Topics this week:
- Disproportionate Share Hospital (DSH) Payment Reform
- GME: Children’s Hospital GME Program
- Health and Human Services (HHS) awards $1.5 Billion for State Exchanges
- Gun Violence and Mental Illness
- Health Policy 101: Graduate Medical Education (GME) funding
1. Disproportionate Share Hospital (DSH) Payment Reform
Many hospitals provide charitable care to their communities, acting as a ‘safety net’ of uninsured and underinsured patients. This is a very costly service provided to the community, and to help cover some of the cost incurred many hospitals received funds from Medicare and Medicaid DSH programs. Historically DSH represents the largest federal funding for uncompensated care, with over $11.3 Billion paid out for care in 2012. With the implementation of the ACA, Center For Medicare & Medicaid Services (CMS) predicts the number of uninsured to fall, and so the eligibility for DSH funds must change. Currently CMS is revising the formula for how hospitals will receive funding. Starting in FY2014 DSH payments will be cut to 25% of what they were projected to be under the preexisting formula. The remaining 75% of funds will be reduced proportionate to the number of uninsured patients treated since 2013. Any additional money that is unused will then become part of a ‘pool’ of funds for hospitals to qualify for based on the amount of ‘uncompensated care.’ To prepare for the change of DSH distribution, stakeholders are discussing how to to measure and report the changes in uninsured patients from 2013-2014, as well as how to measure and define ‘uncompensated care’. The AAMC, as well as other contributors to the discussion, argue that GME cost as well as government payment shortfalls should be included in the determination of ‘uncompensated care’.
Sources:
http://www.jdsupra.com/legalnews/national-provider-call-on-fy-2014-medica-37572/
http://www.medicaid.gov/AffordableCareAct/Provisions/Provider-Payments.html
http://www.apha.org/NR/rdonlyres/328D24F3-9C75-4CC5-9494-7F1532EE828A/0/NHELP_DSH_QA_final.pdf
https://www.aamc.org/advocacy/washhigh/
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2. GME: Children’s Hospital GME Program
The Children’s Hospital Graduate Medical Education Payment Program provides federal funds for free standing Children’s hospitals to maintain their GME programs. CHGME was created in 1999 because Children’s hospitals have a small Medicare population, making the collection of traditional Medicare Direct/Indirect Graduate Medical Education (GME) funds limited. Currently, there are 55 US hospitals that benefited from the $265 million dollars in FY2012, less than 1% of the total GME funds. Last year the 112th congress twice approved this bill with bipartisan support, however was unable to see it passed. Chair Joe Pitts (R-Pa.) and Frank Pallone (D-N.J.) of the House Energy and Commerce Health Subcommittee reintroduced the Children’s Hospital GME Support Reauthorization Act. This act, if passed, will secure funding for the CHGME program through FY2017 with a maximum of $330 million a year.
In addition to the CHGME bill, the committee will also be reviewing HR 225 to allow the National Institutes of Health (NIH) to fund pediatric research networks.
Sources:
http://bhpr.hrsa.gov/childrenshospitalgme/index.html
http://thehill.com/blogs/healthwatch/mental-health/278095-week-ahead-mental-health-debate-moves-to-congress
https://www.aamc.org/advocacy/washhigh/
http://childrenshospitals.typepad.com/withallourmight/2013/01/bill-to-reauthrorize-chgme-and-promote-pediatric-research-introduced-in-house.html
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3. Health and Human Services (HHS) awards $1.5 Billion for State Exchanges
To support the development of insurance exchanges under the ACA the federal health department announced $1.5 billion of new grants. Health insurance exchanges are a central component of the ACA helping consumers to have more control of their healthcare choices. Please read more about in our Health Policy 101: Insurance Exchanges.
Sources:
http://thehill.com/blogs/healthwatch/health-reform-implementation/277757-hhs-announces-15b-for-state-exchanges
http://www.kaiserhealthnews.org/Daily-Reports/2013/January/18/exchanges-and-health-law-implementation.aspx
----------
4. Gun Violence and Mental Illness
President Obama recently released his plan to address gun violence in the US by signing a $500 million directive with 23 separate executive orders. Of these actions to curb gun violence, 4 were aimed directly at mental health services. These directives included:
i. The release of clarification to health care professionals that no federal law prohibits them from reporting threats of violence to the appropriate authorities
ii. The release of a letter to state health officials clarifying the scope of Medicaid coverage of mental health services
iii. A commitment to finalized mental health parity regulations
iv. Launch a national dialogue on mental health
Another clarification that was made was that there are no federal laws that prohibit a physician from asking about firearm possession and safety during an examination. One of the fastest ways that some states will be able to provide additional mental health services is by opting for Medicaid expansion under the ACA which would provide federal mental-health funds.
Sources:
http://www.medscape.com/viewarticle/777730
http://www.kaiserhealthnews.org/Daily-Reports/2013/January/18/mental-health-and-gun-violence.aspx
http://www.medscape.com/viewarticle/778013
----------
5. Health Policy 101: Graduate Medical Education (GME) funding
Today newly graduated physicians go on to complete their Graduate Medical Education (GME), otherwise known as residency, with one of more than 1,100 teaching hospitals across the country. During their residency, physicians receive instruction from more experienced physicians as well as a salary and benefits. Before World War II, few medical school graduates went on to complete graduate medical education (GME). At that time GME was funded largely by hospitals who built the expense of teaching and supporting training physicians into patient costs. In 1965, with the creation of Medicare, the federal government concluded that “…educational activities enhance the quality of care in an institution, and it is intended, until the community undertakes to bear such education cost in some other way, that a part of the net cost of such activities (including stipends of trainees, as well as compensation of teachers and other costs) should be borne to an appropriate extent by the hospital insurance program (Medicare).”
To this day the majority of funding for GME comes from the federal Medicare budget with funds also being contributed by the Department of Veteran’s Affairs, state, and private funds. Annually the federal government contributes about $9.5 billion Medicare dollars and $2 billion Medicaid dollars to the training of physicians. Funding from the federal government for GME comes through several channels:
1. Direct GME (DME): covering the salaries of residents as well as their supervising physicians’ time (this accounts for approximately $3 billion of the $9.5 billion spent on GME annually by Medicare)
2. Indirect GME (IME): covers added costs associated with being a teaching hospital such as increased inpatient say, increased tests and ancillary services, greater severity of illness, etc. (this accounts for approximately $5.5 billion of the $9.5 billion spent on GME annually by Medicare)
3. Children’s Hospital GME: provides funding specifically for Children’s Hospitals which, due to their patient population, has fewer opportunities to qualify for Medicare funds (this accounts for approximately $265 million dollars spent on GME annually by the Health Resources and Services Administration, HRSA)
In 1997 with the passage of the Balanced Budget Act, significant caps were placed on the number of residency spots that federal dollars will fund. This limits the total GME dollars that a teaching hospital can receive as the amount of funds are largely determined by the number of residents. Currently, the number of residency spots that Medicare will fund is still maintained at 1997 numbers, leading many to wonder how a looming doctor shortage can be averted without increasing the opportunities for residency training which is now an established requirement for medical licensure.
In addition to a limit on the number of residency spots that will be supported by federal GME funds, the amount of funding has also been slowing decreasing for the residency positions. The current projected reduction in GME funding for FY 2013 has a 10% cut to IME ($9.7 billion over 10 years), as well as $177 million dollar cut to Children’s Hospital GME funds.
Sources:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1495035/
http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=73
https://www.aamc.org/newsroom/reporter/march2012/276736/budget.html
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
Alexandra Printz – National Delegate
----------------------------------------------------------------------------
To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html
Many hospitals provide charitable care to their communities, acting as a ‘safety net’ of uninsured and underinsured patients. This is a very costly service provided to the community, and to help cover some of the cost incurred many hospitals received funds from Medicare and Medicaid DSH programs. Historically DSH represents the largest federal funding for uncompensated care, with over $11.3 Billion paid out for care in 2012. With the implementation of the ACA, Center For Medicare & Medicaid Services (CMS) predicts the number of uninsured to fall, and so the eligibility for DSH funds must change. Currently CMS is revising the formula for how hospitals will receive funding. Starting in FY2014 DSH payments will be cut to 25% of what they were projected to be under the preexisting formula. The remaining 75% of funds will be reduced proportionate to the number of uninsured patients treated since 2013. Any additional money that is unused will then become part of a ‘pool’ of funds for hospitals to qualify for based on the amount of ‘uncompensated care.’ To prepare for the change of DSH distribution, stakeholders are discussing how to to measure and report the changes in uninsured patients from 2013-2014, as well as how to measure and define ‘uncompensated care’. The AAMC, as well as other contributors to the discussion, argue that GME cost as well as government payment shortfalls should be included in the determination of ‘uncompensated care’.
Sources:
http://www.jdsupra.com/legalnews/national-provider-call-on-fy-2014-medica-37572/
http://www.medicaid.gov/AffordableCareAct/Provisions/Provider-Payments.html
http://www.apha.org/NR/rdonlyres/328D24F3-9C75-4CC5-9494-7F1532EE828A/0/NHELP_DSH_QA_final.pdf
https://www.aamc.org/advocacy/washhigh/
----------
2. GME: Children’s Hospital GME Program
The Children’s Hospital Graduate Medical Education Payment Program provides federal funds for free standing Children’s hospitals to maintain their GME programs. CHGME was created in 1999 because Children’s hospitals have a small Medicare population, making the collection of traditional Medicare Direct/Indirect Graduate Medical Education (GME) funds limited. Currently, there are 55 US hospitals that benefited from the $265 million dollars in FY2012, less than 1% of the total GME funds. Last year the 112th congress twice approved this bill with bipartisan support, however was unable to see it passed. Chair Joe Pitts (R-Pa.) and Frank Pallone (D-N.J.) of the House Energy and Commerce Health Subcommittee reintroduced the Children’s Hospital GME Support Reauthorization Act. This act, if passed, will secure funding for the CHGME program through FY2017 with a maximum of $330 million a year.
In addition to the CHGME bill, the committee will also be reviewing HR 225 to allow the National Institutes of Health (NIH) to fund pediatric research networks.
Sources:
http://bhpr.hrsa.gov/childrenshospitalgme/index.html
http://thehill.com/blogs/healthwatch/mental-health/278095-week-ahead-mental-health-debate-moves-to-congress
https://www.aamc.org/advocacy/washhigh/
http://childrenshospitals.typepad.com/withallourmight/2013/01/bill-to-reauthrorize-chgme-and-promote-pediatric-research-introduced-in-house.html
----------
3. Health and Human Services (HHS) awards $1.5 Billion for State Exchanges
To support the development of insurance exchanges under the ACA the federal health department announced $1.5 billion of new grants. Health insurance exchanges are a central component of the ACA helping consumers to have more control of their healthcare choices. Please read more about in our Health Policy 101: Insurance Exchanges.
Sources:
http://thehill.com/blogs/healthwatch/health-reform-implementation/277757-hhs-announces-15b-for-state-exchanges
http://www.kaiserhealthnews.org/Daily-Reports/2013/January/18/exchanges-and-health-law-implementation.aspx
----------
4. Gun Violence and Mental Illness
President Obama recently released his plan to address gun violence in the US by signing a $500 million directive with 23 separate executive orders. Of these actions to curb gun violence, 4 were aimed directly at mental health services. These directives included:
i. The release of clarification to health care professionals that no federal law prohibits them from reporting threats of violence to the appropriate authorities
ii. The release of a letter to state health officials clarifying the scope of Medicaid coverage of mental health services
iii. A commitment to finalized mental health parity regulations
iv. Launch a national dialogue on mental health
Another clarification that was made was that there are no federal laws that prohibit a physician from asking about firearm possession and safety during an examination. One of the fastest ways that some states will be able to provide additional mental health services is by opting for Medicaid expansion under the ACA which would provide federal mental-health funds.
Sources:
http://www.medscape.com/viewarticle/777730
http://www.kaiserhealthnews.org/Daily-Reports/2013/January/18/mental-health-and-gun-violence.aspx
http://www.medscape.com/viewarticle/778013
----------
5. Health Policy 101: Graduate Medical Education (GME) funding
Today newly graduated physicians go on to complete their Graduate Medical Education (GME), otherwise known as residency, with one of more than 1,100 teaching hospitals across the country. During their residency, physicians receive instruction from more experienced physicians as well as a salary and benefits. Before World War II, few medical school graduates went on to complete graduate medical education (GME). At that time GME was funded largely by hospitals who built the expense of teaching and supporting training physicians into patient costs. In 1965, with the creation of Medicare, the federal government concluded that “…educational activities enhance the quality of care in an institution, and it is intended, until the community undertakes to bear such education cost in some other way, that a part of the net cost of such activities (including stipends of trainees, as well as compensation of teachers and other costs) should be borne to an appropriate extent by the hospital insurance program (Medicare).”
To this day the majority of funding for GME comes from the federal Medicare budget with funds also being contributed by the Department of Veteran’s Affairs, state, and private funds. Annually the federal government contributes about $9.5 billion Medicare dollars and $2 billion Medicaid dollars to the training of physicians. Funding from the federal government for GME comes through several channels:
1. Direct GME (DME): covering the salaries of residents as well as their supervising physicians’ time (this accounts for approximately $3 billion of the $9.5 billion spent on GME annually by Medicare)
2. Indirect GME (IME): covers added costs associated with being a teaching hospital such as increased inpatient say, increased tests and ancillary services, greater severity of illness, etc. (this accounts for approximately $5.5 billion of the $9.5 billion spent on GME annually by Medicare)
3. Children’s Hospital GME: provides funding specifically for Children’s Hospitals which, due to their patient population, has fewer opportunities to qualify for Medicare funds (this accounts for approximately $265 million dollars spent on GME annually by the Health Resources and Services Administration, HRSA)
In 1997 with the passage of the Balanced Budget Act, significant caps were placed on the number of residency spots that federal dollars will fund. This limits the total GME dollars that a teaching hospital can receive as the amount of funds are largely determined by the number of residents. Currently, the number of residency spots that Medicare will fund is still maintained at 1997 numbers, leading many to wonder how a looming doctor shortage can be averted without increasing the opportunities for residency training which is now an established requirement for medical licensure.
In addition to a limit on the number of residency spots that will be supported by federal GME funds, the amount of funding has also been slowing decreasing for the residency positions. The current projected reduction in GME funding for FY 2013 has a 10% cut to IME ($9.7 billion over 10 years), as well as $177 million dollar cut to Children’s Hospital GME funds.
Sources:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1495035/
http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=73
https://www.aamc.org/newsroom/reporter/march2012/276736/budget.html
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
Alexandra Printz – National Delegate
----------------------------------------------------------------------------
To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html