Regulatory and Legislative Update

HFMA Heart of America Chapter

Missouri Update

HFMA – Heart of America Chapter

Kim Duggan and Andrew Wheeler

Anthem Blue Cross Blue Shield Medical Necessity Policies

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Anthem Blue Cross Blue Shield Policies

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Anthem Emergency Room Medical Necessity

“Services for minor conditions will not be covered when treated in the hospital emergency department if more appropriate settings are available.”

MHA concerns

EMTALA

Patient becomes the “clinician”

Strengthening prudent layperson standards

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Anthem Outpatient Imaging

CG-MED-55 – AIM Specialty Health will review requested level of care for CT and MRI Services

Effective July 1

MHA concerns

Quality of imaging equipment

Specialized personnel

Support needed to treat patient emergencies (i.e. reactions to contrast media)

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Anthem ER CT / MRI Utilization

Conduct retro-reviews of all MRIs, CTs of the abdomen, CTs of the pelvis and combination CTs abdomen and pelvis

Effective November 15

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Disproportionate Share Hospital Audit Litigation

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Update On DSH Audit Litigation

MHA filed suit against the Centers for Medicare & Medicaid Services in the United States District Court for the Western District of Missouri on March 22, 2017.

MHA is challenging the audit methodology imposed by CMS for the 2011 and 2012 DSH audits.

In 2010, CMS issued “Frequently Asked Questions” guidance on calculating hospital-specific DSH limits, requiring offset of Medicare and third-party payments.

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Update On DSH Audit Litigation

MHA asserts that this methodology is a substantive change in the cost calculation which must be promulgated as a formal rule.

The suit further contends that any such rule would be ineffective, as it clearly violates the plan text of the Medicaid Act.

Similar suits are pending in the District of Columbia, New Hampshire, Tennessee and Minnesota.

Two courts have issued preliminary rulings in favor of the hospital and hospital association plaintiffs.

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Update On DSH Audit Litigation

MHA’s goal is to compel CMS to derive hospital-specific DSH limits without the offsetting payments, which would greatly benefit the majority of members.

Oral arguments were heard on the parties’ summary judgment motions on October 3.

We are the only DSH audit case that does not have a named hospital plaintiff so there may be an issue on whether MHA has standing. However, MHA has clear standing to challenge the FAQs.

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Update On DSH Audit Litigation

CMS explicitly conceded, on the record, that the rule can only be effective from 2017 forward. The CMS attorneys tried to argue at the outset that the rule merely clarified existing policy that was also expressed in the FAQs, but at the end of their argument, they conceded that if the judge throws out the FAQs and leaves the rule intact, the methodology will apply from 2017 forward.

MHA expects a ruling in a month or two.

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Preliminary Draft Results of Disproportionate Share Hospital Audits –

SFY 2014

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Preliminary Draft State Fiscal Year 2014 DSH Audit Results

The results of the preliminary draft SFY 2014 DSH audit submitted to MHD on September 28 show Missouri hospitals have longfalls (DSH payments that exceed the CMS-defined allowable DSH costs) totaling $94.9 million, shortfalls (DSH payments that are less than the CMS-defined allowable DSH costs) of $148.3 million, resulting in shortfalls in excess of liabilities of $53.4 million.

These results are subject to change in the final audit as well as the outcome of the pending DSH audit litigation

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DSH Longfalls and Shortfalls SFY 2011 through SFY 2014*

* The SFY 2011 through SFY 2013 data is based on the results of the independent DSH audits filed with the Centers for Medicare & Medicaid Services. The 2014 draft audit was provided by Myers and Stauffer, L.C. as of September 28, 2017, and is subject to change.

Note: State Institutions of Mental Disease (IMDs) have been excluded from the above figures.

$154.0

$131.6$118.6

$94.9

$40.3

$99.7

$135.7$148.3

0

20

40

60

80

100

120

140

160

180

SFY 2011 -Actual

SFY 2012 -Actual

SFY 2013 -Actual

SFY 2014 - DraftAudit

Mil

lio

ns

Hospital DSH Longfalls Hospital DSH Shortfalls

50

39

68

57Hospit

als

48

40 Hospit

76 Hospi

46 Hospital

s

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Number of Hospitals With DSH Longfalls and Shortfalls

SFY 2011 through SFY 2014*

* The SFY 2011 through SFY 2013 data is based on the results of the independent DSH audits filed with the Centers for Medicare & Medicaid Services. The 2014 draft audit was provided by Myers and Stauffer, L.C. as of September 28, 2017, and is subject to change.

Note: State Institutions of Mental Disease (IMDs) have been excluded from the above figures.

57

46

39 40

4850

68

76

20

30

40

50

60

70

80

SFY 2011 - ActualSFY 2012 - ActualSFY 2013 - Actual SFY 2014 - DraftAudit

Nu

mb

er

of

Ho

sp

ita

ls

DSH Longfalls DSH Shortfalls

39

40 Hospit

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Preliminary Draft State Fiscal Year 2014 DSH Audit Results

Once again, this means no federal dollars will be sent back to CMS, but it also means there likely will not be enough DSH recoupments to fully fund the DSH shortfall payments.

The FRA Policy Committee will begin its review of the SFY 2014 Pool Policy Directives after the final DSH audit is submitted to CMS at the end December.

The hospital-specific DSH estimates likely will not be available until the spring of 2018.

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Impact of Federal DSH Allotment Reductions on Missouri

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Impact of Federal DSH Allotment Reductions on Missouri

Under current federal law, reductions in states’ Medicaid DSH allotments became effective October 1.

Missouri’s estimated DSH cut for SFY 2018 totaled $77.1 million. However, because of the unavailability of assessment in prior years, the state had already reduced DSH payments to a level that approximates Missouri’s allotment after the 2018 DSH reduction.

Unless Congress repeals or delays the future DSH allotment reductions, hospitals can expect a significant reduction in DSH payments for SFY 2019.

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Impact of SFY 2018 Federal DSH Allotment Reduction on Missouri

Federal DSH Allotment Reduction Took Effect

October 1, 2017

Missouri DSH Payments Were Slightly Reduced To Ensure Compliance With Federal DSH Allotment

Reduction

Less FRA Assessment Was Needed To Fund Payments:

•FRA Tax Rate Lowered to 5.70% effective July 1, 2017

•FRA Tax Rate Lowered to 5.50 % effective October 1, 2017.

Medicaid Direct Payments Were Reduced Because the

Medicaid Share of FRA Assessment Was Lower

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Missouri Medicaid Managed Care

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

As you may recall, Missouri expanded it’s Medicaid managed care program statewide effective May 1.

Because of the significant shift of FRA funds to managed care, MHA Management Services Corporation entered into a Memorandum of Understanding with the three health plans on March 17.

The MOU established an agreed-upon process for distributing the direct Medicaid add-on payments in a manner that complies with CMS’ guidance while maintaining the financial stability of MHA’s members.

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

As outlined in the MOU, each health plan first calculates the total monthly amount of FMP included in its capitated payments from MHD by taking each member multiplied by the FMP for each of the related rate cells which are split between inpatient and outpatient.

Example of Monthly Total FMP Calculation*

Membership

Capitated Members 250,000

Maternity/NICU 25,000

FMP Included In Capitation

Inpatient $8,000,000

Outpatient $2,000,000

Total FMP Dollars Received in Capitation $10,000,000

+/- Monthly Adjustments ($0)

= FMP Funds Available for Distribution $10,000,000

* The detailed rate cell calculations for each of the 275,000 members to arrive at the $10 million FMP is not included in this example.

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

You will notice that the KICK and NICU payments are included in the total FMP available for distribution to hospitals.

Each health plan then calculates the distribution of the FMP payments to individual hospitals based on projected and/or actual utilization for both inpatient and outpatient services depending on whether the hospital has a signed agreement with the health plan.

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

Example of Monthly Inpatient Distribution of FMP Payments to Hospitals

HospitalIP Direct Medicaid

Payment as A Per Diem

Inpatient Utilization (Estimated Days)

Estimated Inpatient Amount

Inpatient Proportional Share

of Total

Inpatient FMP to Be Distributed of $8,000,000

A $1,480 13,000 $19,240,000 67.31% $5,385,160

B $975 6,500 $6,337,500 22.17% $1,773,828

C $895 550 $492,250 1.72% $137,778

D $1,675 1,500 $2,512,500 8.79% $703,234

E $0 300 $0 0.00% $0

Total $28,582,250 100.00% $8,000,000

X = X

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

Example of Monthly Outpatient Distribution of FMP Payments to Hospitals

HospitalOutpatient Medicaid

Payment as A Percentage

Outpatient Utilization (Estimated Charges)

Estimated Outpatient Amount

OutpatientProportional Share

of Total

Outpatient FMP to Be Distributed of $2,000,000

A 2.5% $45,000,000 $1,125,000 50.02% $1,000,444

B 1.1% $6,000,000 $66,000 2.93% $58,693

C 0.9% $12,000,000 $108,000 4.80% $96,043

D 3.8% $25,000,000 $950,000 42.24% $844,820

E 0.0% $0 $0 0.00% $0

Total $2,249,000 100.00% $2,000,000

X = X

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

Some hospitals question why they are impacted by the KICK and NICU encounters when they don’t deliver babies or have NICUs in their facilities. As reflected in the example, the KICK and NICU payments are included in the FMP which is distributed proportionately to all participating hospitals.

Lower than anticipated managed care enrollment is contributing to FMP payment shortages.

MHD plans to change the allocation of days (fee-for-service vs. managed care) to address this issue.

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Missouri Medicaid Managed Care Full Medicaid Pricing Payments

As part of the MOU, the parties agreed to create an FRA Work Group that includes representatives from each managed care plan and MSC staff.

The purpose of the FRA Work Group is to evaluate alternative methodologies for the projected Medicaid direct payments for managed care as permitted under federal regulation to transition to a more value-based and quality-centered payment.

MSC staff will be reaching out to its members to identify areas of concern or “pain points” as the transition occurs.

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MHA Solicits Feedback on Medicaid Managed Care

To access the Medicaid Managed Care Feedback Form, follow these steps:

Visit www.mhanet.com

Hover over Advocacy in the navigation menu

In the dropdown box, click on Regulatory

Click on the blue heading, entitled “Medicaid”

Click on “soliciting feedback”

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Budget “Efficiencies” Initiative

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Budget “Efficiencies” Initiative

Governor Greitens directed the Department of Social Services to find $30 million in Medicaid savings for nonspecific “efficiencies.”

DSS has developed a discussion list of hospital savings ideas for SFY 2018, 2019 and indefinite.

MHA provided comments to DSS regarding the savings ideas.

DSS has taken no actions to implement hospital efficiencies to date.

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Reauthorization of FRA

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Reauthorization of FRA

The state laws authorizing the various provider taxes, including the hospital Federal Reimbursement Allowance, expire September 30, 2018, and must be reauthorized during the next legislative session.

The FRA statutes have been reauthorized 12 times since the original 1992 enactment.

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FRA Tutorial

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Access to the FRA Tutorial

An FRA Tutorial is available on the MHA website. To access the tutorial, follow these steps:

Visit www.mhanet.com

Hover over Advocacy in the navigation menu

In the dropdown box, click on FRA

Click on the second tab, entitled “FRA Tutorial”

Click on “Start the FRA Tutorial”

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Access to the FRA Website

You can access your hospital-specific forms and the MHA

Management Services Corporation pooling policies and procedures by visiting the FRA Tutorial or the following website:

https://www.mhanet.com/docshare

Enter Username and Password

Click on Download

Click on FRA for Hospital-Specific Forms

Click on Info for Pooling Policies and Procedures

For assistance contact khasenbeck@mhanet.com

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HOA HFMA ChapterKHA Update

October 26, 2017

2016 Primary/General Election Results

Key Races…- Won 40 out of 47 races

- 26 out of 33 House seats- 14 out of 14 Senate seats

Key Races…- Won 70 out of 84 races

- 44 out of 50 House seats- 26 out of 34 Senate seats

Recap of Priority Issues in 2017

• KanCare Expansion– Bill introduced to establish the KanCare Bridge to a

Healthy Kansas Program– House Bill 2044: Passed the Kansas House 81-43;

Passed Kansas Senate 25-14; Vetoed by the Governor

• Reversing the Medicaid Cuts– Bill passed to increase the HMO privilege fee from

3.31% to 5.77% to restore the 2016 payment cuts effective July 1, 2017

– Restores the 4% rate reduction for inpatient and outpatient hospital services, 4% Disproportionate Share Hospital and Graduate Medical Education reduction, and restores the inpatient DRG outlier payment threshold to 75% from 55%

– CCR on HB 2079: Passed Kansas House 101 to 18; Kansas Senate 32-5; Signed by the Governor

Restoring the Medicaid Provider Cuts

Recap of Priority Issues in 2017

• Reforming the KanCare Program– Legislation passed to require certain reforms and

compliance to the KanCare program, including standards for credentialing, prior authorization and the appeals process

– Senate Sub for House Bill 2026: Passed Kansas Senate 37-3; Passed House 119-5; Signed by the Governor

• Maintaining Policy on Concealed Carry– House Bill 2278: Passed the Senate 24-16; Passed the

House 91-33; Enacted without Governor’s signature

Legislative ScorecardResults of the 2017 Session

• 100% Voting Record in Favor of KHA Position:• 74 House members• 21 Senate members

• 50% to 99% Voting Record in Favor of KHA Position:• 18 House members• 11 Senate members

• 0% Voting Record in Favor of KHA Position:• 4 House members

• Reps. Kevin Jones, Randy Garber, Blake Carpenter and John Whitmer

• 2 Senate members• Sens. Dennis Pyle and Mary Pilcher-Cook

Potential Issues for Next Year…

Hospital Provider Assessment Program KanCare Reforms

Changes to Medicaid Provider Rates

Sports Head Injury Act (Concussions)

Telemedicine and Telehealth

KanCare Expansion

Palliative Care Task ForceOpioid Abuse and Prevention

Rural Health Care Models

Assault of a Healthcare Provider

Tobacco Tax Increase

Elimination in Tax Exempt Status

Dental Midlevel

Behavioral Health

Kansas Medicaid

KanCareThe Transformation of Medicaid in Kansas

KanCare – Effective Jan. 1, 2013– Transition to 100% managed care for all services and

populations under a Section 1115 Waiver

– Kansas Department of Health and Environment (KDHE) and Kansas Department of Aging and Disability Services (KDADS) oversee the program

– State contracts with 3 private managed care organizations (MCOs)

• Amerigroup of Kansas

• Sunflower State Health Plan (Centene)

• UnitedHealthcare of the Midwest

– The goals of the KanCare program are to improve overall health outcomes while slowing the rate of cost growth over time

KanCareHow Does it Work?

• Each Medicaid consumer is assigned to a MCO

• MCOs are required to coordinate all of the different types of care a consumer receives

oMCOs subcontract for services such as psych, transportation, etc.

• MCOs contract with providers for in-network services

• The health plans focus on ensuring that consumers receive the preventive services and screenings they need and ongoing help with managing chronic conditions

• Additional value-added services

KanCare Implementation Issues• Contracting

• Prior authorization requirements

– New to KanCare

– Backlog and delays in response

• Billing and reimbursement issues

– Claims not be paid timely or correctly

– Changes in billing

• Confusion for Medicaid consumer

2017 Kansas Legislative Session• KanCare Reform and Compliance

– Requires MCOs to provide accurate and uniform patient encounter data to participating health care providers

– Requires quarterly education by the MCOs

– Requires KDHE Secretary to develop standards to be utilized uniformly by each MCO for credentialing, prior authorization, claims denials, and appeals process

– Requires KDHE to procure an independent auditor to review, at least annually, a random sample of all claims paid and denied

– Creates an independent third-party appeals process in 2020

Status: Senate Substitute for HB 2026 was signed by the Governor.

KanCare Reform and Oversight• Lt. Governor’s KanCare Process Working Groups

– Grievance and Appeals

– Claims, Billing and Prior Authorization

– Data Transparency

– Patient Experience

• KHA’s KanCare Technical Advisory Group– Monitoring accounts receivable over 90 days

– Continue to work with KDHE on policy changes, billing issues, reduction in administrative burdens, etc.

• Provide Testimony to KanCare Legislative Oversight Committee

• Legislative Post Audit Review

KanCare 2.0 Timeline• 2017

– August: KDHE submitted request for one-year extension to KanCare with no changes to the current program. Comment period ends on September 10. NEWS: CMS approved extension request on Oct. 13

– September: KDHE meets with KanCare provider groups to hear comments and provide input on KanCare renewal (KanCare 2.0).

– Fall: Public meetings held.

– November: Request for Proposal to be released for KanCare 2.0.

– December 31: Current KanCare Waiver ends.

• 2018– January 1 through December 31: KanCare one-year extension period.

– Mid-year 2018: KDHE announces successful bidders for KanCare 2.0.

• 2019– January 1: KanCare 2.0 begins.

KHA and Kansas Medical SocietyRecommendations on RFP

• Reimbursement Rate Sustainability/Improvement

• Reduction of Administrative Burden

• Payment Integrity

• Data Integrity and Transparency

• Outcomes Accountability and Integrity

• Quality-Based Simplification

• Increased Care Coordination Between Patients, Providers and Payers

• Other

Health Care Access Improvement Program(Provider Assessment)

• Implemented by the 2004 Legislature, started in 2005• Tax of 1.83% on net-inpatient revenues for PPS hospitals in 2010

– Approximately $47 million is collected from hospitals and matched with federal Medicaid dollars for a total of $110 million available in the fund annually

• Only PPS hospitals pay the tax, but all hospitals benefit– All hospitals receive a 23.6% increase in rates for all inpatient DRGs and thousands outpatient

services provided by both hospitals and physicians– PPS hospitals receive UC payments based on prior year’s uncompensated care costs

• Hospitals must complete a UC Pool survey annually to determine eligibility for specialty characteristics (NICU, Trauma Center, inpatient psych, etc.)

• Health Care Access Improvement Panel oversees the program and fund distribution– 3 members appointed by the Kansas Hospital Association– 2 members licensed to practice medicine and surgery appointed by the Kansas Medical Society– 1 member appointed by the Kansas Association for the Medically Underserved– 1 member from each of the Medicaid HMOs– 1 member representing KDHE appointed by the Governor

• Panel is required to provide an annual report to the Legislature

Current Issues with the Program• Inability of KDHE to provide verifiable data on the

actual expenditures from the fund– The expenditures are calculated as a percentage of the

per member per month payments to the KanCare MCOs, but KDHE is unwilling to share the percentages.

• Certain Legislators are concerned about overspending of the fund– This concern is based on KDHE reports which cannot be

verified

• CMS scrutiny regarding the distribution of the UC pool to PPS hospitals– Response: KHA Board has created a Medicaid Provider

Assessment workgroup to resolve the identified problems and recommend program changes to the board.

Kansas Medicaid DSH

• Under current federal law, reductions in states’ Medicaid DSH allotments became effective October 1.

• Estimated DSH cut for Kansas for SFY 2018 totaled $9.4 million (all funds).

• KDHE reduced 2018 DSH allotments to reflect this reduction.

Medicaid DSH Steering Committee

• KHA Task Force to review DSH State Plan Amendment and make recommendations for changes.

– Potential changes to the Medicare Inpatient Utilization Rate (MIUR) for qualifying for DSH

– “Cliff Provision” for loss of eligibility for DSH payment

– Transition the “Hold Harmless” provision for CAHs to a CAH DSH pool

Osawatomie State HospitalDecember 2016

• KDADS sends out RFPs for privatization of OSH

• Only one response meets the deadline

– Correct Care Solutions is based in Nashville

July 1, 2017

• Medicaid Psychiatric Observation Code S9485 requested by KHA becomes effective

• CODE pays $750/day for up to 3 days to hospitals holding psych patients awaiting transfer

August 15, 2017

• Adair Acute Care Unit preliminary CMS survey completed; no deficiencies found

• (Adair is a 60-bed unit separated from rest of OSH)

Osawatomie State Hospital

August 2017• KDADS Sec. Keck hosts multi-city mtgs. re: privatization of OSH;

states 12 OSH beds will be added in September 2017• Keck shares plan to build new 210-bed hospital on OSH grounds;

will continue to use 60 beds at Adair for total of 270 beds at cost of $175 million. Correct Care Solutions would manage the new hospital. State would own it after debt paid.– (In 2016, law passed requiring approval of Kansas Legislature before

privatizing OSH and/or Larned).

September 2017• OSH bed capacity increased to 154 beds

– Had been at 146 beds since June 2015 when moratorium started and bed capacity was cut from 204 to 146. OSH continues to admit only involuntary patients.

– KDADS to host strategic planning session re: OSH and Adair Acute Care Unit. KHA invited to participate.

Regulatory Concerns with KDHE

Sept. 2017• KHA sent memo to KDHE outlining major concerns in six

areas:– Risk management/peer review reporting changes (to licensing

agency and KDHE), KDHE will only communicate with designated risk manager, lack of annual risk management plan approval (as required by law)

– Timeliness of State Survey results and lack of feedback on receipt & approval of Plans of Correction

– Difficulty getting architectural plan approval– Changes to registering births for unmarried parents; Information

being sent to DCF for ALL infant births to unwed parents– Joint KHA/KDHE annual hospital survey being questioned – Overall lack of timely communication

Kansas Political Environment

Incoming Governor Jeff Colyer, M.D.• Governor Jeff Colyer, M.D. is a fifth generation

Kansan from Hays. • Dr. Colyer served as a White House Fellow

under President Ronald Reagan and President George H.W. Bush in international affairs.

• Elected to the Kansas House of Representatives in 2006 and the Kansas Senate in 2008.

• Dr. Colyer led the Kansas Medicaid transformation, which will save Kansans $1 billion over 10 years, while increasing services. This was done without reducing provider payments and has actually increased the number of Kansans covered by the new KanCare managed care program.

• Dr. Colyer and his wife, Ruth, have been married since 1991 and have three daughters Alexandra, Serena and Dominique.

2018 Governor’s Race

2018 Governor’s Race

It’s Already Started…2018 Primary Elections

Recognition of Legislative Champions

Opportunity to recognize those legislators that have been champions

on health care and hospital issues

FEDERAL ADVOCACY BRIEFING

Public Perception on

the Priority Issues for Congress

Key Advocacy Positions on ACA Replacement

• All states should be treated fairly regardless of the status of being an “expansion or non-expansion” state.– Removal of the March 1, 2017 deadline– Funding should be equitable

• Coverage must be maintained for all individuals currently insured.• Protections must be in place for those with pre-existing conditions and

ensure they can afford meaningful coverage to get the care they need.• The ACA should be replaced with a simultaneous replacement

guaranteeing adequate coverage.• Medicaid restructuring (i.e. block grants and per capita caps) should be

not be used as a vehicle to make budget cuts in an already under-funded program.– Flexibility should be provided to states that have reformed their Medicaid

programs

• Rejection of any further Medicare and Medicaid reductions in payments for hospital and health system services.

Iterations of “Repeal and Replace”• American Health Care Act (AHCA)

– Major Provisions: Repeals individual/employer mandate; Repeals Medicaid expansion match 12/31/19; Includes March 1, 2017 cut-off for Medicaid expansion; Adds $10B over 5 years for safety net funding; Allows per-capita caps (based on 2014 baseline)/block grants in 2020; Delays Medicaid DSH reductions until 2020

– Passed U.S. House 217-213• Kansas: All four congressional members voted YES• Missouri: Six of eight congressional members voted YES - Representatives Graves,

Hartzler, Long, Luetkemeyer, Smith and Wagner

• Better Care Reconciliation Act (BCRA) v. 1– Major Provisions: Repeals individual/employer mandate; Maintains enhanced

FMAP for expansion through 2020 and then 3 year phase down; Includes March 1, 2017 cut-off for Medicaid expansion; Adds $10B over 5 years for safety net funding; Includes per-capita caps (based on 8 consecutive quarters) and block grants in 2020; Reduces provider taxes to 5% ceiling; Provides more flexibility to states under 1332 waiver

– Senate vote delayed

Current Law

KS as non-expansion state under BCRA

The Difference…Medicaid cuts in future

Iterations of “Repeal and Replace”

• Better Care Reconciliation Act (BCRA) v. 2– Major Provisions: Same as v. 1 but new amendments added. Cruz

amendment allowed insurers to sell non-ACA compliant plans; Change DSH formula to be based on “uninsured” rather than “Medicaid” recipients

– Fails on 43 to 57 vote • Kansas: Roberts votes Yes; Moran votes No

– Moran Statement: » “There are serious problems with Obamacare, and my goal remains what it has been for

a long time: to repeal and replace it. This closed-door process has yielded the BCRA, which fails to repeal the Affordable Care Act or address healthcare’s rising costs. For the same reasons I could not support the previous version of this bill, I cannot support this one... We must now start fresh with an open legislative process to develop innovative solutions that provide greater personal choice, protections for pre-existing conditions, increased access and lower overall costs for Kansans.”

• Missouri: Blunt votes Yes and McCaskill Votes No

• “Skinny” Repeal– Major Provisions: Repeals individual/employer mandate; medical device tax– Fails on 49-51 vote

• Kansas: Roberts and Moran vote YES• Missouri: Blunt votes Yes and McCaskill votes No

Iterations of “Repeal and Replace”• Graham-Cassidy

– Major Provisions: Repeals individual/employer mandate; Repeals Medicaid expansion on 12/31/19; Transitions Medicaid to a Per Capita Cap/block grant funding model; Lowers cap on Provider Taxes to 4 percent; Modifies key protections for patients and consumers

– Arguments against G-C from Republican Senators included:• Lack of Congressional Budget Office “score” • Moving forward without “regular” process• Does not include a “bi-partisan” effort

– In the end, Senate Leadership could not cobble together 50 votes

So, Now What?

President Trump’s Actions

• Executive Order that directs the Departments of Treasury, Labor and HHS to consider proposing regulations or guidance to:

– expand the availability of association health plans;

– short-term limited duration insurance; and

– health reimbursement arrangements.

• Elimination of the Health Insurance Subsidies on the Exchanges

Direct SupervisionLegislation introduced (H.R. 741/S. 243) introduced to permanently extend moratorium on non-enforcement of direct supervision requirements- Kansas: co-sponsored by Jenkins, Marshall- Missouri:

In the proposed OPPS rule, CMS includes a 2-year moratorium on enforcement on direct supervision requirement (however, it does not address CY 2017)

“Dear Colleague” letter spearheaded by Congresswoman Jenkins asking CMS to make its enforcement moratorium on direct supervision permanent- Kansas: signed by Congresswoman Jenkins,

Congressmen Yoder, Congressman Marshall and Congressman Estes

- Missouri:

Children’s Health Insurance Program

CHIP is funded by annual appropriations included in the bills that authorize the program.

When last authorized by MACRA 2015, the program was funded for two years – FY 2016 and 2017.

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Children’s Health Insurance Program

CHIP funds are allotted to the states and adjusted annually for changes in cost, as measured by the National Health Expenditure Data, and for changes in participation.

In even numbered years, allocations are based on the prior year’s grant. In odd numbered years, allocations are based on the state’s actual spending.

A CHIP Contingency Fund provides additional funds to states that encounter a shortfall.

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Children’s Health Insurance Program

MACRA 2015 continued an increase in the CHIP enhanced match rate of 23 percent (in addition to the states’ existing enhanced CHIP match rate commonly referred to as the E-FMAP) up to 100 percent that was first authorized by the Affordable Care Act and continued in previous CHIP reauthorization.

MO E-FMAP is usually about 74 percent; with the 23 percent ACA bump, CHIP match was increased to 97 percent

KS E-FMAP is usually about 69 percent; with the 23 percent bump, CHIP match increased to approximately 92 percent

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Children’s Health Insurance Program

Under current law, new CHIP allotments are not available after FY 2017 and unspent FY 2017 CHIP allotments that remain available for expenditures in FY 2018 are reduced by one-third.

Unless CHIP funding is extended, all states are expected to exhaust their federal CHIP funds during FY 2018; this includes unspent CHIP funding from prior years.

Three states (Arizona, Minnesota and North Carolina) and the District of Columbia are projected to exhaust their funds by December 2017.

Both Missouri and Kansas are projected to exhaust federal CHIP funds by March 2018 if new funding is not approved.

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MACPAC 2017 analysis as of June 2017 www.macpac.gov

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Children’s Health Insurance Program

Both the House and Senate are moving forward with CHIP reauthorization bills presently:

Senate: KIDS Act of 2017 (S 1872) – Marked up and voted out of House Energy and Commerce on October 4, 2017 (bipartisan approval)

House: HEALTHY KIDS Act of 2017 (H.R. 3921) – Marked up and voted out of House Energy and Commerce on October 4, 2017 (party line vote – Democrats objected to budget offsets included in the House bill)

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Children’s Health Insurance Program

Both bills include provisions that are favorable to the states and children’s health.

Funding for five years (2018 – 2022)

Extension of ACA-provided 23 percent bump up in E-FMAP for 2018 and 2019, and an 11.5 percent bump up in 2020

Extension of the requirement that states maintain their current eligibility limits for kids through 2022

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Extenders

September 30

Medicare dependent hospital

Low-volume expanded definition

Delay on 25% patient threshold for LTCH

LTCH moratorium

December 31

Work GPCI floor

Therapy caps exception

Home health PPS rural add-on

Ambulance provisions

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What is next for CMS?

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340B Drug Discount ProgramThe 340B Drug Pricing Program is a Critical Program to Kansas and Missouri Hospitals

77 Kansas and 70 Missouri hospitals have signed up to participate in the 340B program

Proposed OPPS Rule reduces payments for 340B drugs from ASP + 6% to ASP -22.5%

“Dear Colleague” letter circulating among House and Senate Members

- Kansas - signed by Moran, Marshall, Estes

- Missouri – signed by seven of eight members

Medicare Disproportionate Share

CMS finalized the transition from Medicaid days and SSI to utilizing cost report worksheet S10 to distribute uncompensated care payments

Missouri will receive $15.5 million more in FY 2018, $34.3 million in FY 2019 and $53.6 million in FY 2020

Kansas will receive $1.4 million more in FY 2018, $3.2 million in FY 2019 and $5.4 million in FY 2020

91

S10 Revisions

CMS is allowing hospitals to submit updated cost report years 2014 and 2015 data until October 31. CRY 2016 revisions must be submitted by September 30, 2018

Transmittal 11 – September 29

Effective for cost reports beginning on or after October 1, 2013

Revised, modified, clarified and added lines

92

Federal and State Officials Hear a Drumbeat for Health Care Change

Public and private sector demands for:

Lower or stable costs or premiums

More accountability

Less fragmentation of services

Better value, efficiency and effectiveness

93

94Source: CMS

Better care, smarter spending, healthier people

Potential Medicare Inpatient PPS Payments at Risk

Type 2013 2014 2015 20162017

And subsequentyears

Value based purchasing

1% 1.25% 1.5% 1.75% 2%

Readmission reduction program

1% 2% 3% 3% 3%

Hospital acquired conditions

0% 0% 1% 1% 1%

At Risk 2% 3.25% 5.50% 5.75% 6%

95

Annual payment updates

Comprehensive care for joint replacement

EPM, CR Incentive Payment

Hospital Readmission Reduction Program

• Penalize hospitals for greater than expected 30-day readmission rate

• Adjusts acute inpatient prospective payment system operation payments

• Approx. $550 million in 2018

FFY 2013 – up to 1 percent

FFY 2014 – up to 2 percent

FFY 2015 – FFY 2019 – up to 3

96

Federal Fiscal Year

20

17

-2

01

9

PN Expanded Definition

CABG

20

15

-2

01

6

THA / TKA

COPD

20

13

-2

01

4 PN

HF

AMI

HRRP Performance versus payment adjustment periods

97

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

2012 2013 2014 2019

FFY 2019 Program

Performance Period (All Conditions)

FFY 2019 Program

Payment Adjustment

FFY 2018 Program

Payment Adjustment

FFY 2017 Program

Performance Period (All Conditions)

FFY 2017 Program

Payment Adjustment

FFY 2018 Program

Performance Period (All Conditions)

2016 2017 20182015

98

73.9%

64.3%

53.8% 52.9%

42.6%

22.8%

17.9%

6.5%4.3% 3.2%

21.7% 21.4%

30.8%

41.2%

48.1%

56.9%

52.6%

71.0%

47.8%

61.3%

83.3%

4.3%

7.1%15.4%

2.9% 5.6%

15.0%

20.5%22.6%

32.6%

25.8%

7.1%

2.9% 3.7%3.9%

7.7%

15.2%

6.5%

16.7%

1.4%1.3% 3.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY 2018 HRRP Final Rule Payment Adjustment Proxy

No Penalty Between 0 and 1 Percent Between 1 and 2 Percent

Between 2 and 3 Percent 3 Percent

Hospital Acquired Condition (HAC) Reduction Program OverviewApplicable conditions, performance timeframes, and other details for the FFY 2017, 2018, and 2019 programs

Domain 1: AHRQ Claims Based Measures Domain 2: CDC Chart Abstracted Measures3

(2017) (NEW 2018+)PSI-90: Patient Safety Indicator

Composite Ratio1Weigh

tPSI-90: Patient Safety and Adverse

Events Composite2Weigh

tDomain Weight

Central Line Associated Blood Stream Infection (CLABSI)

Domain Weight

PSI 15: Accidental Puncture or Laceration

43.9% PSI 13: Postop Sepsis 24.1%

15%

Catheter Associated Urinary Tract Infection (CAUTI)

85%

PSI 12: Postop PE Or DVT 33.8% PSI 11: Postop Respiratory Failure 21.5% Surgical Site Infection (SSI) Pooled SIR4

PSI 6: Iatrogenic Pneumothorax 7.5% PSI 12: Postop PE Or DVT 18.4% SSI from Colon Surgery

PSI 13: Postop Sepsis 5.7% →PSI 9: Periop Hemorrhage Or Hematoma Rate

15.0% SSI from Abdominal Hysterectomy

PSI 7: Central Venous Catheter-Related Blood

3.8% PSI 6: Iatrogenic Pneumothorax 9.7% Clostridium difficile (C.diff.) SIR

PSI 3: Decubitus Ulcer 3.3%PSI 10: Postop Acute Kidney Injury Requiring Dialysis

4.9%Methicillin-resistant Staphylococcus Aureus (MRSA)

PSI 14: Postop Wound Dehiscence 1.8% PSI 3: Decubitus Ulcer 3.6%PSI 8: Postop Hip Fracture 0.2% PSI 14: Postop Wound Dehiscence 0.9%

PSI 8: Postop Hip Fracture 0.9%

PSI 15: Accidental Puncture or Laceration

0.8%

Measure Scores Domain Scores Total HAC ScoreTop Quartile/1.0%

Penalty Determination

Annual Program Impact

99

100

Value-Based Purchasing – FFY 2018

Person and Community Engagement

Clinical CareEfficiency and Cost

Reduction

Communication With Nurses

Communication With Doctors

Responsiveness

Communication About Medicines

Clean and Quiet

Discharge Info

Overall Rating

AMI 30 Day Mortality

MORT-30-AMI

HF 30 Day MortalityMORT-30-HF

Pneumonia 30 Day Mortality

MORT-30-PN

Patient Safety Indicator – PSI-90

Central Line-Associated Blood Stream Infections

(CLABSI)HAI-1

Medicare Spending Per Beneficiary

SPP-1

Catheter-Associated Urinary Tract

Infection (CAUTI)HAI-2

Surgical Site Infection – Colon and Abdominal

HysterectomySSI

Safety

Clostridium difficile Infection (C diff) CDI

Methicillin-Resistant Staphlococcus aureus

Bacteremia MRSA

*New for FFY 2019 (October 1, 2018 – September 30, 2019)

Value-Based Purchasing – FFY 2019 – Finalized

Elective DeliveryPC-01

Care TransitionsCTM_3

THA/TKA Complication Rate

Performance and Baseline Periods for the FFY 2019 VBP Program

Domain Measure BaselinePeriod

Performance Period

Safety PSI – 90 July 1, 2011 – June 30,2013

July 1, 2015 – June 30, 2017

CAUTI, CLABSI, SSI, CDI, MRSA, PC-01

Jan 1, 2015 – Dec 31, 2015

Jan 1, 2017 –Dec 31, 2017

Clinical Care Outcomes

AMI, HF, Pneumonia, 30 day Mortality

July 1, 2009 – June 30, 2012

July 1, 2014 – June 30, 2017

THA/TKA Complications

July 1, 2010 – June 30, 2013

Jan 1, 2015 – June 30, 2017

Efficiency & Cost Reduction

Jan 1, 2015 – Dec 31, 2015

Jan 1, 2017 – Dec 31, 2017

Patient & Caregiver –Centered Experience of Care/Care Coordinator

Jan 1, 2015 – Dec 31, 2015

Jan 1, 2017 – Dec 31, 2017

101

Measure IDNational

Threshold

National

Benchmark

Minimum

Standards

HAI_1 (EXPANDED) 0.860 0.000

HAI_2 (EXPANDED) 0.822 0.000

HAI_5 0.854 0.000

HAI_6 0.924 0.113

PSI-90 1.052733 0.774058 3 Cases

PSI-90 PC-01 Elective Delivery Prior to 39 completed Weeks Gestation 1.0038% 0.0000% 10 Cases

HAI-3 Surgical Site Infection - Colon 0.783 0.000

CLABSI HAI-4 0.762 0.000

Measure IDNational

Threshold

National

Benchmark

Minimum

Standards

MORT–30–AMI MORT–30–AMI 85.0617% 87.3263%MORT–30

–HF MORT–30–HF 88.3472% 90.8094%

MORT–30–PN Pneumonia (PN) 30-Day Mortality Rate (converted to survival rate for VBP) 88.2334% 90.7906%

MORT–30

–PN THA/TKA (NEW) 3.2229% 2.3178%

Measure ID Measure Description National FloorNational

Threshold

National

Benchmark

Minimum

Standards

Communication with Nurses 28.10% 78.69% 86.97%

Communication with Doctors 33.46% 80.32% 88.62%

Responsiveness of Hospital Staff 32.72% 65.16% 80.15%

Communication about Medicines 11.38% 63.26% 73.53%

Hospital Cleanliness & Quietness 22.85% 65.58% 79.06%

Discharge Information 61.96% 87.05% 91.87%

Overall Rating of Hospital 28.39% 70.85% 84.83%

CTM-3 3-Item Care Transitions Measure 11.30% 51.42% 62.77%

Measure IDNational

Threshold

National

Benchmark

Minimum

Standards

MSPB-1

Median Ratio

Across All

Hospitals

Mean Ratio of

Lowest Decile

of Hospitals

25 Cases

Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (THA)

Complication Rate

Pe

rso

n a

nd

Co

mm

un

ity

Enga

gem

en

t

100 Surveys

Effi

cie

ncy

an

d

Co

st R

ed

uct

ion

Measure Description

Spending Per Hospital Patient With Medicare

Clostridium difficile (C.diff.)

Patient Safety Indicator Composite (Recalibrated AHRQ Software v5.0.1)

Pooled Surgical Site Infection (SSI) Measure:

1 Predicted

InfectionSurgical Site Infection - Abdominal Hysterectomy

Cli

nic

al

Ca

re

Measure Description

Acute Myocardial Infarction (AMI) 30-Day Mortality Rate (converted to survival rate for VBP)

25 Cases

Heart Failure (HF) 30-Day Mortality Rate (converted to survival rate for VBP)

Value Based Purchasing (VBP) Overview: FFY 2019 Program

Measures, Performance Standards, Evaluation Periods, and Other Program Details for the FFY 2019 VBP ProgramSa

fety

of

Car

e

Measure Description

Central Line-Associated Blood Stream Infection (CLABSI) (ICU and Select Wards)

1 Predicted

InfectionCatheter-Associated Urinary Tract Infection (CAUTI) (ICU and Select Wards)

Methicillin-resistant Staphylococcus Aureus (MRSA) Blood Laboratory-identified Events

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Performance Score:Original Domain Weighting

Efficiencyand Cost

Reduction25%

Safety of Care25%

Clinical Care:

Outcomes25%

Clinical Care:

Person and Community Engagement

25%

103

Value-Based Purchasing – FFY 2018

Clinical CareEfficiency and Cost

Reduction

Communication With Nurses

Communication With Doctors

Responsiveness

Communication About Medicines

Clean and Quiet

Discharge Info

Overall Rating

AMI 30 Day Mortality

MORT-30-AMI

HF 30 Day MortalityMORT-30-HF

Pneumonia 30 Day Mortality

MORT-30-PN

Central Line-Associated Blood Stream Infections

(CLABSI)HAI-1

Medicare Spending Per Beneficiary

SPP-1

Catheter-Associated Urinary Tract

Infection (CAUTI)HAI-2

Surgical Site Infection – Colon and Abdominal

HysterectomySSI

Safety

Clostridium difficile Infection (C diff) CDI

Methicillin-Resistant Staphlococcus aureus

Bacteremia MRSA

*New for FFY 2020 (October 1, 2019 – September 30, 2020)

Value-Based Purchasing – FFY 2020 – Finalized

Elective DeliveryPC-01

Care TransitionsCTM_3

THA/TKA Complication Rate

Person and Community Engagement

Performance and Baseline Periods for the FFY 2020 VBP Program

Domain Measure BaselinePeriod

Performance Period

Safety CAUTI, CLABSI, SSI, CDI, MRSA, PC-01

Jan 1, 2016 – Dec 31, 2016

Jan 1, 2018 – Dec 31, 2018

Clinical Care Outcomes

AMI, HF, Pneumonia, 30 day Mortality

July 1, 2010 – June 30, 2013

July 1, 2015 – June 30, 2018

THA/TKA Complications

July 1, 2010 – June 30, 2013

July 1, 2015 – June 30, 2018

Efficiency & Cost Reduction

Jan 1, 2016 – Dec 31, 2016

Jan 1, 2018 – Dec 31, 2018

Patient & Caregiver –Centered Experience of Care/Care Coordinator

Jan 1, 2016 – Dec 31, 2016

Jan 1, 2018 – Dec 31, 2018

104

105

28.6% 30.0%34.4%

54.6%

63.2%65.9%

85.3% 86.7%

100.0%

71.4% 70.0%65.6%

45.4%

36.8%34.1%

14.7% 13.3%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

District ofColumbia

Nevada NewJersey

Nation Missouri Kansas Oregon SouthDakota

Hawaii

FY 2018 VBP Final Rule Payment Adjustment Proxy

Bonus Penalty

Other Pay for Performance Models

Proposal to cancel acute myocardial infarction, coronary artery bypass graft and surgical hip / femur fracture treatment episode payment models and cardiac rehabilitation incentive payment model (CMS-5524-P)

Proposes to change mandatory participants in comprehensive care for joint replacement (CMS-5524-P)

Cancelled the Medicare Part B drug payment model (CMS-1670-WM)

CMMI RFI due November 20 (https://innovation.cms.gov/Files/x/newdirection-rfi.pdf)

106

Comprehensive Care for Joint Replacement Program

• Nov. 16, 2015: CMS published proposed rule for CJR– Start date April 1, 2016

– Hospitals in 67 MSAs (over 800 hospitals) subject to mandatory payment model for hip and knee replacement

– Kansas MSAs impacted:Topeka, Kansas City, and Wichita

– Missouri MSAs impacted:

– Cape Girardeau, Columbia, St. Louis, Kansas City

“The Comprehensive Care for Joint Replacement model aims to support better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries; hip and knee replacements.”

Basics of CJR• Mandatory bundled payment model for total

joint replacement of lower extremities – DRGs 469 and 470

• 5-year program

• CMS defined quality metrics

• Target spending based on regional spending

• Retrospective annual reconciliation

• Excluded existing Bundled Payments for Care Improvement (BPCI) contracts

Basics of CJR

Acute care

Hospital stay

And post acute

Care 90-days

Post discharge

Part A inpatient hospital and Part B outpatient for “anchor” stay

+

Post-acute services 90-days post discharge

+

Inpatient readmission Part A and B services

Changes to CJR Program

• July 25, 2016: CMS proposed some changes to the CJR model– To align the financial arrangements policies and make

some changed to the quality scoring methodology

• Dec. 20, 2016: CMS finalized the Advancing Care Coordination through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model and Changes to the CJR– Adds cardiac model for heart attack and cardiac

bypass surgery for 98 MSAs– Expands CJR to include surgical treatment for hip and

femur fracture with other joint replacement for current 67 MSAs

Changes to the CJR Program

• March 2017: CMS released interim final rule to delay the implementation date to Oct. 1, 2017 for the expansion of EPMs and delays CJR again to May 20, 2017

• May 2017: CMS issues another delay until Jan. 1, 2018

• August 2017: CMS published another proposed rule to– Reduce the number of mandatory MSAs for CJR from 67 to

34

– Allow the CJR hospitals in the remaining 33 MSAs to participate on a voluntary basis. None of Kansas or Missouri MSAs in the mandatory program

– Cancel the EPM model

The Future of CJR• Sept. 29 resignation of

HHS Secretary Tom Price over scandal of over use of private jets

• Dr. Don Wright is appointed acting HHS Secretary

• Eric Hargan appointed acting HHS Secretary –October 10

• How or will this change the direction of the CJR program?

“We insist CMMI stop experimenting with Americans’ health, and cease all current and future planned mandatoryinitiatives within the CMMI.”

--Senator Tom Price, Sept. 2016

113