Andy Hale Vice President, Advocacy Nebraska Hospital Association 2017 Legislative Agenda Andy Hale Vice President, Advocacy Nebraska Hospital Association

2017 Legislative Session 90 days Of 667 bills, 122 flagged as bills of interest to the NHA Budget Shortfall ($1.1 billion gap between projected revenues and spending for the two-year budget period ending June 30, 2019) Biennial Budget Taxes Corrections Health and Human Services

Opportunities & Unknowns Political landscape 18 new senators 11 Republicans 7 Democrats New Speaker, New HHS Committee Chair Whole New Committee Composition

Opportunities & Unknowns Political landscape 32 Republicans 15 Democrats One Independent, One Libertarian 34 Senators started the session with less than two years experience (70% of the legislature)

2017 Legislative Session’s BIG ISSUES 90 day session turned into 60 day session Rules of the Legislature Referencing of Bills Day 33, 2 bills signed into law (28 in 2015) Day 51, 14 bills signed into law (83 in 2015) Bills still advancing

NHA’s Priorities 2017 Priorities Behavioral Health Telehealth Medicaid Program Transformation Credentialing of Health Care Professionals

2017 Legislative Session Biennial Budget (2017-19) LB 327 – Biennial Budget (2017-2019) Original budget reduced provider rates for inpatient and outpatient PPS hospital services, physicians, and other providers such as case management by 3% (amounting to $12.4 million cut each year of a $850 million annual appropriations) The budget restores $2.6 million in funding to increase base rate for PPS hospitals (LB 513) Governor’s veto cut an additional $11.8 million in General Funds for Medicaid each year (described in veto message as expanding the 3% reduction contained in LB 327 to the other provider groups in Medicaid) (i.e. BH residential/non, Dental, AD waiver, AL)

2017 Legislative Session Bills of Interest Priority Legislation Support LB 61 – Interstate Medical Licensure Compact (HHS) LB 92 – Telehealth coverage (Banking, Commerce & Ins.) Oppose LB 327 – Biennial Budget (Appropriations) LB 368 – Helmet Law Repeal (T & T)

Interim Stakeholder Meetings MAINTAINING INTEGRITY OF STATE REIMBURSEMENT RATES DHHS Division of Medicaid & Long-Term Care Senators

Policy Recommendations BEHAVIORAL HEALTH Continue Working with Stakeholders Behavioral Health Coalition Sen. Stinner (LR 238) TELEHEALTH Develop Legislation and Assist in Implementation of Last Session’s Bills IMPLEMENTATION: Interstate Medical Licensure Compact Parity in Coverage Requirement NEW LEGISLATION: Parity in Reimbursement Requirement

Policy Recommendations MEDICAID PROGRAM TRANSFORMATION Monitor Heritage Health Implementation “New” Legislation: Legislative Oversight Committee (Sen. Bolz) HHS Committee – Heritage Health Quarterly Reviews Keep Senators Informed Continue working with DHHS on Reformation HEALTH CARE PROFESSIONALS CREDENTIALING Continue working with DHHS on Improving Licensure and Credentialing Policies Surgical Technologist Registry Proposal Workforce Development Efforts with DHHS

Policy Recommendations MAINTAINING THE INTEGRITY OF STATE REIMBURSEMENT RATES Continue working with DHHS and Senators Working with Heritage Health Stakeholders group to build argument for maintaining status quo next session

Policy Recommendations OTHER POTENTIAL LEGISLATIVE SUBJECTS: Law Enforcement Custody of Patients Opiate Crisis Initiatives Economic Development Housing Workforce $350 million potential revenue shortfall next biennium 3D digital mammography

Nebraska Hospitals Nebraska hospitals contributed more than $1.2 billion ($301 million of that in bad debt) in 2015 to support programs that benefited their communities. These programs included providing free care to individuals that were unable to pay, offering community education and outreach, providing scholarships and residencies for health professionals, subsidizing health services that are reimbursed at amounts below the cost of providing the care, conducting research, and incurring bad debt from individuals that choose not to pay their bills.

Nebraska Hospitals Nebraska’s hospitals are substantial contributors to the state’s economy.  They are economic engines for our regions, serving as the largest employer in many communities, significantly contributing to workforce development. Nebraska Hospitals also provide essential jobs throughout the state, employing over 42,000 Nebraskans and creating a demand for an additional 42,000 jobs, due to hospitals buying goods and services from other local businesses.  Every dollar spent by a hospital supports roughly $2.30 of additional business activity.  The goods and services hospitals purchase from other businesses create additional economic value for the community. 

Nebraska Hospitals Hospitals serving more rural regions of Nebraska provide vital care to the almost 670,000 people who live in those communities.  Today’s population has a higher rate of chronic disease, with nearly half of Americans having chronic conditions such as diabetes and heart disease.  Rural areas tend to have older, poorer, sicker populations.  That means they often have a higher percentage of patients covered by Medicare and Medicaid, which pay a lower reimbursement rate than private-sector insurers. 

Nebraska Hospitals Medicaid plays a critical role for Americans who live in small towns and rural areas. In fact, Medicaid is of greater importance in these areas than in metropolitan areas. Almost half of all children living in small towns and rural areas receive their health coverage through Medicaid. Research shows that Medicaid provides families with access to necessary health services.  In addition to the health benefits of Medicaid, it also protects the entire family against medical debt, bankruptcy and improves economic insecurity.   Because more families living in small towns and rural areas are enrolled in Medicaid than in more urban areas, they are more likely to reap the health and economic benefits and more likely to feel the effects of any changes made to Medicaid.

Nebraska Hospitals The Better Care Reconciliation Act (BCRA) would result in 22 million more people uninsured in 2026 and cut $772 billion in federal spending from the Medicaid program from 2017-2026.  The BCRA would increase the number of uninsured people under age 65 in Nebraska by 105,000 by 2022 and lead to about 6,800 fewer Nebraska jobs by 2026. Under the AHCA, Nebraska hospitals would face a 9% increase in uncompensated care (treatments and services not paid for by an insurer or patient) and 0.4 percentage point reduction in annual operating margins by 2026.  Nebraska could also lose between $245 million and $2.4 billion in federal Medicaid funds in 2026 under the AHCA.

Nebraska Hospitals The majority of people on Medicaid are children, the elderly, and the disabled. It is those populations that will be most harmed by the legislation. Medicaid provides health insurance for 124,000 low income children in Nebraska. Children make up 59.5 percent of Nebraska’s Medicaid population.  An estimated 25,000 of Nebraska’s children under 18 are uninsured.

Nebraska Hospitals Hospitals remain dedicated to ensuring that high quality health care services are available for Nebraska’s most vulnerable residents. Since the adoption of the Affordable Care Act (ACA) in 2010, Nebraska hospitals have experienced significant reimbursement cuts through both legislative and regulatory actions at the federal level. From 2010-2025, Nebraska hospitals will incur nearly $2.7 billion in cuts to Medicare payments. Additional cuts of more than $2.7 billion are also under consideration. When a hospital closes, the physicians, nurses, administrators leave, along with the health care infrastructure. Local businesses will be the next to leave. The schools suffer, they town suffers. There is a whole multiplier effect that really can be the death knell for some towns.

Heritage Health Heritage Health is a new health care delivery system that combines Nebraska’s physical health, behavioral health and pharmacy programs into a single comprehensive and coordinated system for Nebraska’s Medicaid and CHIP clients.  It is designed to improve access to care, enhance health outcomes and reduce costs by eliminating inappropriate and unnecessary care through the use of preventive services and improved care coordination.  The Nebraska Department of Health and Human Services implemented this change Jan.1

Heritage Health A survey of 30 our association’s member hospitals found that more than 10,000 claims with a total value of $24 million were unpaid by the plans for more than 60 days.  Credentialing, the process by which providers become eligible to provide services to Medicaid beneficiaries, has also been identified as an issue. The reimbursement problem is also affecting other Nebraska health care providers.  The Nebraska Hospital Association is a member of a newly formed Heritage Health stakeholder group which includes behavioral health, mental health, home health, nursing home and assisted living facilities and providers, along with physicians.  The total number of unpaid claims from this group when combined with ours is nearly $27.2 million.  3.3 million total claims processed.

Dual Eligible Change It is the intent of DHHS to avoid across-the-board provider rate cuts with the implementation of a new reimbursement model for dual-eligible Medicaid program participants. Under this new reimbursement model, Nebraska Medicaid will no longer reimburse for services utilizing the Medicare rate and will instead reimburse using the lower Medicaid rate. DHHS anticipates this will equate to a cost-savings of more than $11 million per year in General Fund expenditures, affecting both hospitals and physicians. The projected cost-savings to the State does not take into consideration the federal matching dollars that will be lost by these facilities.

Dual Eligible Change An analysis by three of the systems in Nebraska show that the expected impact of this change in Medicaid reimbursement is much greater. Nebraska Medicine expects a reduction of $3.7 million for the hospital, Regional West Health Services is anticipating a $1.7 million decrease in Medicaid reimbursement, and CHI Nebraska estimates the impact to be $4 million. These numbers draw concern that the department’s estimated impact may be woefully understated. Across the state, Nebraska’s critical access hospitals are expecting the worse with regard to this change. Though numbers are not available for all CAHs, the ones that have estimated the impact show between $80,000 to $130,000 in impact. These facilities anticipate a 100% reduction in payment for Medicare IP deductibles due the significant variance between the inpatient cost per diems for the two programs.

Advocacy WHAT CAN YOU DO? Legislators make decisions based on their core beliefs, on their knowledge of an issue, on input from experts, on personal counsel, and on feedback from their constituents. Communicate with your lawmakers. Lawmakers and their staff want to hear from you because you are a constituent. You are an expert that represents an organization that is vital to the well-being of thousands of people in their district.

Advocacy Personal visits and meetings Phone calls Letters and emails Political action. Be involved in the NHA PAC and VOTE.

Advocacy HOSPITAL TOURS Number of Employees Annual Payroll Expense Number of Clinics/Dept.’s/NF-AL Facilities Community Outreach Efforts/Partners Specialty Services (Most Proud of Overview) Recent Awards/Accolades Board Member Names/Companies Medicaid/Medicare Populations and your Dual Eligible Population Charity Care/Bad Debt Totals Issues with MCOs ie. Monies owed, issues with pre-auths Are there any state regulations you are having issues with that you would like changed

Discussion, Questions and Recommendations Andy Hale Vice President, Advocacy (402) 742-8146 Office (402) 708-3228 Cell ahale@nebraskahospitals.org