Federal Advocacy 2009

1. Federal Advocacy2009

2. Congressional Activity on Reform

3. Process House Approved reform bill on November 7 Senate Currently debating bill Option 1 Option 2 Alternatively, a bill approved by either chamber could be “ping-ponged” between each chamber until an identical bill is passed by both.

4. Comparing Reform Proposals

5. Coverage Expansion

6. Coverage Expansion–How?

7. Includes surtax on high income taxpayers and tax on device manufactures. Major Financing Components House: Cost = $1.052 trillion. Fully offset over ten years. * Senate: Cost = $848 billion. Fully offset over ten years. * * Reflects gross cost of coverage expansions based on CBO scores.

8. Hospital and Health System Reductions House: $258 billion over ten years. Senate: $244 billion over ten years. House and Senate are generally consistent on the level of hospital cuts, with approximately $155 billion in Medicare and Medicaid reductions over ten years.

9. Key Hospital and Health System Provisions

10. Medicare Update Factor Reductions

11. DSH Reductions

12. Hospital Readmissions

13. Hospital Value-Based Purchasing

14. Geographic Variation

15. Independent Medicare Advisory Board

16. 340B Drug Discount Program

17. Medicare Payment Bundling

18. Accountable Care Organizations

19. Medicaid Payment Demos

20. Additional Provisions in Both House and Senate Bills

21. Rural Community Hospital Demonstration Project Extends demonstration project for two additional years and expands eligibility to all states Medicare Rural Hospital Flexibility Program Extends the FLEX program through 2012 Clinical Diagnostic Laboratory Services Reinstates provision that pays rural hospitals with less than 50 beds reasonable cost for clinical diagnostic laboratory services Other provisions: Extend MDH classification for two additional years MedPAC review of Medicare payments for rural areas Expansion of community health integration models in rural areas Rural Provisions in Senate Version Only

22. State Advocacy

23. State of Kansas Budget State of Kansas Budget State of Kansas Budget What’s the Focus for 2010…

24. Status of the Kansas State General FundFY 2009-2012 ARRA Funding Ends

25. Targeted, strategic budget reductions in individual agencies Reduce highway maintenance funds by $50M Reduce state funding to Bioscience Authority by $5M Reduce K-12 funding by $36M; Board of Regents funding by $2M Move unspent funds from prior years to SGF Reduce Medicaid reimbursement rates by 10% ($22M savings) Governor’s Budget Adjustment for SFY 2010Total: $258.9M SGF

26. Governor’s Medicaid Cuts SFY 2010 • Across-the-board Medicaid rate decrease of 10 percent • Rate reduction expected to be carried into SFY 2011 • Impacted Agencies: • KHPA • Ks Dept on Aging • SRS • Juvenile Justice Authority • Each agency may have some discretion

27. Legislature unlikely to address SFY 2010 budget Legislative focus will be on SFY 2011 budget Continue discussions with KHPA, elected officials Discuss impact and strategy with other health care associations Develop advocacy materials Model cuts for individual hospitals Share examples of the impact on hospital operations Economic impact of cuts Review all options Revenue enhancements Focused budget cuts KHA Advocacy Strategy

28. Purpose is somewhat unclear... To improve quality? To improve payments? To improve access? To improve non-NH services? Just cause… Variety of legislation introduced since 2003 KHPA requested workgroup to consider Disagreement between Nursing Home Associations Issues to consider Who’s included in the tax How is the tax calculated How are the funds used KHPA Board to consider possible legislation Nursing Home Provider Tax

29. Current law has been in place since 1980’s Limits cap on non-economic damages at $250K Two court cases are challenging the “constitutionality” of the law Kansas Supreme Court will decide Possible Rulings “Unconstitutional” “Constitutional” Legislative action needed Tort Reform – Awaiting the Decision

30. Health Care Data Transparency • CMS’ Price Release • MedPAR DRG Report • Negotiated Insurance Rates • Individual Hospital Estimates • American Hospital Directory • Consumer Checkbook • Insurance Database • Top 25 Inpatient/Outpatient Procedures • CMS’ Hospital Compare • AHRQ Quality Indicators • JCAHO’s Quality Check • HFAP • Leapfrog • Health Grades • WI CheckPoint • Insurance Initiatives (BC/BS Distinction Hospitals) • Healthcare Acquired Infections • Kansas Healthcare Collaborative • IRS 990 Form • CHA/VHA Model • CBISA • Rural Health Works

31. Statewide Smoking Ban 2007: Clean Indoor Air Legislation Introduced - No hearing or action taken • 2009: • Clean Indoor Air Legislation re-Introduced • Senate passes legislation twice • Legislation stalls in House • 2008: • Clean Indoor Air Legislation Heard in Senate Committee • - KHPA announces support • Two bills heard; but no action taken by either committee 2010: Focus on the House - Will a compromise be reached?

32. Questions…