1. Kentucky Chapter HFMA Winter Institute Stephen P. Miller Kentucky Hospital Association January 24, 2013

2. FEDERAL ISSUES Fiscal Cliff Fix American Taxpayer Relief Act (ATRA) Permanently extends middle class tax cuts Postpones sequester for two months One year “doc fix” - $30 billion

3. FEDERAL ISSUES (cont’d) Doc Fix – Hospitals Cover the Cost $10.5B downward adjustment in annual update $4.2B additional Medicaid DSH reductions $4.9B end stage renal payments $2.0B reduce risk-adjusted payment for Medicare Advantage

4. FEDERAL ISSUES (cont’d) These cuts are “in addition” to: Cuts contained in ACA $11B Medicare cuts in sequestration $5.8B From Hospital 2% Reduction Ky. Approx. $100M Includes CAHs

5. FEDERAL ISSUES (cont’d) New Fiscal Cliff Sequestration – Hospital Payments April 1 Debt Ceiling – Possible Three-month Delay Continuing Resolution or Budget

6. FEDERAL ISSUES (cont’d) Reimbursement areas that survived ATRA E&M Codes CAHs Bad Debts GME Likely targets for future “savings”

7. FEDERAL ISSUES (cont’d) Wage Index HHA Secretary proposed changes in April 2012 Report – Required by ACA CMS, Congress and MedPAC want to change methodology – No Agreement

8. FEDERAL ISSUES (cont’d) Wage Index (cont’d) Massachusetts “windfall” has increased scrutiny Cape Cod Hospital Reclass from CAH to PPS Impact on Rural Floor+$200M to MA - $13M for KY

9. STATE ISSUES MCOs and MCOs 2013 Legislative Session - Legislators must hear from YOU about YOUR hospital problems – Personal - Hospital Employees and Trustees - Nitty Gritty Examples

10. STATE ISSUES (cont’d) Issues – ER Assessment Fee Network Adequacy after Terminations Claims Denials Prompt Pay Substantial Increase in A/R Payments to PCC – Not hearing from hospitals

11. STATE ISSUES (cont’d) Survey sent to every CEO and CFO Account Receivables Medicaid Admissions, Denials and Re-admits Change in PCC Payments

12. STATE ISSUES (cont’d) Need data to counter Cabinet’s position that increase in A/R is due to hospitals not filing “clean claims” Survey will continue quarterly

13. STATE ISSUES (cont’d) Other Issues Medicaid Expansion45% Increase Exchanges Medicaid DSH – 50% less funding Revamp State Methodology