The timing of the letter has raised questions about whether it could be linked to efforts to pass the American Health Care Act.

June 1—Nearly half of the House of Representatives acted this week to urge approval of the kinds of charitable assistance that hospitals for years have sought to provide.

A bipartisan group of 184 members of Congress wrote a letter to Tom Price, MD, secretary of the U.S. Department of Health and Human Services (HHS), to urge that insurers be required to accept third-party premium and out-of-pocket assistance from “nonprofit charitable organizations.”

Such rules would reverse the Obama administration’s 2014 policy that allowed insurers selling plans that comply with requirements of the Affordable Care Act (ACA) to reject payments from most patient assistance programs—and urged insurers to do so.

“For approximately three years, this rule has encouraged [ACA-compliant plans] to discriminate against Americans with rare diseases, chronic illnesses and other catastrophic conditions by rejecting them on the basis of the insurance premium and cost-sharing assistance they receive from nonprofit organizations,” the House members wrote.

Hospital clients of Steven Hahn, an attorney at Hall, Render, Killian, Heath & Lyman, have been rejected by insurers when seeking to provide financial assistance for patients’ premiums and out-of-pocket costs either directly or through a hospital-affiliated foundation. However, payments made through unaffiliated charities have been accepted.

Legislators worried that the policy has allowed insurers to improperly reduce risk.

“This practice essentially allows insurers to ‘steer’ patients to the government or to other plans to avoid providing coverage,” they wrote.

But the insurers say the steering happens when providers give such assistance.

“Inappropriate steering and third-party payments increases costs for all consumers, and it risks harm to patients who are often eligible for public coverage options,” Cathryn Donaldson, a spokeswoman for America's Health Insurance Plans, said in an email when asked about the letter. “We continue to urge CMS [the Centers for Medicare & Medicaid Services] to prohibit these payments when there is alternative coverage for patients.”

The letter was not encouraged or officially backed by America’s Essential Hospitals (AEH), which represents safety net hospitals. However, AEH had previously urged the Obama administration to change the policy.

“I’m not shocked that there is action at this point, given that we’re looking at the cost of premiums continuing to be a big problem and people are starting to ask questions like, ‘Can we think outside of the box a little bit and come up with solutions here that make sense?’” said Shawn Gremminger, director of legislative affairs for AEH.

ACA marketplaces have seen average premium increases of about 25 percent for 2017 coverage and a growing number of insurers fleeing the market. More double-digit increases and insurer departures are projected for 2018. Those trends come on top of a recent HHS report that found that premiums more than doubled in the 39 federally operated ACA marketplaces since they were launched in 2014.

“The previous administration made a mistake frankly that they were not more flexible in terms of allowing interested parties to support premiums,” Gremminger said. “I’m hopeful that the new administration will be a little bit more circumspect and open that avenue back up again.”

A Big Effect

The proposed policy change could have a big appeal to hospitals.

“If indeed CMS was to reverse its policy position—a relatively strong prohibition on hospitals and other healthcare providers from stepping in, and encouraging qualified health plans to reject their payments—I do think you would see more hospitals move into this space and try to support individuals who are struggling financially and with some significant underlying health conditions,” Hahn said.

Existing hospital-operated assistance models have followed two guiding principles that CMS outlined in an FAQ issued Feb. 7, 2014:

1.Subsidies should be awarded based on financial need.

2.Premium or cost-sharing payments should cover the entire policy year.

Hahn cited the examples of United Way of Dane County, which has operated HealthConnect in Wisconsin with funding from UW Health, a large academic hospital system; and the Free Choice Healthcare Foundation, which uses hospital donations to provide financial assistance—beyond any government subsidies—for those who are unable to afford ACA coverage.

“I think the intent here would be to allow hospitals to engage in that type of payment and that type of support; it fits well with their charitable mission,” Hahn said.

Hahn acknowledged that hospitals potentially see financial returns from such assistance, “but an appropriately structured plan would not limit the recipient of the benefit to coming back to their organization.”

The requirement that such a program be allowed to benefit insurance enrollees regardless of the provider they choose to use was alluded to in the House letter.

AHCA Connection?

The timing of the letter has raised questions about whether it could be linked to efforts to pass the American Health Care Act (ACHA), the partial ACA repeal bill that passed the House last month and is under consideration in the Senate. That bill was estimated by the CBO to increase uninsured rates over the next 10 years by 23 million people, which would have a large financial impact on hospitals, as noted by the major national hospital associations—all of which opposed the bill.

“It could help lessen the impact of the potential financial ramifications on hospitals through the AHCA,” Hahn said.

Although the extent to which hospitals would financially benefit from such a policy change remains unclear, it would be expected to help ease the pressure of tightening margins.

The AHCA “and everything that’s potentially moving through the Hill has given our members more heartburn than we’ve seen since the ACA was enacted, so anything that opens up a potential avenue is something our members, generally speaking, would at least be open to generally considering,” Gremminger said.

AEH would want such a rule change not to be attached to the AHCA but to be passed as separate legislation, Gremminger said.

“As the Hill moves on from the AHCA, there could be a renewed push” on the premium assistance policy change, Gremminger said.

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

Publication Date: Thursday, June 01, 2017