Region’s hospitals, insurers keep close eye on impact of federal decision

9:21 PM, Mar. 26, 2012  |  

Written by

Laura Ungar for the Louisville Courier-Journal

It’s been cited as a driving force behind the proposed but thwarted merger involving University Hospital and a Catholic health care system.

It’s inspired new partnerships called “accountable care organizations,” including one being piloted by Norton Healthcare and Humana.

And it’s been hailed as providing extended coverage for more than 35,000 young adults in Kentucky.

The federal health reform law has already started making an impact locally — so area health advocates and officials are tuned in to this week’s Supreme Court proceedings.

“I think the entire health care sector and insurance sector are watching this closely because it has significant implications on both industries,” said Stephen Williams, chief executive officer of Norton. “This is very far-reaching.”

Jodi Mitchell, executive director of Kentucky Voices for Health, a coalition of health advocacy groups, said her organization takes no position on the arguments before the Supreme Court, instead concentrating on educating the public about health reform. But she added: “We expect the law will be upheld.”

One of the most well-known provisions of the Affordable Care Act, as the reform law is called, requires insurers that offer coverage to children on their parents’ plans to make that coverage available until the child is 26.

That portion of the law took effect in September 2010. According to the U.S. Department of Health & Human Services, 35,610 young Kentuckians already have gained coverage through that provision. In Indiana, 38,480 young adults gained coverage.

“This is helpful for college students going to school who can’t afford coverage,” Mitchell said. “And because they’re generally healthy, they’re advantageous on plans where you’re trying to spread out the risk.”

This week’s arguments before the Supreme Court won’t involve that provision, nor several others of the broad-ranging law, but instead will focus on a key and controversial provision — requiring nearly all Americans to have health insurance by 2014.

According to the U.S. Census Bureau, an average of 15.5 percent of Kentuckians — or 663,000 people — lacked health insurance from 2008-2010, as did 12.8 percent of Hoosiers, or 813,000 people. Nationally, 15.8 percent of Americans lacked health insurance during that period.

Health care experts say the reform law eventually would bring the rate of uninsured Americans down by about 60 percent.

Louisville-based Humana Inc., one of the nation’s largest health insurers, said it has long supported universal health coverage for all Americans.

And the company said that other parts of the reform law, such as requiring insurers to cover all applicants regardless of their health condition, cannot work without the “individual mandate” provision. Otherwise, healthy people could pass up insurance while sicker people would get it, raising premiums for all.

Officials at local hospital systems, which provide charity care for many uninsured patients and have unpaid bills from others, have said projections of how many people would gain coverage under the reform law are encouraging.

But they add a caveat — saying it’s unclear if projected gains in patients who would get insurance under health reform would be offset by funding reductions in a state and federal program for hospitals that treat large numbers of low-income people.

Officials at University Hospital, which cares for large numbers of uninsured patients, talked about this uncertainty during the debate involving the proposed merger with Jewish Hospital & St. Mary’s HealthCare and Lexington-based St. Joseph Health System, which is part of Catholic Health Initiatives of Denver. Gov. Steve Beshear ultimately rejected the proposed three-way merger, and Jewish and St. Joseph merged without University to create KentuckyOne Health.

Officials at those health care organizations — as well as others such as Norton and Baptist Hospital East — have said the reform law encourages them to partner with others to become more efficient, improve care and reduce costs.

Norton and UK leaders said the law is one of the main reasons behind their partnership, announced in June. That partnership includes a statewide stroke collaboration and a cancer program that would share resources.

Norton and Humana are also piloting an “accountable care organization” for commercially insured patients, a program that establishes financial incentives for health care providers to improve quality, eliminate waste and control costs. Louisville is one of four national sites in the ACO Pilot Project of The Engelberg Center for Health Care Reform at the Brookings Institution and The Dartmouth Institute for Health Policy and Clinical Practice. Officials said the program brings a emphasis on wellness and preventive care for patients.

Last October, the U.S. Centers for Medicare & Medicaid Services finalized new rules under the health reform law to help doctors and hospitals better coordinate care for Medicare patients through ACOs. The Medicare program is designed to reward ACOs that lower the growth of health care costs while still providing quality care.

Williams said Norton will still go forward with the ACO and partnerships no matter what happens with the health reform law.

“Even if major parts of it get repealed, I believe what we are doing and what other providers are doing we will continue to do,” he said. With health care expenditures making up 18 percent of the Gross Domestic Product in the United States, “we have to bend the cost curve or we are going to cripple the economy.”

SOURCE:

http://www.courier-journal.com/article/20120326/NEWS01/303260073/Region-s-hospitals-insurers-keep-close-eye-impact-federal-decision-

Why Medicaid Is No Longer a Voluntary Program

Why Medicaid Is No Longer a Voluntary Program

BY Jeffrey A. Singer

It is widely believed that Medicaid is a voluntary program. While this may have once been true, it is no longer the case. Today, states confront the dilemma of having to choose between joining Medicaid or being forced to sacrifice any health care “safety net” for their indigent populations. This is all because of a law enacted by Congress in 1986 called the Emergency Treatment and Labor Act (EMTALA).

In 1986, Congress passed EMTALA, making it a federal crime to transfer a patient from one hospital/emergency room to another for financial reasons. It compels hospitals to render care, even without any compensation.

EMTALA led to an explosion in uncompensated care. It became common knowledge that, if a person presents to a hospital emergency department, the hospital must provide care and may not transfer the patient elsewhere without the patient’s permission. This became a major cause of “cost-shifting,” as hospitals and doctors tried to recoup their losses from uncompensated care by raising their fees on insured patients.

Many doctors resigned from emergency room coverage, tired of rendering uncompensated care to people who might turn around and sue them for malpractice. EMTALA forced many hospitals to close their emergency rooms.

But EMTALA did more. It killed the voluntary nature of the Medicaid system.

Four years before the passage of EMTALA, Arizona still had its own state-run indigent care program.

Arizona law required each county to establish a comprehensive indigent care system. Maricopa County, home to metropolitan Phoenix, maintained a system of health clinics staffed with full-time physicians. At its heart was the Maricopa County Medical Center, a full-service teaching medical center, including a trauma center and the largest burn unit in the southwest. Patients who were seen in private hospitals and needed hospitalization were transferred over to “County.”

The system provided preventative care, prenatal care, mental health, and long-term care. Eligibility was tied to income and assets. Patients presenting for the first time as an emergency would be treated and retroactively enrolled in the system.

I was a surgical resident at “County” (1976-81). It was commonplace for a doctor at some other hospital to phone me and say, “I have an indigent patient in my emergency room who has an ‘acute gallbladder’ and who doesn’t have insurance. Can I send her over to you?” Like all of my fellow residents, I would enthusiastically accept the patient (we were a teaching hospital and wanted the experience). They would get prompt treatment, supervised by full-time faculty, cared for in a ward setting.

This system worked well and was popular. But in 1982, after pressure from various factions, Arizona became the last state to join Medicaid.

Today, if Arizona decided to leave Medicaid and resume its pre-Medicaid system, it couldn’t do so. EMTALA would prevent it from functioning. EMTALA specifically bans any hospital from transferring patients for financial reasons. Arizona’s pre-Medicaid system depended upon the transfer of indigent patients from private centers into its indigent health system, thus relieving private hospitals and providers from the burden of constantly providing uncompensated care.

Last year, when 26 states and the National Federation of Independent Business challenged, in federal court, the Patient Protection and Affordable Care Act (“Obamacare”), they argued there was no constitutional authority for the so-called “individual mandate.” But they also challenged the authority of the PPACA to require states to expand their Medicaid rolls, and thus their Medicaid budgets.

The plaintiffs claimed that compelling the states to increase the amount they spend on Medicaid was a federal “commandeering” of the states’ treasuries.

Medicaid is a voluntary program, said the Feds. If the states opt in they receive matching funds of 50% or more from the federal government to fuel the system. But nothing prevents the states from opting out of Medicaid, so state sovereignty is not being usurped.

The states responded that the loss of federal matching funds resulting from an opt-out would be so severe as to amount to coercing the states to stay in the program.

The District Court, and later the Appeals Court, didn’t buy this part of the states’ case. While they agreed that the “individual mandate” is unconstitutional, they didn’t see the state Medicaid mandates as usurping state sovereignty.

The U.S. Supreme Court recently agreed to hear the case in the spring of 2012. And it will revisit the Medicaid issue. Hopefully, at that time, the EMTALA factor will finally get the attention it deserves.

If a state opts out of Medicaid, it forfeits federal matching funds amounting to anywhere from 40% to 60% of the state’s Medicaid budget. It is fiscally impossible for the state to create anything remotely resembling Medicaid using solely state funds without imposing massive tax increases on its residents, as well as draconian cuts in other services.

But if a state chose to leave Medicaid and adopt a less extravagant, more cost-effective, county-based indigent care system, like Arizona enjoyed until 1982, it couldn’t do that either. How, for instance, can an indigent patient be transferred to the County Medical Center or any of the satellite County treatment centers for financial reasons? It would be a violation of EMTALA.

By banning the transfer of indigent patients to indigent care facilities, this 1986 federal law unintentionally denies states the freedom to exercise their traditional sovereign powers to design their own cost-effective forms of indigent care.

EMTALA leaves states no real choice. Any choice to opt out of Medicaid effectively forces them to abandon indigent health care delivery.

EMTALA is the heretofore-unnoticed 800-pound gorilla in the room that just might secure the argument that “Obamacare” violates state sovereignty.

Jeffrey A. Singer, MD practices general surgery in metropolitan Phoenix, writes and lectures on regional and national public policy, and writes for Arizona Medicine (the journal of the Arizona Medical Association).


SOURCE:
To view this article by Jeffrey A. Singer for The Hawaii Reporter in its original context, please visit http://www.hawaiireporter.com/why-medicaid-is-no-longer-a-voluntary-program/123