Washington Update

Alaska State Hospital & Nursing Home Association2020 Legislative Fly-in

February 26, 2020

2020: The Year Ahead

Congressional Activity

2020 Elections

Regulatory Action

Before we move on to 2020… $1.4 trillion spending bill for FY 2020

Delayed Medicaid DSH cuts through May 22

Used CREATES Act as a pay-forObtain samples to develop generic drugs

Did not include surprise medical bills or hospital offsets

Eliminated ACA taxesCadillac, Health Insurance, Devices

Impact of Impeachment Congressional gridlock? Polarized electorate

President’s Budget – FY 2021

Reminder: budget request is not binding

$478.5 billion in Medicare reductions / 10 years Reduce bad debt payments / $34 B Consolidate Graduate Medical Education (GME) / $52 B Cut uncompensated care payments / $88 B Post-acute Care Payment Cuts / $101 B Long-term Care Hospital (LTCHs) Payment Cuts / $9.4 B Site-neutral Payment Cuts / $164 B

$900 billion in Medicaid reductions / 10 years

Medicaid DSH First year of cuts: $4 billion$8 billion a year for FYs 2021-2025

Delay of ACA cuts in effectSupposed to take effect Oct. 1Now thru May 22

May 22 deadline establishes a vehicle for other health policy changes

What do we mean by “surprise medical bills”?

Typical scenarios are:

Patient accesses emergency services outside oftheir insurance network

Patient receives care from an out-of-network physician providing services in an in-network hospital

Key Issues – Surprise Medical Billing

Everyone supports taking the patient out of the middle; no balance billing in certain scenarios; federal government must act to oversee ERISA plans.

Areas of disagreementRate-SettingArbitration Transparency / contracting provisions

Congressional Activity on Surprise Medical Billing

Senate HELP and House Energy & Commerce “agreement”Protect patient from balance bills• Rate set at “median in-network” for out-of-network

payments• Arbitration for claims above $750• Contracting provisions• Waiting on legislative language

Congressional Activity on Surprise Medical BillingHouse Education and Labor Committee

• Protect patient from balance bills• Rate set at “median contracted rate” for OON payments• Arbitration for claims over $750 / $25k for air ambulance• Passed 32-13

House Ways and Means Committee Protect patient from balance bills No “benchmark rate” for OON payments Negotiation period, with mediated dispute resolution Passed by voice vote AHA Supported HR 5826 / Please Ask Your Member to Cosponsor

SMB ResourcesAlerts

Fact Sheets Talking Points Benchmark Rate Setting / Biased Toward Insurers Rural Impact Arbitration Fiction vs. Fact Provider/Health Plan Contracting Provisions

AHA Letters to Committees Letter of support for Ways and Means bill Letters to other committees of jurisdiction

https://www.aha.org/surprise-billing-resources

May 22

Addressing Rx Drug Prices

Grassley bill vs. Pelosi billPart D inflation cap and an international pricing

index in Part B (Finance approach)OR - Allow Medicare to negotiate lower prices on

most expensive drugs (House approach)What will Pres. Trump support?

Key date: May 22

If no comprehensive approach, move a smaller package?

Polling and Health Care

Polling and Health Care

Polling and Health CarePublic’s top domestic priorities the President and

Congress1. lower the cost of health care2. lower prescription drug prices

2020 Elections

Trends to Watch Changing demographics in key

states

Suburban districts remain important

Trump’s approval ratings high in red states, lower in swing states

MI, PA, WI

Senate Outlook

- Alabama - Doug Jones (D)

- Colorado - Cory Gardner (R)

- Arizona - Martha McSally (R)

- North Carolina - Thom Tillis (R)

- Maine - Susan Collins (R)

- Michigan - Gary Peters (D)

- Georgia (Special) - Kelly Loeffler (R)

- Kansas - open (R)

Seats Most Likely to Flip

House Outlook

Party House

Republican 197

Democrat 232

Independents 1

Vacancies 5

GA-6 Lucy McBathGA-7 Rob Woodall (open)IA-1 Abby FinkenauerIA-2 Steve Loebsack (open)IA-3 Cindy AxneIL-13 Rodney DavisIL-14 Lauren UnderwoodME-2 Jared GoldenMI-8 Elissa SlotkinMN-7 Colin PetersonNJ-3 Andy KimNM-2 Xochtil Torres SmallNY-11 Max RoseNY-19 Antonio DelgadoNY-22 Anthony BrindisiOK-5 Kendra HornPA-8 CartwrightPA-10 Scott PerrySC-1 Joe CunninghamTX-22 Pete Olson (open)TX-24 Kenny Marchant (open)UT-4 Ben McAdamsVA-2 Elaine Luria

Toss Up Seats

Source: Cook Political Report; 2/5/20

Campaign 2020• ApproachPresidential Resource to all candidates

CongressionalGood citizenshipEarly primary statesTargeted advertising

• Issue focusDrug pricingAffordabilityRural health careProtecting coverage

We Care… We VoteStrategies and Tactics Voter registration

Key questions for candidates

Hospital and employee engagement

Outreach to presidential campaigns

Website with tools and resources

Advertising in key states

Update from the Administration

Medicaid Fiscal Accountability Regulation: MFARCMS: Issued proposed rule to “promote

accountability and transparency” in how states finance their Medicaid program and fund their provider supplemental payments Makes significant changes to how states finance

non-federal share including changes to:

Provider taxes; bona fide donations; intergovernmental transfers (IGTs); and certified public expenditures (CPEs)

Increase CMS review of tax and donation arrangements

Establishes provider level reporting on Upper Payment Limit (UPL) supplemental payments

MFAR: Strategy• Develop impact data

• Comment periodAHA model comment letterEngage with other organizationsEngage Republican states and members

of Congress

• Continue outreach to Republican governors, state and congressional leaders

MFAR DataAHA Analysis The proposed rule is likely to

substantially reduce funding for the Medicaid program

Potential total program reductions between $37 to $49 billion, or 6% to 8% of total Medicaid spending

Potential hospital payment reductions between $23 to $31 billion, or 13% to 17% of Medicaid payments

AHA MFAR Comment Letter/Joint Release with AHCA

“Given that the proposal would severely curtail the availability of health care services to millions of

individuals and because many of its provisions are not legally permissible, the AHA requests that the agency

withdraw the proposed rule in its entirety.”

“CMS has provided little to no analysis to justify these policy changes, nor has the agency assessed the impact on providers and the patients they serve. Many of the proposed changes would also violate federal laws, including the current Medicaid statute. The AHA and AHCA request that the agency withdraw the proposed rule n its entirety.”

Stakeholders Voice Concern over MFAR Over 4,000 comment letters…

“…Governors request that CMS not move forward with the current proposed rule, as written…… “

“ NAMD encourages CMS to take additional time to open dialogue with states to refine the rule’s provisions going forward …………The broad impacts of MFAR cannot be overstated…. “

“…because of our significant concerns regarding the detrimental effect the proposal will have on communities, employers, and state economies, we urge CMS to withdraw the Proposed Rule.”

“…the Commission urges CMS not to implement new limits for supplemental payments and financing arrangements at this time because CMS has not fully assessed the effects of these changes.”

“Healthy Adult Opportunity” Waivers (Medicaid Block Grant)Optional for states Aggregate or per capita funding option Non-disabled, optional adult groups only Flexibilities: Higher cost sharing Different benefit packages Work requirements/other eligibility requirements Less oversight Shared savings with feds Partial expansions Enrollment Caps

Expect legal challenges

Department of Homeland Security Public Charge Rule DHS Final Rule implementation began Feb 24

(all injunctions lifted)

Numerous court challenges by states continue

Rule expands current public charge policy to include Medicaid (with exceptions), Food Stamps, Public Housing

AHA released a Member Advisory and Member Resource to help hospital staff assist patients and members of the community

(Note: AHA documents not intended as legal advice.)

Health Care in the Courts Texas v. USAmicus brief

AHA lawsuits340B Outpatient Cuts

Site Neutral Cuts to Protected Facilities

Disclosure of Negotiated Rates

Other lawsuitsassociation health plans, short-term plans, ACA’s cost-sharing

reductions, Medicaid work requirements, conscience rule and public charge

CoronavirusMajor hospital issues: Ensuring readiness/ability to treat Potential shortages of personal protective

equipment (e.g. masks) and drugsAHA actions: Coordination with federal agencies Advocating for hospitals to get info, tools,

resources Alerts on PPE, drug concerns Policy changes to conserve resources

Keep members informed: Daily updates, advisories, webinars

Medical Supply Chain Fragility Recent events causing concern: Novel coronavirus outbreak Cardinal Health surgical gown recall Efforts to limit ethylene oxide sterilization

Increased reliance on foreign countriesPotentially significant impact on PPEand pharmaceutical suppliesVery small margin for error -- even a minor adverse event can

result in major, prolonged disruptionsCommunication, mitigation and redundancy are key

Washington Update

Alaska State Hospital & Nursing Home Association2020 Legislative Fly-in

February 26, 2020