1. Kansas Hospital Association Legislative Update July 29, 2008

2. Kansas Hospital Association Medicare Legislation – HR 6331 Reimbursement for CAH Lab Payments –Beginning 1/1/09 CAHs receive cost-based reimbursement for clinical lab services Physician Payment Fix –Prevents a reduction and freezes 2008 fee schedule payment rates at current levels Medicare Rural Hospital “FLEX” Program –Extends FLEX program through Sept 30, 2010. Ambulance Services –For July 1, 2008 through 2009, reinstates add-on payment for ground ambulance services; 3% for rural and 2% for urban.

3. Kansas Hospital Association HPSA/MUA Proposed Rule Proposed rule in Feb. 28, 2008 Federal Register Combines HPSA/MUP formula Utilized “2 tier formula” –Based upon population to provider ratio of 3,000:1 Several factors incorporated –Barrier Free Population –Definition of Provider –High Need Indicator –2 nd Tier excludes providers under certain programs July 23, 2008 Federal Register withdraws proposed rule New proposed rule to be developed

4. Kansas Hospital Association RHC Proposed Rule Proposed changes include: –Location Requirements: Be located in “non-urbanized” area Be located in a shortage area (HPSA; MUA; Governor’s designated shortage areas) Provides exceptions to the location requirements –Staffing Requirements: Eliminates the restrictions on the RHC contracting with non- physician providers –Payment Requirements: Revises pymt methodology to be consistent with statutory requirements that set Medicare pymt at 80% of reasonable cost –Health, Safety, and Quality: Requires RHCs to establish a QAPI program

5. Kansas Hospital Association CAH Relocation Guidelines CMS’ Formal Guidance 75% Rule –Same Service Services available under similar terms/times –Same Population Zip Code Analysis; hospitals may use different methodology –Same Employees Medical staff, direct employees and FT contract staff count J-1 visa; NHSC employees may be excluded High turnover facilities may provide additional documentation Necessary Provider Designation – must meet same criteria CMS now provides preliminary determinations based on CAH letters of attestations and projections Final approval only will be granted once the hospital has relocated and evidence confirming compliance is provided Contact KHA if considering Relocation; Large Renovation

6. Kansas Hospital Association Legislative Outlook - 2009 Health Reform (Part II?) –Tobacco tax increase –Statewide smoking ban –Premium Assistance or SCHIP “Medicaid Transformation” –Identified by KHPA –Subcommittee to discuss possibilities Workforce Related Issues –Wichita Center for Graduate Medical Education –Nursing/Allied Health Shortages

7. Kansas Hospital Association What Can You Do? Meet with your Legislator –Invite to hospital –Need help, let KHA know Find the connections –Trustees –Staff –Other community members