Tax Credit Extension Sought to Aid Rural Providers

Advocates are trying to persuade Congress to permanently extend a tax incentive program that helps small and rural healthcare providers obtain financing for building and expansion projects.

The New Markets Tax Credit Program was authorized in 2000 and last extended for two years on Jan. 1, 2013. The current push is to make the program permanent, which President Barack Obama supported in his fiscal 2015 budget proposal. In the House, Reps. Jim Gerlach (R-PA) and Richard Neal (D-MA) reintroduced legislation earlier this month that would make the program permanent rather than requiring reauthorization every two years. Similar bipartisan legislation was introduced in the Senate last summer.

Cuyuna Range Hospital District in Crosby, MN, is among the rural providers that have taken advantage of the program. The district, which operates 25-bed Cuyuna Regional Medical Center, wanted to finance a $15.7 million project last year to expand its operating rooms and surgical clinics. The program allowed Cuyuna to save 18 percent on its borrowing costs, or about $2.3 million. 

“It's a real opportunity for rural healthcare for expansion,” said John Solheim, Cuyuna Regional's CEO. “It helps you create equity and economic development.”

For healthcare providers, the program allows them to reap savings through a lower interest rate from lenders and makes them more attractive borrowers at a time when many rural hospitals are struggling to obtain financing.  

Read the full article in Modern Healthcare (requires a free subscription).  

AHA Files Suit Against HHS Over "Two-Midnight" Rule

The American Hospital Association filed two lawsuits Monday against the two-midnight rule and was joined in its suit by several state hospital associations and individual hospitals.

“The two-midnight rule undermines medical judgment and disregards the level of care needed to safely treat patients,” said Richard Umbdenstock, president and CEO of the AHA, in a release announcing the lawsuits. “Hospitals stand by a physician's decision on what care is appropriate for each patient. The two-midnight rule is misguided and we feel confident the court will agree.”

“The hospitals take issue with the wholly arbitrary requirement that a physician must certify at the time of admission that a Medicare patient is expected to need care in the hospital for a period spanning two midnights to be considered an inpatient,” the release also said.

The doc-fix bill recently approved by Congress included a six-month extension before compliance would be enforced for the two-midnight rule. AHA apparently plans to use that time contesting it in court.

The existing two-midnight rule says admitting physicians must have good reason to believe that a patient will need two nights in the hospital before Medicare will pay full inpatient rates under Part A for the stay. Lacking such documentation, Medicare auditors will generally classify the stay as outpatient observation, which pays hospitals much less under Part B and sticks the patient with a 20% co-payment. That rule went into effect Oct. 1. But it was modified so that Medicare's aggressive recovery audit contractors could not overturn claims under the new policy until Sept. 30, 2014.

The enacted legislation requires Medicare to extend that recovery-auditing moratorium until March 31, 2015. It also gives Medicare officials the discretion to extend what's known as the “probe and educate” process until the same date next year. Under that process, a different set of companies, known as Medicare administrative contractors, can audit a small number of short-stay inpatient claims and train hospitals on how to submit more accurate bills. 

Read the article in Modern Healthcare (requires a free subscription).  

HHS Secretary Kathleen Sebelius Resigns, OMB Director Sylvia Mathews Burwell to Step In

Health and Human Services Secretary Kathleen Sebelius announced her resignation Friday, ending a tumultuous tenure as the public face of the Affordable Care Act. In a Rose Garden ceremony, President Obama nominated his budget director as her successor.

According to federal health officials, Sebelius approached Obama in early March and told him that, with the insurance enrollment period ending that month, the time had come for new leadership at HHS. A White House official, who spoke on the condition of anonymity to discuss internal deliberations, said Sebelius told the president that “she felt confident in the trajectory for enrollment and implementation of the Affordable Care Act.”

Obama on Friday nominated Office of Management and Budget Director Sylvia Mathews Burwell to take Sebelius’s place. Although Burwell does not have an extensive background in healthcare policy, she is known for her strong management skills and has experience in issues of poverty and global health issues from her time at the Bill and Melinda Gates Foundation. Moreover, she is popular on Capitol Hill. The Senate confirmed her as OMB director 96 to 0 almost exactly a year ago. Her nomination to lead HHS will require Senate confirmation as well. Read the full article in The Washington Post.

When A Rural Hospital Closes, The Town Struggles To Survive

The story of Hancock Memorial Hospital in the tiny town of Sparta, Georgia is not unique. Hancock Memorial Hospital was among the first of nine rural hospitals that have closed across Georgia since 2000. Today, it’s overgrown with weeds and vines, while the roof caves on the gurneys and computers still inside. When County Commissioner Sistie Hudson tries to recruit a new industrial employer, one of the first things they ask is: “Do you have a hospital?” That's a non-starter for most businesses. 

University of North Carolina professor Mark Holmes studied the economic impact of 140 rural hospital closures nationwide. He found that three years out, losing a hospital costs a community, on average, “about 1.6 percentage points in unemployment, about $700 in per capita income, and that was in [year] 2000 dollars so that’d be probably about $1,000 currently." 

Read, or listen, to the story on American Public Media, Marketplace.

Obama Signs Doc-Fix Bill

A 64-35 Senate vote Monday cleared the measure through Congress. The law also delays nationwide implementation of the ICD-10 diagnostic codes until 2015.

The $21 billion bill would stave off a 24% cut in Medicare reimbursements to doctors for a year and extend dozens of other expiring healthcare provisions, such as higher payment rates for rural hospitals. The legislation is paid for by cuts to healthcare providers, but fully half of the cuts won't kick in for 10 years.

This patch comes after lawmakers failed to reach a deal on financing a permanent fix. Read the article in Modern Healthcare here.

Final Surge Pushes ACA Enrollment in Colorado

Enrollment for private health insurance coverage for this year ended Monday with a surge that led to 118,628 Coloradans signing up on the state exchange (Connect for Health Colorado). Some 12,000 people signed up during the last week of open enrollment.

Enrollments under the Affordable Care Act are expected to continue to climb over the next few weeks in Colorado. Those who started their applications prior to the deadline, but were unable to complete them, will be given more time.

Connect for Health Colorado reported yesterday (Tuesday) that between Oct. 1st and March 31st, more than 277,000 Coloradans obtained either commercial or public health insurance under the Affordable Care Act. Medicaid gained 158,521 enrollees. The federal program expanded under the law in Colorado to cover lower-income single adults as well as disabled people, mothers, pregnant women and children.

Read the article in the Denver Post here.

With ICD-10 Delayed, Answers Needed from CMS

As part of the House's Protecting Access to Medicare Act of 2014, which delays cuts in physician's Medicare rates (SGR) by another year, the national implementation of the next-generation medical coding system known as ICD-10 has also been pushed out. This delay has focused intense attention on the Centers for Medicare and Medicaid Services (CMS) to provide clarity for how hospitals, doctors, insurance companies should move forward.

The bill signed by President Obama on Tuesday prohibits CMS from enforcing any mandate to switch to the newer system until at least Oct. 1, 2015, but the act leaves CMS with many questions to answer. Among them:

• Will Oct. 1, 2015, become the new deadline?
• Will the agency allow organizations that are ready to implement ICD-10 to do so voluntarily?
• Would the agency scrap ICD-10 altogether and instead wait for ICD-11, which is due to be released in 2017?

Read the article in Modern Healthcare here.

Update from the National Rural Health Association on HR 3402

On Monday the Senate passed a 12-month delay of cuts scheduled to take affect under the Medicare Sustainable Growth Rate (SGR). In addition to the delay of these cuts, the bill (H.R. 3402) would extend the Medicare Dependent Hospital Program, Low-Volume Hospital adjustment, current rural and “super-rural” ambulance payment rates, and the rural “work floor” in the geographic practice cost index. The National Rural Health Association (NRHA) is appreciative of efforts made to extend these programs permanently in the Senate as well as the one year extension of the programs.

NRHA also sought to include regulatory relief as part of this bill, including addressing issues with the 96-hour condition of payment rule currently experienced by Critical Access Hospitals as well as mandating that supervision levels for outpatient therapy services be reverted to a level of “general.” While these issues were not included in the package passed Monday, NRHA will continue to advance these efforts through NRHA-supported legislation that has already been introduced in both the House and Senate.​

Will New Rules to Prevent Narrowing of Networks Drive Away Payers?

Healthcare providers have raised alarms over narrow provider networks in the public health insurance exchanges, but Moody's Investors Service says proposed rules to open up the networks could drive health plans to drop out of the new market.

Proposed federal rules that would limit the ability of health plans to craft narrow provider networks for the Affordable Care Act exchanges would benefit some hospitals, but tighter regulation could create an unbearable level of risk for insurers, market analysts say. In a healthcare "sector comment" released recently, Moody's Investors Service predicts that plans to limit narrow networks in 2015 would benefit rural hospitals and safety net hospitals because those facilities are the most likely to be left out of a narrow network.

"If [hospitals] are considered essential, that would protect them from being excluded from a narrow network," Moody's Senior Vice President Lisa Martin said Monday of the new rules under consideration at the federal Centers for Medicare & Medicaid Services. "[They provide] protection in terms of market share."  Read the article in Health Leaders Media here. 

New Revenue Projections Released in Advance of Budget Bill

Economists delivered new projections to the legislature's budget committee last week in advance of the introduction of the budget bill for fiscal year 2014-15. 

Revenues have rebounded solidly since the Great Recession, and the state expects a surplus of $257 million this fiscal year, and more than double that next year. Democratic Senator Pat Steadman of Denver says much of that money is already slated to be spent on education or other programs, or will go to trying to restore past budget cuts. “The legislature this year has a very ambitious number of proposals introduced for tax credits and new spending, not all of which I think can be funded under today’s revenue estimate," Steadman says. Read the rest of the article about the revenue forecast at Colorado Public Radio here.

On March 20, 2014 the Joint Budget Committee approved a state budget to be introduced in the House and Senate. The budget shows a total increase of 17.9% and a General Fund increase of 8.7% compared to fiscal year 2013-2014. Provider reimbursements will be expanded by 2% for children's hospitals, after care hours, surgery centers, and many other areas to improve health care costs for all. The State Legislature has also approved funding to the Department of Human Services for increased coverage, awareness, and help for those affected my mental illness. In addition to healthcare, the budget also allocates additional funding to higher education, K-12 education, flood and wildlife recovery.

Update on the Doc Fix

From the National Rural Health Association (NRHA): Early this morning the House Rules Committee posted a bill that would delay all scheduled cuts under the Sustainable Growth Rate (SGR) for 12 months. In addition to the delay in SGR cuts, the bill includes a number of rural Medicare extenders that NRHA has been advocating for. Specifically, the current ambulance payment rates for rural and super-rural trips, the "work floor" in the geographic practice cost index, the Medicare Dependent Hospital program, and the Low-Volume Hospital adjustment were included in the package. The therapy cap exception process is also included in this bill. 

While NRHA had hoped that a permanent fix for the SGR and permanent extension of the rural Medicare programs could be accomplished, we are pleased that the House has decided to include these critical programs in another patch. The inclusion of these programs will stave off draconian Medicare cuts for rural providers throughout the nation. It is important to note, however, that some of the offsets or "pay-fors" proposed in this bill would harm rural providers. Extension of the Medicare sequester and modification of Medicaid DSH payments will harm many providers.

Read what Modern Healthcare had to say about the doc fix in this article posted yesterday.

Colorado Legislature Readies to Tackle Telecom, Rural Broadband Reform - Again

Colorado House Democratic leaders say they plan to reintroduce telecommunications law reforms as early as next week, believing they have tweaked the legislation enough to get it over the hurdles that killed similar bills the past four years.

Rep. Angela Williams, the Denver Democrat who will sponsor the package, said that one of the keys to this year’s effort will be breaking the changes into three bills rather than one large proposal that united opponents to various facets of it in the past.

“We’ve been working since November with over 50 individuals, coalition partners and eight sponsors to develop what I call legislation that will change the landscape in Colorado,” Williams said. “What we’ve tried to do is find a good balance ... Everybody has had an opportunity and has had to give and take.” Read the article in the Denver Business Journal here.

With Less Than Two Weeks To Go, More Than 100K Coloradans Have Signed Up For Private Insurance

There's less than two weeks remaining for people who don't have health coverage to get it. Plans won't be available on demand after that until next fall. So far, more than 100,000 Coloradans have now signed up for new, private health insurance plans through the state's online shopping portal. That number is less than initial goals anticipated, but still good compared with other states in general. About 15,000 Coloradans bought health plans through Connect for Health Colorado in the past two weeks. That's the fastest pace since mid-December, when there was a surge of customers getting coverage that would start Jan. 1, 2014. Read the story in CPR news here.

Connect for Heath Colorado and Colorado Medicaid have released their most recent enrollment metrics as of March 17, 2014. Since October 1, 2013, Medicaid has enrolled 151,050 individuals under the Medicaid expansion and Connect for Health Colorado has enrolled 100,112 Coloradans in private health insurance coverage.

For more Medicaid enrollment metrics, including by gender, age and county of residence click here. Additional enrollment metrics from Connect for Health Colorado can be found here.

House Passes SGR Bill Without Rural Extenders, Senate Bill To Come to Floor Next Week

A once-bipartisan proposal to finally reform the deeply flawed way that Medicare pays doctors succumbed Friday to the partisan politics of Obamacare, particularly the unpopular individual mandate. The House voted 238-181 to replace the payment formula -- the complicated equation that for more than a decade has required annual "doc fixes" -- and to pay for it by delaying Obamacare's individual mandate for five years. Read the full article in Politico here.

An article posted Friday in Modern Healthcare said the legislation to pay for a permanent repeal of Medicare's physician-payment formula by delaying financial penalties for those without health insurance coverage by five years would increase the number of Americans without health insurance by about 13 million in 2018, the nonpartisan Congressional Budget Office reports. Read the article here.

S. 2110, the Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014 will likely come to the Senate Floor next week. This bill, introduced by Senate Finance chairman Ron Wyden late last week, is modified from previous Senate legislation but is similar to a strong rural bill that was reported out of the Senate Finance committee last December. S. 2110 contains a permanent fix to the SGR and includes all rural Medicare extenders (the Work geographic adjustment, Medicare payment for therapy services, Medicare ambulance services, the Medicare Dependent Hospital program and the Low Volume Hospital adjustment) and make all but the ambulance provisions permanent.

The bill’s passage is in doubt and strong grassroots support is needed. A likely partisan fight will occur over how to pay-for the bill. (Democrats support using savings from the scaling down of overseas conflicts and Republicans support eliminating the health insurance mandate in the ACA). Ranking Finance member, Orrin Hatch introduced a Republican bill (S.2122) which also contains the rural Medicare extenders but utilizes the ACA cuts as a pay-for.

Sweeping New Health Plan Rules Proposed

The Obama administration issued sweeping new proposed rules (PDF) late Friday affecting provider networks in insurance exchange plans, consumer access to quality information about plans, selection of plans in the small business exchanges, state rules on enrollment navigators, and reinsurance and medical loss ratios for insurers.

The Centers for Medicare and Medicaid Services (CMS) and (US Department of Health and Human Services) HHS said the proposed rules and draft standardized notices that issuers would be required to use when renewing or discontinuing plans will help to ensure consumers understand the changes and choices in the individual and group market.

“We are concerned that some enrollees, particularly those with certain complex medical conditions, are having trouble accessing in a timely fashion clinically appropriate prescription drugs,” read a preamble to the proposed rules.

Healthcare providers and consumer advocacy groups have complained about exchange health plans narrowing their networks to exclude a significant number of hospitals,physicians, clinics, and other providers. Plans say narrowing their networks is necessary to keep premiums affordable. The insurance industry and business groups are likely to view the new proposed rules with concern. Read the rest of the article in Modern Healthcare here.

House Passage of H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014

The following note regarding the passage of HR 4015 was released today, March 14th, by the National Organization of State Offices of Rural Health (NOSORH).  It provides some helpful insight into the next steps and political viability of the bill.    

Today, in a largely partisan vote, the House of Representatives passed a bill permanently repealing the Medicare Sustainable Growth Rate (SGR). H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, is the previously agreed upon bipartisan/bicameral framework put forth by the three Congressional Committees with jurisdiction over the SGR.

In addition to formally repealing the SGR, the bill:

• Authorizes annual automatic 0.5% payment update for five years (2014 – 2018).
• Consolidates the three existing Medicare quality programs into a single value-based incentive program.
• Provides incentives for providers to switch to alternative payment models (APMs) such as a 5% bonus to providers who receive a significant portion of their revenue from an APM.

Although the framework for the permanent fix has broad support, finding $138B over ten years to pay for the permanent fix has been a serious obstacle that has become increasingly partisan as today’s vote approached.

The bill passed today by the House, pays for the permanent fix with a Republican supported measure delaying the Affordable Care Act’s individual mandate for five years (starting next year). In addition to covering the cost of a permanent fix, the Congressional Budget Office has estimated that this “pay for” will save an additional $30B but will also result in 13 million more people being uninsured and an average increase of health insurance premiums between 10 and 20 percent. Democrats have attempted to use unspent war funds as the offset; however Republicans are adamantly against such a measure.

The bill still must pass through the Democrat-controlled Senate and be signed by the President in order to become law. The prospect of this bill, with a five year delay of the individual mandate as the offset, becoming law is extremely unlikely. The Democrats in the Senate are publicly opposed to this offset and the President has already stated he will veto the bill if it comes to his desk in this form.

Congress has until March 31st, when the current patch expires, to prevent automatic 24% cuts in Medicare payments to physicians under the SGR. Congress could still come together to figure out agreeable offsets for a permanent fix or they could pass another short-term patch to give them more time to come to an agreement on offsets. A nine-month patch to prevent the 24% cuts through the end of the year has been discussed.

With Deadline For Open Enrollment Looming, Nearly 4.2 Million Have Enrolled in Private Health Plans Sold Through Exchanges

More than 4.2 million people have enrolled in private health plans sold through the Affordable Care Act's insurance exchanges as of March 1, the Obama administration reported Tuesday.

However, the administration didn't say how many of those people have paid their first month's premiums or how many were previously uninsured.

The 4.2 million mark is well below the goal of 5.6 million that federal health officials had when open enrollment started last October. Open enrollment ends March 31 and the White House had hoped to enroll 7 million by that time. Read the rest of the article in Medpage Today here.

Are Rural Interests Being Met By the Colorado Legislature This Year?

As the legislature reaches mid-session, lawmakers are receiving an “incomplete” grade for addressing rural Colorado; being told by rural interests that they still have much more work to do.

Even though both sides of the aisle included rural Colorado in their talking points at the beginning of the session, provincial interests have watched as proposals they supported this year were killed. And they have not seen other bills move to address several important issues to them, including lowering healthcare premiums and addressing transportation needs. Read the full article in the Colorado Statesman here.

It's Looking Likely That We'll See Yet Another SGR Patch (That Makes 18!)

Lawmakers can't agree on a way to plug the $122 billion hole in the budget that would be created by the elimination of the reimbursement cuts and "chances are not great" for a permanent fix by the March 31 deadline, says the co-chair of the GOP Doctors' Caucus.

Congress likely will not find a permanent solution for the Sustainable Growth Rate (SGR) funding formula before the deadline expires at the end of March, and will impose yet another temporary fix and re-address the issue later this year, a leading House Republican says. Read the rest of the article in Health Leaders Media here.

For more information, check out last week's article by Emily Ethridge of CQ Roll Call, or read the article by Kristin Paulson, CIVHC's Senior Manager of Policy and Initiatives, on how the Doc Fix has the potential to improve readmissions here.

Bill Aims to Encourage Doctors to Try Rural Colorado

A bill making its way through the legislature this year aims to encourage doctors to give rural Colorado a try. Senator Aguilar's bill, Senate Bill 14-144, would require the state to study how rural residency programs aid rural communities in recruiting and retaining doctors, what effect massive medical school loans have on physician retention, and investigate possible future funding options from federal, state or private sources. Read the full bill here, and check out the rest of the article here at Colorado Public Radio.