Presentation given by Steve Dickson during MHA's "Preparing for Healthcare Reform" symposium on Sept. 30

1. Three Big Questions About Health Reform -> Why was health reform needed? -> What’s included in health reform? -> Will it be implemented or will it be repealed?

2. Why Was Health Reform Needed?

3. Why Health Reform? -> Today, there are 51 million uninsured individuals. That number grows daily. -> Over the last 10 years, insurance premiums have risen 131%. -> An average family of four pays more than $13,000 annually in premiums.

4. What’s Included in Health Reform?

5. Health Reform: Key Elements -> Expanding coverage -> Reforming the delivery system -> Financing reform -> Protecting Medicare & Medicaid payments -> Building the workforce -> Wellness and prevention -> Quality and safety -> Regulatory oversight & program integrity

6. 158 million 50 million 25 million 23 million 26 million Source: Congressional Budget Office Expanding Coverage to 32 Million

7. Coverage: Individual Mandate -> In 2014, all individuals will be required to obtain coverage or face a penalty. -> Individuals can purchase coverage from newly created “insurance exchanges.” -> Federal help for some individuals to pay for insurance.

8. “ Small companies and individuals who don’t have insurance through work will be able to purchase insurance through newly created marketplaces, known as insurance exchanges, created and regulated by states. … Think of it as an Orbitz or Travelocity for health care plans.” - USA Today Coverage: Insurance Exchanges

9. Coverage: Large Employers Large employers (businesses with 50 or more employees) will be fined if their employees purchase health care coverage through new insurance exchanges and receive federal help to pay their premiums.

10. Coverage: Small Employers -> Employers with 10 or fewer employees who earn, on average, less than $25,000 a year can get a 50% tax credit for providing health insurance. -> Employers with 25 or fewer employees who earn, on average, less than $50,000 can receive a partial tax credit. Small businesses are eligible for subsidies to offer insurance and will have access to the exchange

11. Immediate Insurance Reforms Effective September 23, 2010 -> No cancellation of coverage when someone becomes sick. -> No lifetime benefit limits or unreasonable annual limits. -> No pre-existing condition exclusions for children (under 19). -> Free preventive care (including immunizations for children). -> Adult children up to age 26 can stay on their parents’ plan.

12. Additional Insurance Reforms Effective September 23, 2010 -> Limits insurers’ ability to set premiums based on health status. -> Provides important administrative simplification. Effective 2014 -> Coverage can’t be denied based on pre-existing conditions.

13. Reforming the Delivery System Creates new ways to tie payments to quality improvement. -> Accountable Care Organizations -> Bundling Pilots -> CMS Center for Innovation -> Value-Based Purchasing -> Geographic Variation -> Medical Homes -> Gainsharing -> Medical Liability Demonstrations Prohibits physician self-referral to hospitals in which physicians have an ownership interest.

14. Source: Congressional Budget Office Financing Reform

15. Hospitals’ “Shared Responsibility” $155 billion over 10 years is mainly achieved through: -> Reduced hospital updates -> Medicare/Medicaid DSH payment reductions -> Hospital readmissions policy -> Hospital-acquired conditions But hospitals will experience reduced uncompensated care and additional revenue/payment for the newly insured.

16. Enhancing Medicare & Medicaid Payment The law enhances payments by: -> Expanding the 340B discount drug program. -> Increasing Medicaid physician payment. -> Improving rural payment. -> Extending important Medicare provisions that would otherwise expire. -> Increasing resources for comparative effectiveness. -> Protecting long-term care hospitals.

17. Encouraging Quality and Safety The law encourages quality and safety by: -> Establishing a national quality improvement strategy. -> Creating a public-private institute to analyze the comparative effectiveness of treatments. -> Creating a patient safety research center to promote best practices. -> Taking steps to pay for QUALITY rather than VOLUME . “ Pay for Reporting” systems for all providers. Value-Based Purchasing pilot systems for many providers.

18. Addressing Disparities The law addresses disparities in care by: -> Allowing health plans within exchanges to reward providers that address disparities as part of quality activities. -> Elevating the focus of eliminating disparities in the Department of Health and Human Services -> Requiring all federally funded data collection efforts on health care to include collection of data on race, ethnicity, primary language, etc. -> Providing grants to state & local governments and community organizations for evidence-based community preventive health activities aimed at reducing racial and ethnic disparities.

19. Increasing Regulatory Oversight The law increases regulatory oversight by: -> Establishing a significant number of provisions to reduce waste, fraud and abuse. -> Adding new reporting requirements on tax-exempt hospitals. -> Extending the Recovery Audit Contractor program to Medicaid, as well as Medicare Parts C and D. -> Enhancing Medicaid program integrity.

20. What the Law Does NOT Do The law does not: -> Create a new public program. -> Require private insurance plans that are part of the state insurance exchanges to set rates at Medicaid or Medicare levels. -> Cut the indirect medical education adjustment.

21. What the Law Does The law: -> Significantly lowers Medicare/Medicaid DSH cuts from the President’s original proposal of $106 billion to $36 billion. -> Reduces overall hospital cuts from the President’s original proposal of $228 billion to $155 billion. -> Prevents PPS hospitals from falling under the jurisdiction of an Independent Payment Advisory Board. -> Prevents enactment of a percentage charity care requirement for tax-exempt status.

22. Health Reform: Key Dates -> Physician self referral ban (December 31) -> Hospital payment update: market-basket minus 0.25 percentage point -> Institute of Medicine (IOM) studies begin -> 340B expansion -> Medicare extenders

23. Medicare Extenders Extenders include: -> Section 508 -> Outpatient hold harmless -> Outpatient therapy caps moratorium -> Cost-based reimbursement for laboratory services

24. Medicare Extenders Extenders include: -> Medicare dependent hospital program -> Rural community hospital demonstration program -> Add-on for ground ambulance payments -> Direct billing for pathology services

25. Health Reform: Key Dates -> Center for Medicare and Medicaid Innovation -> Hospital payment update: market-basket minus 0.25 percentage point -> $200 million to reward hospitals in low spending counties -> Redistribution of GME slots -> Rural low-volume adjustment improvements

26. Health Reform: Key Dates -> Accountable Care Organization program -> Readmission data verification -> Hospital payment update: market basket minus 0.1 percentage point and minus productivity -> $200 million to reward hospitals in low spending counties

27. Health Reform: Key Dates -> Bundling pilots -> Readmission penalties -> Value-based purchasing program -> Hospital payment update: market basket minus 0.1 percentage point and minus productivity

28. Health Reform: Key Dates -> Begins reductions in Medicaid & Medicare DSH -> Provides 100% federal budget for cost of coverage for those who are “newly eligible” for Medicaid through 2016. -> Federal funding declines to 95% of coverage cost in 2017, 94% in 2018 and 90% in 2019 -> Begins state-based health benefits exchanges, through which individuals and small businesses with up to 100 employees can purchase coverage

29. Health Reform: Key Dates -> Begins individual mandate for health insurance -> Sets up an independent payment advisory board to recommend to Congress ways of reducing Medicaid spending − PPS hospitals are exempt.

30. Benefits of Reform The law: -> Expands coverage to 32 million people. -> Builds on employer-based insurance system. -> Initiates major insurance reforms. -> Sets in motion future payment and delivery system reforms. -> Increases the focus on wellness and prevention.

31. Most Efficient, Affordable Care -> Pilot programs on payment bundling -> Accountable Care Organizations -> Center for Medicare and Medicaid Innovation -> Administrative simplification

32. Most Efficient, Affordable Care -> Public/Private comparative effectiveness institute with steady funding. -> Hospital Value-Based Purchasing -> Enhanced public reporting -> Numerous provisions to reduce health disparities. -> National quality center

33. Best Information IT will be key to supporting reform Important foundation was laid in the economic stimulus bill (ARRA) including: -> HIT Medicare/Medicaid Incentive programs from the stimulus bill. -> Expansion of broadband technology. -> Funding for HIT infrastructure.

34. Implementing Reform What will be expected of health care organizations? -> More integrated care -> More at-risk payments -> More accountability

35. Will Health Reform Be Implemented or Repealed?

36. House of Representatives Total Members: 435 (with 2 vacancies) Needed for Majority: 218 Total Number of Democrats: 255 Incumbent Democrat Senators Considered “Safe”: 148 Total Number of Republicans: 178 Incumbent Republican Senators Considered “Safe”: 164 For the Republicans to regain control of the House of Representatives, they would need to pick up 39 seats. Sabato has them “favored” to win 32; Cook has the GOP “favored” to win 35-45 seats.

37. Senate Total Members: 100 Needed for Majority: 51 Total Number of Democrats: 57 (Plus 2 Independents who caucus with them). Democrat Incumbents “Safe” or Not Up for Reelection: 44 Total Number of Republicans: 41 Republican Incumbents “Safe” or Not Up for Reelection: 34 Sabato and Cook project a net gain in the Senate for the Republicans of 6-7 seats, which would still have them in the minority.

38. Sam W. Cameron President/CEO Mississippi Hospital Association www.mhanet.org [email_address] (800) 289-8884