Minnesota Hospital Association


March 13, 2017

MHA Newsline: March 13, 2017

In this issue

Hospitals contribute $4.5B in uncompensated care, health improvement programs to Minnesota communities

Past five years have seen nearly $1 billion increase in community benefit

Minnesota’s hospitals and health systems contributed more than $4.5 billion in programs and services in 2015 to benefit the health of their communities, an increase of 3.6 percent compared to 2014, according to the latest annual Community Benefit Report released by the Minnesota Hospital Association (MHA).

“Minnesota’s hospitals and health systems partner with their communities to promote physical and mental health and well-being beyond the physical walls of the hospital,” said Lawrence Massa, president and CEO of MHA. “We know that much of what influences our health happens outside of the doctor’s office – in our schools, workplaces and neighborhoods. Just as our care teams devote themselves to meeting the needs of patients in the hospital, our hospitals and health systems are driven to address their own community’s needs.”

Of the $4.5 billion, Minnesota hospitals provided $440 million in proactive services responding to specific community health needs, such as health screenings, health education, health fairs, immunization clinics and other community outreach, including in the areas of fitness, weight loss, mental health and diabetes prevention.

To learn more and view the full report, visit the MHA website. return to top

Investment, reinsurance, rebasing bills move forward

Legislation to allow public hospitals to invest funds in a variety of investments similarly to Minnesota’s nonprofit hospitals advanced in the House of Representatives last week. Carl Vaagenes, CEO, and Nate Meyer, CFO, Douglas County Hospital, testified before the House Health and Human Services Reform Committee. The bill (HF 559, Franson – R – Alexandria) advanced to the House floor. On the Senate side, it is scheduled to be heard on Thursday. MHA encourages public hospitals to contact their legislators in support of this bill.

Legislation to create a reinsurance fund continues to advance in the House and Senate. At this time, MHA prefers the House version of the legislation (HF 5, Davids – R – Preston) because it contains a broader funding stream. MHA has testified in support of a “shared responsibility” approach that does not rely exclusively on funding from the Health Care Access Fund. The Senate version of the bill relies on $180 million a year for both 2018 and 2019 from the Health Care Access Fund. MHA continues to stress that this fund will be needed to help pay for coverage for low-income Minnesotans.

A bill reauthorizing the Department of Human Services to use policy adjusters in the fee-for- service Medical Assistance program – commonly referred to as hospital rate rebasing legislation – passed the House Health and Human Services Finance Committee and was moved directly to the House floor. MHA’s testimony on HF 1559 (Dean – R – Dellwood) focused on maintaining the policy adjuster for mental health and obstetrics services.

With questions, contact Mary Krinkie, vice president of government relations, MHA, 651-659-1465, or Kristin Loncorich, director of state government relations, MHA, 651-603-3526.

Session bill tracker
For a complete list of 2017 legislative bills MHA is tracking, visit the MHA Member Center. For assistance accessing the Member Center, contact Emily Lowther, communications manager, MHA, 651-603-3495. return to top

ACA repeal legislation introduced and approved by House committees

House Republicans on March 6 introduced the American Health Care Act (AHCA), a bill repealing the Affordable Care Act (ACA). The bill makes significant changes to the current Medicaid entitlement program and to the ACA’s insurance provisions. The AHCA does not restore the hospital market basket reductions or Medicare DSH cuts used to fund the ACA coverage expansion.

AHCA Summary

Repeal of Medicaid Expansion

Expansion states, including Minnesota, will continue to receive the enhanced federal medical assistance percentage (FMAP) for individuals in the expansion population enrolled by Dec. 31, 2019. After that date, Minnesota can determine whether to continue to provide Medicaid coverage for individuals in the expansion population. On Jan. 1, 2020, if an individual from the expansion population is re-enrolled after a 30-day break in eligibility or enrolled for the first time, Minnesota would receive its traditional FMAP of 50 percent to cover that individual.

Medicaid Per Capita Cap Payment System
Beginning on Jan. 1, 2020, the AHCA transforms Medicaid from an open entitlement program to a per capita cap payment system, limiting federal Medicaid payments based a per enrollee cost of care for individuals within certain enrollment categories. The enrollment categories are: elderly, blind and disabled, children, non-expansion adults and expansion adults. 

The House bill sets fiscal year (FY) 2016 as the base year to determine targeted spending for each enrollment category in 2019 and subsequent years. Federal Medicaid payments to Minnesota and the other expansion states will increase by the medical care component of the consumer price index (CPI) for all urban consumers from September 2019 to September of the next year. Federal payments will be adjusted as enrollment in Minnesota’s Medical Assistance changes, but will not be adjusted to account for increased health care costs or in response to public health crises, such as natural disasters or epidemics.

Basic Health Plan – MinnesotaCare

Minnesota implemented the ACA’s Basic Health Plan and receives subsidized coverage for individuals ineligible for Medicaid and with incomes less than 200 percent of the federal poverty level. Ninety to 95 percent of MinnesotaCare’s cost is currently supported by federal funding. Under the AHCA, in 2020 MinnesotaCare’s federal contribution will eliminated. The Minnesota Department of Human Services estimates federal funding will be reduced by $500 million per year, shifting the responsibility to the state for covering MinnesotaCare’s 100,000 individuals with only state resources.

Insurance and Tax Provisions
The AHCA repeals the ACA’s employer and individual mandates and the means-adjusted advanced premium tax credits and cost-sharing subsidies. Instead it provides age-adjusted tax credits to help individuals buy insurance. The AHCA’s tax credits start at $2,000 for individuals under 30, rising to $4,000 for individuals over 60. Tax credits will be phased out for individuals with incomes of $75,000 and for families with incomes of $150,000. The tax credits will be capped at $14,000 per family.

The AHCA includes a continuous coverage incentive, under which an individual would be charged a 30 percent penalty for a lapse in insurance coverage greater than 63 days when they enroll in insurance. The penalty is assessed on all monthly premium payments made during the coverage year.

The AHCA maintains some of the ACA’s popular insurance mandates, including provisions allowing dependents to remain on their parents' plan until age 26, prohibiting discrimination against pre-existing conditions and prohibiting annual and lifetime limits on insurance coverage.

The Cadillac Tax, an excise tax on high-cost insurance plans provided by employers to workers, is delayed through 2024.

In 2018, the AHCA repeals the ACA’s taxes on medical devices, prescription and over-the-counter drugs, tanning services and health savings accounts (HSAs).

MHA has prepared additional resources on the AHCA for members including key messages and a full summary of provisions of most concern to Minnesota’s hospitals with impact data provided by the Minnesota Department of Human Services.

Legislative Outlook

The two bills collectively referred to as the AHCA have been approved by two House committees with jurisdiction over health care. The Budget Committee will combine the two committee-approved bills and the full House is expected to debate and vote on the legislation as early as this week. No House Democrats are expected to vote for the AHCA and members of the conservative House Freedom Caucus have expressed concerns that the bill’s tax credits to buy insurance too closely resemble those included in the ACA.

If the House approves the AHCA, the legislative outlook in the Senate remains uncertain. A number of Republican senators have expressed concerns with the House Republican bill. Sens. Rob Portman (OH), Shelley Moore Capito (WV), Cory Gardner (CO) and Lisa Murkowski (AK) expressed concern that the House bill does not adequately protect the Medicaid expansion population in their states. Their more conservative colleagues, Sens. Mike Lee (UT), Rand Paul (KY) and Ted Cruz (TX), expressed reservations that the AHCA does not go far enough to repeal the ACA. The Senate will consider the bill under reconciliation, an expedited budget processes allowing legislation to be approved with a simple majority vote, not the 60 votes required under regular order.

The legislative process is fluid and the bill could be modified as it is considered by the full House and Senate.

MHA Advocacy Efforts

Ben Peltier, vice president of legal and federal affairs, MHA, met with staff for Reps. Jason Lewis (R), Collin Peterson (D), Betty McCollum (D) and Erik Paulsen (R) and Sen. Amy Klobuchar (D) to communicate MHA’s support for health insurance coverage. MHA will continue to advocate for meaningful insurance coverage for all Minnesotans; coverage of all essential health care services; and for enhanced public health insurance program payments to providers to cover costs associated with caring for public program participants.

With questions, contact Briana Nord Parish, policy analyst, MHA, 651-603-3498, or Ben Peltier, vice president of legal and federal affairs, MHA, 651-603-3513. return to top

AHA issues letter outlining concerns about AHCA

The American Hospital Association on March 7 sent a letter to Congress outlining concerns with the American Health Care Act (ACHA), legislation to repeal and replace the Affordable Care Act (ACA). Writing on behalf of nearly 5,000 member hospitals, health systems and other health care organizations, the AHA asked Congress to protect patients and find ways to maintain coverage for as many Americans as possible.

AHA’s policy concerns with the AHCA include its reductions to the Medicaid program and its repeal of funding currently dedicated to provide coverage in the future while maintaining reductions to payments for hospital services. In addition, AHA expressed concern that evaluation of the AHCA is hampered by the lack of coverage estimates by the Congressional Budget Office (CBO).

Given these concerns, AHA does not support the AHCA in its current form. More information and additional resources are available for AHA members online. return to top

CMS issues MOON FAQ for hospitals; notice requirement effective March 8

The Centers for Medicare and Medicaid Services (CMS) has posted frequently asked questions (FAQ) regarding the Medicare Outpatient Observation Notice (MOON), including guidance on completing the free-text field that explains why the patient is not an inpatient. The FAQ is available on the CMS website: www.cms.gov/bni.

As of March 8, all hospitals and critical access hospitals must provide the standard notice to all Medicare beneficiaries who receive outpatient observation services for more than 24 hours. The MOON informs patients that they are an outpatient receiving observation services, not an inpatient, and the associated implications for cost-sharing and eligibility for Medicare coverage of skilled nursing facility services.

With questions, contact Briana Nord Parish, policy analyst, MHA, 651-603-3498, or Joe Schindler, vice president of finance, MHA. return to top

Funeral services for David Hagen

Longtime Minnesota hospital administrator David Hagen died Thursday, March 9, in Fargo. Hagen became administrator of A. L. Vadheim Memorial Hospital in Tyler in 1973 and then in 1978 became administrator of St. Joseph Hospital in Baudette. In 1982 he accepted the position of administrator of the Roseau Area Hospital District and served in this role until his retirement in 2004.

Hagen was an active participant in MHA during his career. He served on numerous committees, including the Small, Rural Hospital Committee; the Quality and Patient Safety Committee; and the Annual Meeting Task Force.

A memorial service will be held March 14 at 11 a.m. at West Funeral Home, 321 Sheyenne St., West Fargo, ND. Read the full obituary. return to top