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NAUH's 2010 Federal Policy Agenda
The passage of health care reform in March of 2010 – the Patient Protection and Affordable Care Act, or PPACA – will greatly enhance access to health insurance, and to health care, for millions of Americans in the coming years. Some aspects of the landmark legislation, however, pose a challenge to private, non-profit urban safety-net hospitals, and in the immediate future, the National Association of Urban Hospitals will focus largely on addressing three of those challenges.
Challenge Number 1:
Proposed Drastic Reductions in Medicare DSH Payments
PPACA calls for reducing Medicare disproportionate share (DSH) payments by as much as 75 percent a year. A cut of such magnitude could cripple many urban safety-net hospitals. Even though millions of Americans will gain health insurance as a result of reform, the anticipated reduction in the number of uninsured patients that constitute the charity care base of urban safety-net hospitals will never make up for a 75 percent reduction in the Medicare DSH revenue of these hospitals.
Medicare DSH payments also will remain important to urban safety-net hospitals because they will continue treating many low-income Medicare patients who cannot afford their co-pays and deductibles and who, after a lifetime of neglect of their health, require more resources to treat than the typical Medicare patient. In addition, Medicare DSH helps hospitals with their Medicaid shortfalls.
PPACA is expected to add somewhere between 15 million and 25 million Americans to the nation's Medicaid rolls, which means that urban safety-net hospitals' Medicaid shortfalls will increase, not decrease. Also, while reform will reduce the number of uninsured patients these hospitals treat, it is still projected to leave millions of Americans uninsured and as dependent as ever on safety-net hospitals. Medicare DSH payments help pay for the uncompensated care that private urban safety-net hospitals provide to such individuals.
As part of this new approach to Medicare DSH, PPACA also calls for returning a portion of the 75 percent Medicare DSH cut to hospitals based on some of the uncompensated care they provide. NAUH believes it is essential that future regulations quantifying that uncompensated care include two vital figures: first, hospitals' Medicaid shortfalls – the often considerable difference between what state Medicaid programs pay hospitals for care and what it actually costs to deliver that care; and second, the cost of the care that urban safety-net hospitals provide to their uninsured, non-legal resident patients – another considerable cost in many urban areas.
NAUH will urge Congress to reduce the size of the cut in Medicare DSH payments and to refine its approach to calculating how much of the cut to return to hospitals based on a truer measure of the uncompensated care those hospitals provide.
Continue reading:
Challenge Number 2: Proposed Drastic Reductions in Medicaid DSH Payments
Challenge Number 3: E nsure the Participation of Private Urban Safety-Net Hospitals in New Demonstration Projects
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