Among provisions of an expected ACA repeal-and-replacement bill are a “freeze” on Medicaid spending and a reversal of planned DSH cuts.

March 6—Members of Congress were split along partisan lines over the impact on hospitals of a Republican bill that is expected to begin advancing this week to repeal and replace at least some of the Affordable Care Act (ACA).

Congressional Republicans addressing a Washington, D.C., meeting of the Federation of American Hospitals (FAH) said the ACA replacement legislation was needed to save hospitals from increasingly narrow networks, patients with unaffordable deductibles, payment-rate cuts, and regulatory burdens. Democratic members countered that the repeal bill would lead to Medicaid rate cuts and more uninsured patients seeking uncompensated care.

A bill to repeal the ACA and replace at least some of its components was expected to be introduced March 6, with voting scheduled to begin March 8 by two House panels—the Energy and Commerce and the Ways and Means committees.

One of the key speakers at FAH, Rep. Marsha Blackburn (R-Tenn.), who is helping to write the ACA replacement bill as a member of the Energy and Commerce Committee, said the bill will end many ACA provisions, including the insurance mandate, medical device and insurance taxes, and the Independent Payment Advisory Board. The bill also will “freeze” Medicaid spending and eliminate the ACA’s cuts to disproportionate share hospital (DSH) payments.

“These are important to get right so you have a little bit of certainty about what to expect,” Blackburn said.

Blackburn also underscored the need for states to have more flexibility in their approach to Medicaid. Such flexibility was missing from an earlier draft replacement bill that was recently leaked.

Sen. Marco Rubio said greater state flexibility would provide savings more effectively than would any kind of broad-based Medicaid cuts.

A key focus of the repeal bill will be how to treat the 19 states that did not expand Medicaid eligibility as authorized by the ACA, Rubio said. However, Republicans addressing the hospital leaders did not say how the bill will do so.

Democrats blasted the expected shift of federal Medicaid funding from an open-ended entitlement to one based on per capita caps, saying such a change likely will push states to reduce Medicaid payments and cut access to care for enrollees.

“Such cuts would adversely affect hospitals across the country,” said House Minority Leader Steny Hoyer (D-Md.).

Responding to Republicans’ criticism of the ACA’s provider cuts, Hoyer said the replacement bill’s authors have no intention of increasing hospital payment rates. Hoyer also reminded hospital executives that needed fixes were not included in the ACA because Democrats passed it using reconciliation—the same legislative process Republicans are planning to use to pass the repeal and replace bill.

Hoyer thanked the hospital executives for their help in pushing many state legislators to expand Medicaid eligibility and said many hospital leaders since have told him that the ACA provided economic benefits to their organizations. Similarly, Sen. Claire McCaskill (D-Mo.) said hospitals in her state have reported reductions in their uncompensated care costs—the first decrease in a decade—since enactment of the ACA’s coverage expansion.

“The reality is that not too many policymakers are talking about what happens to hospitals if we repeal the ACA, what happens with the DSH reduction, and most importantly I’m not even sure most people on Capitol Hill even understand the issues surrounding productivity adjustments and the dramatic impact that has on your ability to manage the finances of your hospitals,” McCaskill said.

Replacing Marketplace Coverage

Rubio’s proposal to provide refundable advance tax credits for buying coverage is an indication of how the GOP replacement bill could accommodate the 20 million enrollees covered in the ACA’s government-run marketplaces and non-ACA individual plans. That approach would provide funding regardless of whether an individual has earned enough for tax deductions to cover the cost of coverage.

Rubio said such an approach, in conjunction with dropping the ACA’s requirements on covered conditions, would allow insurers to design products that address endemic problems of high deductibles and narrow networks that limit what use enrollees derive from their costly coverage.

Rubio also discussed the use of uncompensated care pools and funding for state high-risk pools for those who lack insurance and have chronic diseases or preexisting conditions.

Congressional Pressure

Republicans and Democrats urged hospital leaders to reach out to their congressional representatives to help inform the ongoing debate on repeal and replacement of the ACA.

“You need to remind my colleagues about the negative economic consequences of repeal, if you in fact believe that,” Hoyer told the hospital executives.

Rubio said hospitals need to be part of the solution by bringing real-world experience to the discussion in Congress. He also urged members of Congress not to rush repeal-and-replace, which Republican leaders plan to wrap up by next month.

“I would much rather get it right than get it first and then have to come back to do it over,” Rubio said.

Sen. Cory Gardner (R-Colo.) and Blackburn also emphasized the importance of hospitals in rural areas.

“We know the importance of getting the reimbursements right,” Blackburn said.

The coming repeal-and-replace is likely to be only the first of at least three replacement bills expected over the next couple years, including a package focused on patient-centered care, Blackburn said.  

Beyond repeal-and-replace, Blackburn said Congress will encourage Tom Price, secretary of the U.S. Department of Health and Human Services, to use his authority under the ACA to provide “relief” to the public and to providers. That includes rolling back some of the $53 billion in healthcare regulations issued by the Obama administration, Blackburn said.

“Our goal is to make certain that we find a pathway for everyone to have access to affordable health care, and we feel like we are on that pathway,” Blackburn said. “We also want to make certain that our providers are made whole through this process.”

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Monday, March 06, 2017