Of course, if modifications are made to disproportionate share funding to help alleviate the burden on hospitals in states that won’t expand, some might see it as a reward for political intransigence.

“If they let the number of uninsured drive the calculation, they’ll have to take disproportionate share money away from states like New York and California and give it to states like Texas,” Siegel says, “which would be ironic. There are lots of carrots and sticks in play here.”

Reprint HLR0513-5

This article appears in the May issue of HealthLeaders magazine.

House Lawmakers Grill CMS Over Health Exchange Navigators

Margaret Dick Tocknell, for HealthLeaders Media , May 22, 2013

The role of navigators, expected to help millions of uninsured make their way through the health insurance market, came under fire Tuesday by members of Congress who raised questions about oversight and the role of the IRS in the implementation of healthcare reform.

A meeting of the House Committee on Government Oversight and Reform called ostensibly to discuss the role that navigators and assistors will play in the enrollment process for new health insurance marketplaces included statements and questions about role the IRS is expected to play in the implementation of healthcare reform.

See Also: What About the Insurance Exchanges?

The meeting veered further off topic into concerns over the fundraising efforts of Kathleen Sebelius, the secretary of the Department of Health and Human Services.

Rep. Jim Jordan (R-OH), chair of the Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs, set the Republican tone in his opening comments. “In light of the revelations of the IRS targeting conservative groups… it is crucial for the American people to understand that Obamacare tasks the IRS with enforcing nearly 20 new tax laws. That’s amazing to me. The very organization charged with enforcing Obamacare was systematically targeting conservative groups that came into existence because they oppose Obamacare.”

Jordan stated that the IRS role in enforcing Obamacare is tied to the navigator and assistor program through the premium subsidies that will be available to qualified individuals. “If [they] incorrectly fill out a person’s health insurance application, and that person receives subsidies to which they are not entitled, then the IRS will go after the individual.”

He went on to note that as part of “Obamacare, the IRS is building the largest personal information data hub that the federal government has ever attempted.”

On the Democratic side reaction was swift and pointed. “Until recently I thought that the difference between us and a Banana Republic was that in this country once a law is passed or the Supreme Court has spoken, the law was the law even when our side lost,” said Rep. Eleanor Holmes Norton (D-DC).

“Republicans are still fighting the Affordable Care Act as if it is not the law of the land… Today’s hearing is merely an effort to continue to obstruct the law and the right of citizens to health insurance.”

Amid the posturing on both sides of the aisle, the sole witness, Gary Cohen, deputy administrator and director for the Center of Consumer Information and Insurance Oversight for the Centers for Medicare & Medicaid, soldiered on. His five-minute statement focused entirely on how navigators are expected to help millions of uninsured make their way through the complicated health insurance market.

While the marketplaces hold the promise of being places where consumers will be able to easily compare costs, benefits, and cost-sharing to select a plan that is right for them, Cohen stated that “ensuring that consumers and businesses participate in the marketplaces requires that they learn about the benefits that these marketplaces have to offer and that they get the help they need to take advantage of those benefits. This is a significant undertaking. We know quite a bit about the uninsured American we need to reach: many have never had health insurance, so the transaction of selecting, applying, and enrolling in healthcare coverage will be unfamiliar…20% have not completed high school. To effectively reach these populations…information must be provided by people connected to the community in an appropriate manner.”

He noted that navigators and assistors will operate much like insurance brokers and agents and agents already do today—educating consumers about the marketplaces and insurance affordability programs, comparing plans, helping consumers receive eligibility determinations, and enrolling in coverage.

Felons as navigators?
Rep. James Lankford (R-OK), chair of the Subcommittee on Energy Policy, Healthcare, and Entitlements, asked about basic requirements to become a navigator. “Has HHS mandated criteria for individuals who would be navigators? Could felons, individuals convicted of identity theft, or high school dropouts become navigators and handle sensitive and personal information? Is there an expectation that a navigator will have any prior knowledge of the health insurance market? Is there an oversight plan?”

In his statement, Cohen noted that HHS has extensive experience providing outreach and enrollment assistance in Medicaid, the Children’s Health Insurance Program (CHIP), and Medicare. “CMS designed navigator and in-person assistance grant programs that will allow qualified and well-trained individuals and organizations help consumers find and enroll in healthcare coverage, while adhering to standards and requirements designed to ensure that taxpayer money is used appropriately.”

HHS has earmarked about $54 million to fund navigator in federal or state marketplaces. Cohen said the opportunity is open to the self-employed as well as community and consumer-focused non-profits. Trade, industry, and professional associations, commercial fishing industry organizations, ranching and farming organizations, chambers of commerce, unions, and licensed insurance agents and brokers may also apply.

The CMS Office of Acquisitions and Grants Management will oversee the review and evaluation of the grant applications. Grantees must also complete a 20-30 hour training program and pass an exam.

“I’m a dentist and I don’t see how 20 hours of training will get this done. That’s inadequate. What are the checks and balances on the education component?” asked Rep. Paul Gosar (R-AZ). “Is someone visiting with that navigator or is [the training] all online? What stops a convicted felon from becoming a navigator?”

“It’s online just as it is in many states for insurance agents and brokers,” responded Cohen. “If you look at the type of organizations that will apply for these grants I don’t think felons will be a problem.”

In his final comment Rep. Jim Jordan again turned his attention to the IRS. “The American people want to know what role the IRS will play in their healthcare and the implementation of the Affordable Care Act. As an American, does the IRS role in this scandal trouble you?

“The IRS has a significant role in enforcing tax provisions of the Affordable Care Act, but there’s more to the ACA than just tax questions” noted Cohen. He added that he didn’t see a connection between the navigator programs and the IRS monitoring conservative groups.

Concerns about Sebelius’s fundraising
Rep. Lankford (R-OK) then turned to media reports that Secretary Sebelius is soliciting funding for the assistor program from health plans, hospitals and pharmaceutical companies to donate to nonprofits responsible for outreach efforts. “These actions unduly pressure private companies to financially support implementation and promotion efforts. Fearing HHS retribution if they don’t contribute. The secretary must stop using unethical methods to fund the law’s implementation.”

“I have no knowledge of her calls,” responded Cohen. He added that public-private partnerships are often used to help fund projects.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.

Doctor shortages may undercut Kentucky Medicaid expansion

Flood of patients is a concern

May 21, 2013   |
Written by
Laura Ungar
The Courier-Journal

Dr. Ron Waldridge II sees up to 24 patients a day at a busy family practice in Shelbyville, and says he can’t take on any new ones unless they are family members of people he already treats.

So he wonders how he and other Kentucky doctors will be able to handle the tens of thousands of Kentuckians expected to get Medicaid coverage through health reform.

“On the one hand, you’d love to see universal coverage,” the second-generation family physician said. “But I don’t think there’s a lot of open space for people getting insurance to find a new doctor.”

Gov. Steve Beshear’s recent decision to expand Medicaid opens the program to 308,000 residents earning 138 percent of the federal poverty level or less, and officials estimate that 332,000 more uninsured residents can gain coverage using new insurance marketplaces called exchanges.

But Kentucky’s longstanding physician shortages, combined with refusals by some doctors to take new Medicaid patients because of low reimbursements, threaten to undercut those efforts — particularly in rural areas.

The result might affect not only the newly insured but other patients who potentially face longer waits to see a doctor or specialist.

Data analyzed by The Courier-Journal shows that Kentucky counties that will see the largest portion of nonelderly residents become eligible for Medicaid often have fewer primary care doctors per capita. Casey County, for example, has the highest portion of newly eligible residents at 13.5 percent, but it ranks in the bottom third for doctors per capita.

Experts say expanding community health centers serving low-income patients, and creating more teams of health care workers may help but won’t solve the problem.

Similar issues plague rural states across the nation, said Peter Cunningham, senior fellow at the Center for Studying Health System Change, based in Washington, D.C.

“Rural areas simply don’t attract enough physicians,” he said. “In a lot of places, there’s already strained capacity, and this is going to strain it even more.”

Demand and supply


The federal government lists 192 areas in Kentucky — including 47 counties — with shortages of health professionals. Kentucky Health Facts listed about 10,000 physicians in the state in 2009, including 4,200 in primary care.

“We can’t grow physicians fast enough to meet the need, in the rural areas especially,” said Susan Zepeda, president and chief executive officer of the Foundation for a Healthy Kentucky.

The state Cabinet for Health and Family Services plans a briefing on the health care work force today, during which officials will discuss results of a study by Deloitte Consulting intended to address the issues.

Officials would not release the study early, but the cabinet and Beshear’s office said in a joint statement that “issues around access to health care and workforce capacity have been a concern for a number of years in Kentucky.”

Shelby County, where Waldridge practices, ranks in the bottom half of counties for primary-care doctors per residents. Waldridge said he and the partners in his practice, which is part of KentuckyOne Health, have about 10,000 patients, about 15 percent of whom are on Medicaid. Waldridge said he personally sees about 1,700 patients.

As a state, he said, “the physician manpower issues we deal with should have been addressed before this.”

Other doctors and nurses shared similar concerns, with some saying patients may turn to emergency rooms because they can’t find primary care doctors.

“I’m not sure who’s going to pick up all those (new) patients into their practices,” said Julianne Ewen, a nurse practitioner in Lexington and president of the Kentucky Coalition of Nurse Practitioners and Nurse Midwives.

The problem is less acute in Louisville, which has one of the state’s highest rates of primary care doctors compared with population, and where hospital systems, such as Norton Healthcare, Baptist Health and KentuckyOne Health have been expanding their primary care networks.

“We think we can absorb a significant number” of new patients, Norton Chief Executive Officer Stephen Williams said.

Waits and crowding are “certainly a potential problem,” Williams said. “But 300,000 (new Medicaid patients) are going to be spread across the entire state. I doubt this will turn into a huge problem — although there may be pockets.”

Patients, payments

Doctors and nurses said another complicating factor is that newly insured patients tend to be sicker because they’ve delayed getting needed care.

Angela Estes, 43, of Columbia, an assistant at a nurse-practioner-only primary care office in her hometown, is uninsured but eligible for Medicaid under the expansion. She gets primary care at her workplace but has been putting off getting a mammogram, updated MRI scans for headaches associated with a neck injury, and recommended sinus treatment that would cost about $7,000.

With Medicaid, she said, “I’ll be able to hopefully get the care for things I need.”

But how quickly will they get it?

Doctors said patients who have put off care may need longer appointments, referrals for specialized care or hospitalizations — pushing up patient loads across the board.

Complicating matters, not all doctors take new Medicaid patients.

According to a 2012 study in the journal Health Affairs, 79 percent of office-based physicians in Kentucky, and 69 percent nationally, accepted new Medicaid patients in 2011.

State statistics show that the portion of Medicaid-registered primary-care providers currently accepting new Medicaid patients ranges from 81 percent to 99 percent, depending on the managed-care company.

Medicaid traditionally has reimbursed providers at lower rates than other types of insurance. Ewen, who said about a third of patients are on Medicaid, said the reimbursement is only $23 for a lower-level visit by an established patient.

The health reform law includes an incentive for more health providers to take Medicaid — an enhanced reimbursement rate for 2013 and 2014 at least equal to Medicare reimbursements. But health care workers said that is only temporary.

Addressing problem

A possible long-term solution includes greater reliance on community health centers, some say.

Family Health Centers in Louisville plans to renovate portions of the Phoenix Health Care for the Homeless site and relocate the East Broadway site to an adjacent building, making room to eventually see 10,000 new patients. Officials there said last May that they received $5.4 million in federal health reform grants for these projects.

At Park DuValle Community Health Center, meanwhile, Chief Executive Officer Anthony Omojasola said “none of our four sites are operating at full capacity right now, so we plan to absorb some of that surge in demand.”

Another solution is to attract more nonphysician health care providers, such as nurse practitioners, to areas lacking doctors. But not everyone agrees on how to do that.

Ewen and Beth Partin, who co-owns the practice where Estes works, said the state’s 2,800 nurse practitioners shouldn’t need “collaborative agreements” with doctors that are now required to prescribe nonscheduled drugs such as blood pressure medications. Partin said such agreements put practices in jeopardy if a doctor dies, moves or charges a large signing fee.

Physicians, however, have long argued that those agreements are essential. Cory Meadows, director of advocacy and legal affairs with the Kentucky Medical Association, talks about expanding care with nonphysicians in a “physician-led, team-based approach.”

“If we team up together to take care of people, we may not be as short of manpower,” Waldridge said.

Some health care leaders said the growing array of walk-in clinics, such as Baptist Express Care in Walmart stores, provide another avenue for care, at least for minor illnesses.

And hospital officials said they plan to continue expanding primary care and employ telemedicine. Ruth Brinkley, president and chief executive officer of KentuckyOne Health, for example, said her system is looking to open new primary care offices and hire more staff.

Meanwhile, Dr. David Dunn, vice president for health affairs at the University of Louisville, said the university is increasing physician training in such areas as family medicine and geriatrics and using funds from partner KentuckyOne to expand the nursing work force with professionals, such as advanced nurse practitioners.

Health providers and advocates agreed that getting more people insured should produce a healthier population in the end. But they said much remains unknown, including how many of those eligible for coverage under health reform will sign up for it.

“The more people we can get into the health care system, the more people get care. It not only saves and improves lives, but it also reduces costs,” said Norton’s Williams. “It’s going to be a positive over the long term. But I think there will be a learning curve and an experience curve.”

Reporter Laura Ungar can be reached at (502)582-7190 or on Twitter @lauraungarcj.