Brock Slabach, MPH, FACHE Senior Vice President for Member Services National Rural Health Association Rural Health Federal Update Kentucky Rural Health Association

Improving the health of the 62 million who call rural America home. NRHA is non-profit and non-partisan.

National Rural Health Association Membership 2012

Meetings  RHC/CAH Conference Kansas City, MO, September 25-28, 2012  M&M Conference Asheville, NC, December 5-7, 2012  Rural Health Policy Institute Washington, DC, February 3-5, 2013  Annual Conference Louisville, KY, May 7-10, 2013

Looking Forward SGR Fix Required, 30% lower FFS to docs Sequester scheduled for January 1, 2% reduction Bush era tax cuts end Dec. 31 Payroll tax cuts end Dec. 31

A Little History CBO Options for Deficit Reduction Republican Proposal for rural, $14B cut House Ways & Means Dems: CBO option President’s Budget MedPAC Pay Fors on Budget Deal Feb –Medicare bad debt

States with Most MDH Facilities Tennessee: 24 Texas: 19 Illinois: 13 Mississippi: 13 Pennsylvania: 13 Kentucky: 11 New York: 11 North Carolina: 11 Louisiana: 10 Alabama: 8 Missouri: 8 Virginia: 8 Oklahoma: 8

MDH Medicare Dependent Hospitals Fact SheetFact Sheet - find out why MDHs are important to your community and rural America Letter to Editor Letter to Editor - send a letter to your local newspaper Letter to Members of Congress Letter to Members of Congress - send a letter to your members of Congress Letter to HHS Secretary Kathleen Sebelius from NRHA StudyStudy by North Carolina Rural Health Research and Policy Analysis Center on the economic benefits of rural MDH facilities. ListList of All Medicare Dependent Hospitals in the United States. MapMap of all Medicare Dependent Hospitals State by State.

Low-Volume Adjustment Fact Sheet - find out why Low-Volume hospitals are important Fact Sheet Letter to Editor - send a letter to your local newspaperLetter to Editor Letter to Members of Congress - send a letter to your members of Congress about your Low-Volume Hospital.Letter to Members of Congress

Why did Congress create varying Medicare payments to rural providers?

From 1980 to 1991 at least 360 rural hospitals were closed. -An average of 30 per year. The Inpatient Prospective Payment System (PPS) led to the decline in the numbers of rural hospitals.

Rural Hospital Closures:

Our Advocacy Message VALUE

Rural is Different Quality Measures: Hospital Strength Index™  Rural hospital performance on CMS Process of Care measures is on par with urban hospitals,  Rural hospital performance on CMS Outcomes measures is better than urban hospitals,  Rural hospital performance on HCAHPS inpatient patient experience survey measures is better than urban hospitals,  Rural hospital performance on price and cost efficiency measures is better than urban hospitals. © Copyright 2012 iVantage Health Analytics, Inc.

Rural is Different Emergency Department  The mean Total Wait Time in a rural Emergency Department is approximately half as long as the wait in an urban Emergency Department (29 vs. 56 minutes),  The mean Wait Time to see a Physician in a rural Emergency Department is nearly 2.5 times less than the wait in an urban Emergency Department (98 vs. 247 minutes),  More than 50% of all Emergency Department visits to Critical Access Hospitals were categorized as low acuity cases. © Copyright 2012 iVantage Health Analytics, Inc.

ACO Shared Savings (Medicare Beneficiaries)  Approximately $2.2 billion in annual cost differential (savings) occurred in 2010 because the average cost per rural beneficiary was 3.7% lower than the average cost per urban beneficiary,  Approximately $7.2 billion in annual savings to Medicare alone if the average cost per urban beneficiary were equal to the average cost per rural beneficiary,  Approximately $9.4 billion per year is the existing and potential differential between Medicare beneficiary payments for rural vs. urban including the opportunity for savings if all urban populations could be treated at the rural equivalent © Copyright 2012 iVantage Health Analytics, Inc. Rural Relevance Under Healthcare Reform Study

Rural vs. Urban Medicare Payments Average Medicare Beneficiary Payments for IP, OP and Physician Services by CMS Region (2010) © Copyright 2012 iVantage Health Analytics, Inc.

How do we fight… Investing in rural health care is needed for both the – rural patient (and maintaining access to care); and – rural community Demonstrate cost-effectiveness of providing care in rural America.

Other Issues Physician Supervision ICD10 Conversion Delay, Oct. 1, 2014 OIG Investigation of CAH’s

SCOTUS/ACA/rural impact 3 days of arguments Issues: –Anti-Injunction Act –Mandate – Commerce Clause –Medicaid – Spending Clause –Severability

The Ruling The individual mandate is a valid exercise of Congress’s Taxing Power. The mandate is not a valid exercise of the Commerce Clause. Other provisions, including ALL rural provisions will be implemented as outlined in the bill.

The Ruling - Medicaid The federal government cannot rescind ALL Medicaid funding if states don’t comply with new requirements. The federal government can refuse NEW funds if states don’t meet NEW Medicaid Rules.

The Ruling Important: The money, payment modifications, and workforce modifications that have already gone into effect will NOT be rescinded.

What it Means Political battle is reheating: Battles to remodel? Battle to repeal? House voted for 33 rd time to repeal part or all of ACA. Legal Battle continues (Medicaid) “The framers created a federal government of limited powers and assigned to this court the duty of enforcing those limits. The court does so today. But the court does not express any opinion on the wisdom of the Affordable Care Act. Under the constitution, that judgment is reserved to the people."

NRHA and Health Reform For reform to be effective in rural America, the access to care crisis in rural America must be eliminated. To resolve the access crisis, reform must eliminate: –The workforce shortage crisis –Long-standing payment inequities –Aging Rural Infrastructure –Health Disparities

ACA – Where the money goes… Kaiser Family Foundation new tool –Health Centers: Funding for Federally Qualified Health Centers to support infrastructure improvements and to expand access at new and existing sites.Federally Qualified Health Centers –Health Care Facilities and Clinics: Funding to support the infrastructure needs of health care facilities and to expand the availability of primary care clinics, including school-based health centers and nurse-managed health clinics. –Maternal and Pregnancy: Funding for new maternal health and early childhood programs, as well as abstinence education. –Medicare and Medicaid Special Projects: Funding for outreach and to support innovations in the two programs.. –Prevention and Public Health: Funding to improve public health infrastructure, combat public health concerns, and increase access to and the use of preventive services. –Workforce and Training: Funding awarded to support the expansion of the health care workforce through training and placement programs.

The Politics of Rural Battle for White House Battle for Congress

Possible big changes to WH and Congress…again.

Brock Slabach, MPH, FACHE Senior Vice President for Member Services National Rural Health Association THANK YOU

“Medicare Extenders”  Various provisions have expired or are set to expire at the end of FY or CY 2012  SGR Fix. Part of budget deal through end of year.  Hospital wage index improvement Extended reclassifications under section 508 of the Medicare Modernization Act (modifies payment to “super rural” facilities). Congress extended this provision through June, Phased out over time.  Extension of outpatient hold harmless provision Extended outpatient hold harmless provision and allows Sole Community Hospitals with more than 100 beds to also be eligible for this adjustment. Budget deal extended through Dec. 31, 2012, limited to less than 100 beds. Requires GAO/MedPAC Report.

Importance of Hold Harmless Provision Of the 138 hospitals with SCH status that received OPPS Hold Harmless or TOPS payments in CY 2009, 137 had a negative outpatient service margin on Medicare payments. If these hospitals were to lose hold harmless payments, their losses would be far more profound: 34 hospitals would have negative margins exceeding 50%; 103 hospitals would have negative margins exceeding 25%. Congress provides protections for SCHs because if these hospitals were to fail, residents of the communities they serve would be without hospital services.

Other Extenders A second group of “extenders” are set to expire at various points in 2012:  Medicare Dependant Hospital ACA reauthorized the Medicare Dependant Hospital Program. To be classified as an MDH, a rural hospital under 100 beds must have at least 60 percent of its days or discharges covered by Medicare Part A. MDH classification payments were extended in the Affordable Care Act. MDH is scheduled to expire for discharges occurring on or after October 1,  Extension of improved payments for low-volume hospitals Applied a percentage add-on for each Medicare discharge from a hospital 15 road miles from another hospital that has less than 1,600 discharges during the fiscal year. The Affordable Care Act § 3125 made this policy effective through fiscal year (FY) 2012.

Medicare Dependent Hospital Established in 1990 to support small rural hospitals who treat significant Medicare patients. To qualify as a MDH, a hospital must be – located in a rural area, – have no more than 100 beds, and – demonstrate that Medicare patients constitute at least 60 percent of its inpatient days or discharges. The Congressional Budget Office scored the one year extension in the ACA as costing less than Cost: $100 million over 10 years. 200 MDH hospitals.

Medicare Extenders  Extension of exceptions process for Medicare therapy caps Extended the process allowing exceptions to limitations on medically necessary therapy. Extended until Dec  Extension of payment for the technical component of certain physician pathology services. Extended provision that allows independent laboratories to bill Medicare directly for certain clinical laboratory services. In budget deal and expires June 30, 2012 then phased out.  Extension of the work geographic index floor under the Medicare physician fee schedule. Extended a floor on geographic adjustments to the work portion of the fee schedule, with the effect of increasing practitioner fees in rural areas. In budget deal and expires Dec. 31, 2012.

Medicare Extenders  Extension of ambulance add-ons Extended bonus payments made by Medicare for ground and air ambulance services in rural and other areas. Included in budget deal, expires Dec. 31, 2012 and requires GAO/MedPAC analysis.  Extension of physician fee schedule mental health add-on Increased payment rate for psychiatric services delivered by physicians, clinical psychologists and clinical social workers by 5 percent. NOT EXTENDED.

 Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas Reinstated the policy included in the Medicare Modernization Act of 2003 (P.L ) that provides reasonable cost reimbursement for laboratory services provided by certain small rural hospitals. Medicare and Medicaid Extenders Act of 2010 extended this policy through July 1,  Extension of Community Health Integration Models The Affordable Care Act temporarily removed the cap on the number of eligible counties in a State that can apply for the program. Valid through FY  Extension of Payment for Qualifying Hospitals in Low Spending Counties 1109 of the Health Care and Education Reconciliation Act of 2010 provides for additional funding of $400 million in FY2011 and FY2012 for hospitals located in counties that rank in the lowest quartile for Medicare Parts A and B per capita spending. This funding will expire at the end of FY 2012.

Offsets Bad Debt Reduction: Reduce bad debt reimbursement for ALL facilities to 65%. CAH and RHC (and all other facilities currently receiving 100%) will draw down over 3 years “Rebase” DSH payments: Rebase Medicaid DSH payments to States starting in 2021 “Rebase” Clinical Laboratory Payments starting in 2013 Reduce funding for Public Health and Prevention Fund Technical correction for FMAP Disaster funding

ACA in effect now Insurance reforms –High risk pools; $5 billion funded –Pre-existing conditions –Caps on coverage eliminated Preventive care benefits Covering children up to age 26 Closing of “donut hole” for seniors.

Workforce Improvements Significant Expansion of NHSC Significant funding of Title VII and Title VIII Rural Physician Training Grants Graduate Medical Education Improvements Increased Residency Slots in Rural Areas Grants to Improve Primary Care Training Health Care Workforce Commission

2008 Presidential Electoral Map

County by county

Counties “re-sized” to reflect population

The rural purple

POLITICS Job Approval Ratings ApproveDisapproveSpread President Obama Congress

U.S. House: “Blue Dog Democrats face extinction in next election” Of the 24 remaining Blue Dogs: five are not seeking reelection; More than a half-dozen others are facing treacherous contests in which their reelection hopes are in jeopardy.

The Battle for the U.S. Senate Polls: Firm D8 Likely D4 Lean D3 Toss-Up10 (MT, NV, ND, NM, MO, WI, VA, MA, ME, HI) Firm R5 Likely R3 Lean R0 DEMREPIND Election: 33 Seats up for election. 20 Democratic seats 13 Republican seats) Retiring: 6 Democrats, 3 Republicans, 1 Independent