Wolters Kluwer Announces White Paper Series on Healthcare Legislation

As federal lawmakers grapple with sweeping healthcare reform, Wolters Kluwer provides resources to help professionals stay ahead of reimbursement and compliance requirements

Wolters Kluwer Legal & Regulatory U.S. today announced the launch of an authoritative and timely white paper series to track updates and provide analysis on the American Health Care Act (AHCA) and Better Care Reconciliation Act (BCRA), the proposed replacements for the Affordable Care Act (ACA) under consideration in Congress.

The AHCA passed in the House of Representatives by a slim majority in May. A discussion draft of the BCRA was released in late June but the Senate has delayed any votes on the legislation until July. The first white paper in the series, entitled “How the AHCA Directly Impact Significant Parts of the ACA,” identifies and explains aspects of the ACA that are directly impacted by the AHCA. Wolters Kluwer’s white paper series will track the legislation as new versions of the bill become available.

“Considering the impending changes proposed by lawmakers, healthcare, legal and compliance professionals need to understand the evolving regulatory landscape,” said Paul Clark, Health Law Analyst for Wolters Kluwer’s Healthcare group. “Our series of white papers will help healthcare professionals to track changes in the legislation as they occur, measure the impacts, and manage compliance and reimbursement practices more efficiently.”

Download a free electronic copy of “How the AHCA Directly Impact Significant Parts of the ACA”

For those interested in daily, comprehensive coverage of the latest health law developments, Wolters Kluwer offers Health Law Daily providing in-depth analysis on new developments delivered directly to users’ device of choice every day. To learn more visit The Health Law Daily.

About Wolters Kluwer Legal & Regulatory U.S.

Wolters Kluwer Legal & Regulatory U.S. is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services.

Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide.

For more information about Wolters Kluwer Legal & Regulatory U.S., visit www.WoltersKluwerLR.com, follow us on FacebookTwitterand LinkedIn.

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Linda Gharib
Director, Communications
Wolters Kluwer Legal & Regulatory U.S.
Tel: +1 (646) 887-7962
Email: linda.gharib@wolterskluwer.com

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Proposed American Health Care Act could have negative financial impact on safety-net hospitals

A study by the Commonwealth Fund suggests that beginning in 2020, safety-net hospitals will see a reduction in revenue and margins as a result of cuts and spending caps by the federal government under the American Health Care Act (AHCA). Although the study believes that safety-net hospitals in rural areas of states that previously expanded Medicare coverage under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) will be hit the hardest, it suggests that all safety-net hospitals will be affected by this proposed law.

The study reviewed 660 safety-net hospitals (hospitals that receive Medicaid disproportionate share hospital (DSH) payments) to determine the impact of the proposed AHCA. These hospitals provided 30 percent of all uncompensated hospital care in 2015. The ACA had previously allowed states to expand Medicare coverage to individuals under the age of 65 with incomes up to 138 percent of poverty, and the federal government provided enhanced federal funding for these newly eligible Medicare members. Thirty-one states and the District of Columbia had expanded under the law.

Changes

The AHCA would eliminate the enhanced federal matching rate and the individual mandate requirement of the ACA, and beginning on December 31, 2019, the enhanced matching rate would only be given for individuals that had been enrolled by December 31 and have not lapsed coverage for more than a month. A standard federal matching rate would be provided for those enrollees after the cut-off date. Additionally, the AHCA would eliminate the ACA hospital presumptive eligibility benefit which allowed a hospital to enroll low-income patients in Medicaid and receive Medicaid payment for the services provided to these patients up to three months prior their enrollment. The study also noted that the ACHA would impose federal per-capita limits on Medicaid spending. Some changes would not be cuts or caps, such as the restoration of previous DSH cuts made by the ACA to states that did not expand Medicare, and safety net funding to non-expansion states that would supplement payments to safety-net Medicaid providers.

The study assumes that with these changes, the safety-net hospitals will see a decrease in revenue and margins, especially those safety-net hospitals in rural expansion states. It estimates that the elimination of the individual mandate will result in lower Medicaid enrollment and less individuals seeking hospital care due to lack of coverage, and assumes that this would result in revenue reduction for the safety-net hospitals. Additionally, the hospital preventive presumption and retroactive eligibility elimination could cause a loss in Medicaid revenue and hospitals could be subject to rising levels of uncompensated care. The caps on spending would also reduce the revenues and net income because the caps would reduce the federal Medicaid spending and the study assumes that the states will reduce overall spending and reduce provider payment levels. The study does note, however, that safety-net to non-expansion states and the restoration of DSH payments would increase revenues for safety-net hospitals.

The fund believes that although some of the measures may increase the revenue for the safety-net hospitals, the ACHA would overall negatively impact safety-net hospitals, with hospitals located in rural areas most affected. The study suggests that this regulation would cause these hospital margins to drop from 2.9 percent to 0.5 percent by 2026. Safety-net hospitals in states that expanded Medicaid may see uncompensated care costs double by 2016, and hospitals in rural areas of these states which have a high amount of Medicaid payers would be most negatively affected.

Medicaid’s role in low income individuals access to mental health services

Medicaid plays a significant role in providing treatment for low income individuals with mental health conditions. Medicaid recipients usage of mental health services “is comparable to and sometimes greater” than usage among privately insured individuals, according to a Kaiser Family Foundation (KFF) analysis. In 2015, Medicaid covered 22 percent of nonelderly adults with mental illness and 26 percent of nonelderly adults with serious mental illness. KFF found that Medicaid coverage of mental health services is often more comprehensive than private insurance coverage.

Analysis Findings

The analysis (1) describes individuals with mental health conditions, and (2) compares the mental health needs and the receipt of services among individuals without insurance, with Medicaid, and with private insurance. KFF provided the following findings:

  • Characteristics of nonelderly adults with mental illness. Twenty percent of nonelderly adults have a mental illness. They are predominantly white, female, and under 50. Five percent have a serious mental illness. Most are employed (63 percent), but 4 in ten have low incomes and 22 percent are below poverty. In addition, nonelderly adults with mental illness often have co-morbid conditions.
  • Utilization of mental health services. Most nonelderly adults with mental illness have either Medicaid or private insurance. Those with Medicaid are more likely to receive treatment than those with private insurance or without insurance. In addition, the receipt of psychiatric medication is more common among those individuals covered by Medicaid.

The role of Medicaid expansion

The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L. 111-152), (together referred to as the Affordable Care Act (ACA)) expanded Medicaid coverage to millions of low-income Americans. Sections 2001 and 2002 of the PPACA as amended by 1004 and 1201 of HCERA enabled many low-income individuals with mental health conditions to obtain coverage and access treatment through state Medicaid programs that choose to expand.

KFF pointed out that the American Health Care Act of 2017 (AHCA) (H.R. 1628), introduced by Republicans and passed by the House of Representatives on May 4, 2017 would limit enhanced federal support for the expansion population. The Congressional Budget Office projected that the reduction in federal funds would result in a cut of $834 billion over 10 years. “A reduction in federal funds of this magnitude would likely cause states to decrease Medicaid payment rates, covered services, and/or eligibility, limiting states’ ability to reach people with mental health conditions,” KFF said.

How the AHCA directly impacts significant parts of the ACA

Six weeks after pulling the American Health Care Act (AHCA) (H.R. 1628) from consideration, the House of Representatives passed an amended version of the bill on May 4, 2017, by a vote of 217 to 213. The legislation makes significant changes to some parts of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), in particular repealing the employer and individual mandates; scaling back Medicaid expansion; and repealing many of the taxes included in the ACA. The House also passed H.R. 2192, which would eliminate provisions that exempt members of Congress and congressional staff from state waiver provisions, in response to criticisms that the AHCA would affect all Americans except those voting on the bill (see The AHCA strikes back, Health Law Daily, May 4, 2017).

The Senate is now considering the legislation, and is likely to make substantial changes to the AHCA, or even start from scratch on new legislation. Moderate Republican senators in particular are concerned about the changes to Medicaid coverage that roll back the ACA’s expansion of the program.

This White Paper will compare provisions of the AHCA with the ACA. One thing to note at the outset is that the ACA as enacted in March 2010 included 10 titles, while the AHCA makes significant changes to only three of the titles. Much of the ACA, especially related to the Medicare program and the training of various types of medical practitioners, therefore, would remain intact if the AHCA passes in its current form.

In addition, the Trump Administration has stated more than once that it sees the rollback of the ACA as occurring in three stages—(1) legislation to repeal or change ACA provisions that would allow the Senate to pass a bill with a bare majority under the budget reconciliation process; (2) administrative actions to provide patients with additional insurance options and give states more flexibility in Medicaid spending, and (3) legislation on Trump’s other priorities including sale of health insurance across state lines and medical tort reform (see Is the American Health Care Act a ‘critical first step’ or unsupportable?, Health Law Daily, March 8, 2017).

Read further, “How the AHCA directly impacts significant parts of the ACA.”

For more information, visit http://health.wolterskluwerlb.com or call 800-449-6435.