Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

Legislative Update

July 29, 2008

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

Medicare Legislation – HR 6331

• Reimbursement for CAH Lab Payments– Beginning 1/1/09 CAHs receive cost-based

reimbursement for clinical lab services• Physician Payment Fix

– Prevents a reduction and freezes 2008 fee schedule payment rates at current levels

• Medicare Rural Hospital “FLEX” Program– Extends FLEX program through Sept 30, 2010.

• Ambulance Services– For July 1, 2008 through 2009, reinstates add-on

payment for ground ambulance services; 3% for rural and 2% for urban.

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

HPSA/MUA Proposed Rule

• Proposed rule in Feb. 28, 2008 Federal Register

• Combines HPSA/MUP formula• Utilized “2 tier formula”

– Based upon population to provider ratio of 3,000:1• Several factors incorporated

– Barrier Free Population– Definition of Provider– High Need Indicator

– 2nd Tier excludes providers under certain programs• July 23, 2008 Federal Register withdraws

proposed rule• New proposed rule to be developed

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

RHC Proposed Rule• Proposed changes include:

– Location Requirements:• Be located in “non-urbanized” area• Be located in a shortage area (HPSA; MUA; Governor’s

designated shortage areas)• Provides exceptions to the location requirements

– Staffing Requirements:• Eliminates the restrictions on the RHC contracting with non-

physician providers

– Payment Requirements:• Revises pymt methodology to be consistent with statutory

requirements that set Medicare pymt at 80% of reasonable cost

– Health, Safety, and Quality:• Requires RHCs to establish a QAPI program

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

CAH Relocation GuidelinesCMS’ Formal Guidance • 75% Rule

– Same Service• Services available under similar terms/times

– Same Population• Zip Code Analysis; hospitals may use different methodology

– Same Employees• Medical staff, direct employees and FT contract staff count• J-1 visa; NHSC employees may be excluded• High turnover facilities may provide additional documentation

• Necessary Provider Designation – must meet same criteria

• CMS now provides preliminary determinations based on CAH letters of attestations and projections

• Final approval only will be granted once the hospital has relocated and evidence confirming compliance is provided

• Contact KHA if considering Relocation; Large Renovation

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

Legislative Outlook - 2009

• Health Reform (Part II?)– Tobacco tax increase– Statewide smoking ban– Premium Assistance or SCHIP

• “Medicaid Transformation”– Identified by KHPA– Subcommittee to discuss possibilities

• Workforce Related Issues– Wichita Center for Graduate Medical Education– Nursing/Allied Health Shortages

Kan

sas H

osp

ital A

ssocia

tion

Kan

sas H

osp

ital A

ssocia

tion

What Can You Do?

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

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