the affordable care act: impact on hospitals in kansas
TRANSCRIPT
September 12, 2013
THE AFFORDABLE CARE ACT:IMPACT ON HOSPITALS IN KANSAS
Agenda and Introductions
Discussion Topic Presenter
Ascension Health’s Role in this Work
Overview of ACA Coverage Options
Mary Ella PayneSenior Vice President
Policy & Legislative Leadership Ascension Health
Health Insurance Marketplaces, Insurance Reforms and More
Beth C. Fuchs, Ph.D. Principal
Health Policy Alternatives, Inc.
Our Mission
Rooted in the loving ministry of Jesus as healer, we commit ourselves to serving all persons with special attention to those who are poor and vulnerable.
Our Catholic health ministry is dedicated to spiritually centered, holistic care which sustains and improves the health of individuals and communities.
We are advocates for a compassionate and just society through our actions and our words.
HealthMinistry
Ascension
Participating Entities appoint members of
Ascension Health Ministries
“Ascension Health Ministries” (PJP composed of up to 12 individuals)
Founding Participating Entities
ParticipatingEntities
Sponsor
SystemParent
HealthMinistries
Approved by Rome June 30, 2011
Oak Hill Capital Partners
AscensionHealth
Ventures
Ascension HealthCare Network Management
Agreement
Leadership Academy
Ascension Health
Solutions
Ascension Health Services
AscensionHealth
(Delivery)
HealthMinistry
HealthMinistry
AffiliateOrganizations
Appoint
Participating Entities
InfrastructureSupport
Congregation of St. Joseph
Sisters of St. Josephof Carondelet
Daughters of CharityProvince of St. Louise
Alexian Brothers
Sisters of the Sorrowful
Mother
Ascension Health, part of Ascension, is the largest Catholic and nonprofit health system, and the third largest system (based on revenues) in the United States, operating in 23 states and the District of Columbia.
Our Delivery System
Daughters of Charity Health System isan affiliate of Ascension Health
Ascension Health’s Major Healthcare Delivery Platforms
Ambulatory Care and Diagnostics
Ambulatory Surgery Centers 70
Employer/Occ Health 44
Free-standing Imaging 83
Retail Lab Collection Sites 256
Primary Care Clinics 491
Specialty Clinics 260
Retail Pharmacies 35
Sleep Centers 28
Telemedicine Programs 59
Inpatient Facilities
General Acute Care 100
Long-term Acute Care
3
Rehabilitation 3
Psychiatric 7
Total 113
Prevention & Wellness Programs
Alternative Care 13
Community/Social Services 120
Wellness/Fitness 20
Post Acute Service Sites
Behavioral Health – Acute units 31
Behavioral Health – Outpatient 76
Cancer Centers 20
Durable Medical Equipment 23
Home Health Agencies 26
Hospice/Palliative Programs 35
Infusion Therapy Programs 23
Private Duty Services 4
Rehabilitation – Outpatient 226
Rehabilitation – Inpatient units 35
Updated May 2013
Long-term Care & Senior Living Sites – 38 communities comprised of the
following:
Adult Day Care 11
Assisted Living (AL) 7
Independent Living (IL) 3
Skilled Nursing (SNF) 21
CCRC (combined SNF/AL/IL) 9
PACE 3
FY12 Systemwide Statistics*
Discharges 693,544 Available beds 18,450 Number of births 72,121 Total surgical visits 529,341 Home health visits 534,232 Clinic visits 1,877,970 Emergency visits 2,454,455 Physician office visits 6,974,451 Total outpatient visits 20,155,034 Associates 122,000
* FY12 Statistics do not include Ministry Health Care, St. John Health System, or Via Christi Health
Strategic Direction:‘Architecture’ for Realizing our Vision
Vital Presence
Healthcare That Leaves No One Behind
Inspired People
Trusted Partnerships
Empowering Knowledge
Healthcare That Is Safe
Healthcare That Works
Our outward promise to those
we serve
Enabled by focused inner strengths
Provider-Centered:transactional model
Person-Centered:relationship model
Focus Providers’ delivery of medical services to patients to address a healthcare episode
Trust-based relationship that promotes a spiritually centered, holistic approach to supporting a person’s health and well-being
Locus of Control
Primarily providers Primarily the person and family supported by a trusted ecology of resources
Nature of Choices
Healthcare choices are mostly reactive
Health choices are well-understood and frequently proactive
Primary Locations
Hospitals and clinics More care and support in the community, in the home and by virtual means
Health Information
Provider-based, episodic, transactional
Coordinated, transparent data managed by well-informed individuals
Duration Episode of care Lifetime relationships
Transformational Path to Realizing our VisionPerson-
Centered Approach Fostering
Continuous, Dynamic
Relationships With Those We Serve
Moving from Provider-Centered to Person-Centered
Our Guiding Features of a Reformed Healthcare Policy
Ensure 100% Access
to Healthcare Services
Achieve Destination of 100% Coverage
Reform Insurance Rules; Shared Obligation and
Responsibility for Coverage
Make Health Insurance
Affordable and Equitable
Eliminate Coverage and Service Gaps, Particularly for
the Vulnerable
Ensure Economic Viability Through Shared Financial
Responsibility
Improved Health for Our Community
We are committed to redesigning the healthcare delivery system
and partnering with policymakers
to achieve 100% access and 100% coverage.
An Overview of the Coverage Continuum
in the Affordable Care Act
Healthcare Reform: What Is It?
Healthcare Reform
Quality & Delivery System Reforms
Insurance Coverage Expansion
Health Insurance Reforms
Patient Protection and Affordable Care Act (ACA) signed on March 23, 2010
Constitutionality Affirmed by Supreme Court on June 28, 2012.
The healthcare reform law makes sweeping changes to our nation’s healthcare system with a vision to provide health coverage to all Americans and promote more efficient care delivery.
12
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Coverage: Medicaid expansion, major insurance reforms (e.g., guaranteed issue, rating rules, no pre-ex for adults) insurance exchanges, premium / cost sharing subsidies, individual / employer responsibility requirements
Medicare Savings: MA payment reductions, productivity offset to FFS updates
Medicare/Medicaid Savings: DSH reductions, IPAB Medicare proposal
Coverage: Small business premium tax credit
Immediate Insurance reforms: high risk pool, dependent coverage to age 26, no pre-ex for kids, loss ratios/ rate review
Delivery System Reform: Center for Medicare and Medicaid Innovation
Delivery System Reform: ACOs, hospital value-based purchasing
Delivery System Reform: Hospital readmissions, payment bundling
Delivery System Reform: Physician quality reporting penalties
New Revenue: Tax on prescription drug manufacturers
New Revenue: Excise tax on medical device makers, Medicare tax on high earners
New Revenue: Tax on health insurers
New Revenue: Tax on high-cost health plans
Medicare/Medicaid Savings: Medicare provider updates, Medicaid prescription drug rebates
Timeline of Key Health Reform ProvisionsPassed March 23, 2010
14
Current Sources of Coverage for Non-Elderly in U.S. and Kansas (2011-2012)
Kansas U.S.
Employer-Sponsored 60% 56%
Individual Insurance 6% 6%
Medicaid 14% 18%
Other public 4% 3%
Uninsured 15% 18%
Total 100% 100%
Close to 365,000 Kansans are currently uninsured
Sources: Kaiser Family Foundation, http://kff.org/other/state-indicator/nonelderly-0-64/; Kansas Health Institute, Insurance Exchange Will Provide Many Kansas Consumer With New Options, January 2013, http://media.khi.org/news/documents/2013/01/07/HR_Exchange.pdf
15
Health Coverage Options for Individuals in 2014
Source: CCIIO, Insuring America, Presentation, NIHCM Webinar, May 7, 2013
133% FPL for family of 3 -- $25,975400% FPL for family of 3 -- $78,120
Sliding Scale
Supreme Court Decision and Medicaid Expansion Coverage Expansion Becomes Voluntary for States
States can choose not to expand Medicaid to cover all state residents under 133% FPL, without risking federal funding for their entire Medicaid program.
HOWEVER, the balance of Medicaid provisions still stand, including cuts in funding that support hospitals that provide higher levels of care to uninsured individuals and uncompensated care.
June 2012 U.S. Supreme Court Decision
17
Kaiser Family Foundation, Status of State Action on the Medicaid Expansion Decision, as of September 3, 2013 , www.statehealthfacts.org
Medicaid Expansion Decision as of September 3, 2013
Source: Kaiser State Health Facts, January 2013
Kansas Medicaid Eligibility and Eligibility for Tax Subsidies for Private Insurance
Currently Eligible for Medicaid in KS
Eligible for Subsides in the Insurance Marketplaces (100% – 400% FPL)
31% 25% No coverage options for 88,000.
100% FPL
400% FPL
Children PregnantWomen
WorkingParents
JoblessParents
ChildlessAdults
150%
133% FPL
100%
150% FPLBy age0-1 150% 1-5 133% 6-9 100%
Income LevelUpper Income
Limit for Family of Three
Premium as Percent of
Income
Cost/Month at High End
Up to 133% FPL $25,975 2% $43
133-150% FPL $29,295 3-4% $98
150-200% FPL $39,060 4-6.3% $158
200-250% FPL $48,825 6.3-8.05% $327
250-300% FPL $55,590 8.05-9.5% $440
300-400% FPL $78,120 9.5% $618
Premium Tax Credits
Individual Premium Tax Credits/Cost Sharing Reductions
Source: Kaiser Family Foundation, July 2012
Cost-sharing reductions also are available for individuals <250% FPL.
Insurance Reforms and
Health Insurance Marketplaces
21
ACA Insurance Reforms Now in Place
No lifetime limits; limits on use of annual dollar limits on benefits
Insurance companies cannot renege on promised coverage
No pre-existing conditions exclusions for children under 19
Children up to age 26 can be covered a parent’s plan
Patient cost sharing eliminated for recommended preventive services
22
More ACA Insurance Reforms Now In Place
• Medical Loss Ratioo 80% of insurance premiums must be spent on healthcare
delivery 85% for large insured group plans)o Insurers must rebate excess premiums
• Enhanced rate (premium) review by state regulators
• Uniform explanation of coverage documents; standardized definitions
Regulatory Environment for Exchanges in 2014
23
Fair Health Insurance Premiums
Health status and gender not used to set premiums; limit on
age rating
Single Risk Pool
Issuers cannot use separate risk pools to charge certain
customers higher rates
Guaranteed Availability
Coverage must be offered to all comers, with limited
exceptions, during enrollment or special enrollment periods
Guaranteed Renewability
Coverage must be renewed for all policyholders, with limited
exceptions
Adapted from CMS, Health Insurance Market Rules, Rate Review, 2012
These rules apply to insurance sold in and outside of Exchange
Under Current Rules, Small Group Rating Rules:
Premiums Vary Significantly
24Source: National Association of Insurance Commissioners and the Center for Insurance Policy and Research
http://www.naic.org/documents/topics_health_insurance_rate_regulation_brief.pdf
25
Insurance Reforms as of 2014
• Insurers have to charge small firms in same area for identical coverage more similar premiums regardless of health status of their employees. • Within area premiums can only vary for family size, age,
tobacco use
• No one can be turned down or cancelled because of health status, pre-existing condition or use of healthcare.
• No pre-existing condition exclusions
• Apply at annual and special enrollment periods
Insurance Reforms in Kansas as of 2014
For Kansas small businesses--
• Age adjusted community rating (3:1 limits on age variation)
• No 90-day, pre-existing condition waiting periods for timely enrollment
• Insurers must offer Essential Health Benefits Comparable to largest small business policy in the state
May be more comprehensive than current policy
26
27
Essential Health Benefits (EHB)
• States selected among certain existing option(s) for
their EHB benchmark plan. Default is largest small
group policy in the state
• Kansas: BCBS Comprehensive Major Medical-Blue Choice
Blue Shield of Kansas Comprehensive Plan
• EHBs must cover 10 categories of required services: Ambulatory care, emergency services, hospitalization,
maternity/newborn care, mental health and substance use disorder
services, including behavioral health treatment, prescription drugs,
rehabilitative and habilitative services and devices, laboratory services,
preventive and wellness services and chronic disease management
28
Actuarial Value (AV) and Cost Sharing
• Plans offering EHBs have to meet certain cost-sharing standards:
Limits on maximum out-of-pocket (MOOP) costs for EHBs: $6,350 for an individual, $12,700 for a family for 2014
• Plans have to meet certain AV levels (the so-called “metals” levels)
– Bronze: 60% AV
– Silver: 70% AV
– Gold: 80% AV
– Platinum: 90% AV
• The cost-sharing is reduced on sliding scale basis under affordability programs
Marketplaces will:
Provide one-stop-shopping for individuals and small businesses seeking healthcare insurance coverage in transparent, competitive marketplaces.
Provide consumer friendly online tools comparing premium rates and benefit packages for health insurance coverage options that meet minimum standards.
Allow individuals to apply for insurance subsidies online, in person, by mail or by telephone.
Bottom line, make it easier to shop for and enroll in health insurance
Administered by states, the federal government, or a partnership between the two.
What is a Health Insurance Marketplace?
30
Why Marketplaces (Exchanges)?
• Premiums are reduced by pooling small-business buying power, structure of competition, and economies of scale
• More choice of insurance options for small employers and their employees
• Comparing and making choices among insurance options is easier
• Ultimate goal: drive innovation and improvements in affordability, quality and customer service
31
Status of the States’ Exchange Decisions for 2014
State-based Exchange:
16 states + DC have
declared
Partnership Exchange:
Seven states are planning
for a Partnership Exchange
Federally-Facilitated
Exchange:
26 states currently default
to the Federally-Facilitated
Exchange
Kaiser Family Foundation, Statehealthfacts.org;
http://kff.org/health-reform/state-indicator/health-insurance-exchanges/#
Which Insurers in Kansas will be Selling through the Individual Exchange?
As of late August• Blue Cross and Blue Shield of Kansas• Blue Cross of Kansas City
Also Multistate Plan Program option in same 103 counties
• Coventry Life and Health, and Coventry Health Care of Kansas
PPO and an HMO
Source: Wichita Eagle, How will the Affordable Care Act Work? August 28, 2013, www.kansas.com/2013/08/28/2969649/how-will-the-affordable-care-act.html
32
Healthcare.gov Revamped
text
Federally Facilitated SHOP– www.Healthcare.gov
34
InsureKS.org
35Sponsored by Kansas Department of Insurance
36
• Many key design decisions left to states; therefore what exchanges do and how well they do it will vary by state
• Exchanges must compete with insurance offered in the outside market, so will need to offer plans that are cost competitive and high quality
• Exchanges need to maximize participation to gain scale, avoid adverse selection
Will Exchanges Succeed?
Exchanges Projected to Start at Seven Million and Reach About 25 Million
Exchange enrollment estimated to be about seven million in 2014, increasing to about 22 million by 2016 and 25 million in 2018.
More than 80 percent of enrollees estimated to be eligible for sliding-scale tax-credits.
About three million estimated to be in small business (SHOP) Exchange.
37
Source: Congressional Budget Office. May 2013 Baseline
Exchanges: Overall Timeline
38
2013
October 1 Open-enrollment begins
December 15 Deadline for QHP selection in order to qualify for January 1, 2014 coverage effective date
2014
January 1 Coverage begins
January 15, February 15, March 15
Deadlines for plan selection for enrollment in following month
March 31 Open-enrollment ends
Exchanges: Reinforcing the New Provider/Purchaser Environment
Incentive for low premium plans in Exchanges, especially to attract those with tax credits (~ 85% of likely enrollees)
• Premium tax credit tied to second lowest price silver (70% AV) plans• ACA takes away selected underwriting, pricing, cost control and design
tools that plans have used in small group and individual market• Result: Plans in Exchanges turning to other cost control devices:
networks, provider pricing, utilization controls
Reinforces comparable pressures on providers from larger employers, Medicare and Medicaid
• Standardized FFS approaches and payments will be increasingly unattractive
• Incentives for new arrangements among providers and with payers to lower total cost growth
39
Charity Care and Bad-Debt Exposure Continues
• While number with coverage are likely to increase by about 25 million, providers face financial constraints
About 30 million remaining uninsured Medicaid an increasing source of coverage with limited payment
rates
• Cost-sharing in Exchanges and in employer policies remains
Cost-sharing continues to increase under traditional employer policies
Cost-sharing can be substantial even with “minimum essential coverage” (e.g. larger employer plans)
While maximum out-of-pocket cost limits in place, cost-sharing remains in the plans in the Exchange
• State law loopholes in insurance regulation For example, possibility of limited duration plans
40
Implications for Hospitals
• Patients covered under Exchange plans may result in better coverage
with lower out of pocket maximums
• There will be more insured patients, but many uninsured likely to be
unaware of the Exchanges and subsidies in 2014; effects of ACA may
be limited at first
• Plans have to meet network adequacy requirements, but Exchange
plans may have narrower networks than non-Exchange plans
• To keep premiums competitive, insurers may try to negotiate deeper
discounts from hospitals
41
Eligibility, Outreach and Enrollment
• Navigators • Certified Application Counselors (CACs)
• Presumptive Eligibility
Eligibility and Enrollment Pathways and Consumer Assistance
Navigators
Agents / Brokers / Producers
In-Person Assisters
Certified Application Counselors
Assistance Entities
State Agency (e.g., Depts. Of Health / Social Services)
Online PhoneIn-person
Enrollment Complete
Outreach Efforts for 2014 for Kansas Marketplace
• Navigators Kansas Association for the Medically Underserved, $524,846
• (Consortium of Kansas Hospital Association, the Kansas Association of Local Health Departments, the Association of Community Mental Health Centers of Kansas, the Kansas Area Agencies on Aging Association, and the Kansas Insurance Department). Aim to assist about 48,000 people
Advanced Patient Advocacy, $195,556 Via Christi Health, Ascension Health, $165,683
• Certified application counselors (e.g., community health centers, hospitals, social service agencies)
• Agents and brokers • HHS Call Center; www.healthcare.gov
44
Navigator Duties
45
Marketplaces must establish a Navigator program to provide in-person education, and eligibility/enrollment assistance.
Navigators must:
• Maintain expertise in eligibility, enrollment and program specifications, and conduct public education activities to raise awareness about the Marketplace.
• Provide information and services in a fair, accurate and impartial manner, and help enrollees with grievances and complaints.
• Help enrollees select a Qualified Health Plan.
• Provide information in a manner that is culturally and linguistically appropriate, including individuals with limited English proficiency.
46
What does a CAC organization do?As a CAC organization, staff will help people understand, apply and
enroll for health coverage through the Marketplace. Hospitals must agree to
make sure that designated individuals complete required training, and that
they comply with privacy and security laws, and other program standards.
Your organization must: • Have processes in place to screen your staff to make sure that they
protect consumer information• Engage in services that position you to help those you serve with
health coverage issues• Have experience providing social services to the community
April 11, 2023
Certified Application Counselors (CACs)
What Is Presumptive Eligibility (PE)?
• Ability for “qualified entities” to make immediate, temporary Medicaid/CHIP determinations
• Providers are paid for all services provided during temporary eligibility period
• Individual must complete full Medicaid/CHIP application by end of the month after the PE determination was made in order to retain ongoing coverage
• Previously, states could opt to use PE only for children and/or pregnant women in Medicaid/CHIP
47
Two New Ways to Use PE
Two new PE options, available starting January 1, 2014:
1. States can use PE to connect adults to Medicaid (not just children and pregnant women)
2. Hospitals can use PE for any income-based population regardless of whether the state uses PE
48
Why Is PE An Important Enrollment Tool?
49
Allows people to connect to coverage in
trusted settings when
already naturally
thinking about healthcare
Immediate access to needed
services, and providers get
paid
Bridge to coverage
when real-time eligibility
determination not possible (verification
issues, system issues, natural disasters, etc.)
Follow-up, referrals
essential to ensure
individuals are fully enrolled
What Happens Next?
• Individual must complete full Medicaid application by the end of the month after the PE determination was made to keep Medicaid coverage.
• Hospitals are paid for all services provided during PE period, regardless of a patient’s ultimate Medicaid eligibility determination.
51
Discussion and Q&A