Statement of Delaware Valley Healthcare Council of HAP
Before the Pennsylvania
Department of Public Welfare
Delaware Valley Healthcare
Council of HAP
January 3, 2014
Mackereth, I am Curt Schroder, Regional Executive for the Delaware Valley
Healthcare Council of HAP (DVHC), which represents approximately 60 acute and
specialty care hospitals and health systems in southeastern Pennsylvania and
the patients they serve.
appreciate the opportunity to present the views of hospitals and health systems
in southeastern Pennsylvania on the proposed Healthy PA plan and the
We strongly believe that expanding Medicaid eligibility
for uninsured individuals is important to improving the health status of
Pennsylvanians and is in the best economic interest of the commonwealth. We
urge the Pennsylvania Department of Public Welfare (DPW) to submit a waiver
that would allow such expansion to occur no later than July 1, 2014.
DVHC Supports Expanded Medicaid Coverage for Pennsylvanians
DVHC and its member hospitals and health systems
have long advocated for the opportunity to expand health insurance coverage for
individuals and their families. Having health insurance coverage is an
important step to better health. Insured individuals are more likely to receive
needed health care at the right time and in the right setting. Insured
individuals with complex or chronic conditions are more likely to manage their
care, avoiding an escalation of health problems.
Healthy people are employable,
show up to work, and have higher productivity. Healthy children have better
success in school. Pennsylvania has approximately 500,000 individuals
with incomes at or below 138 percent of the federal poverty level who are
In southeastern Pennsylvania there are 162,327 uninsured adults that
could benefit from the coverage expansion provided through Healthy PA. The
hospital community recognizes that if approved, the waiver would provide increased
health care coverage for these consumers through the use of premium assistance
to purchase private coverage plans offered in the federally-facilitated
marketplace (FFM), the commercial market, or through employer-sponsored
It is important to
note that Pennsylvania’s uninsured are primarily working adults with 75 percent
living in a household with one working adult. Expanding eligibility for
Medicaid would provide them with health coverage, regular access to routine and
preventive care, and ultimately, better health.
Why Strengthening Medicaid Is Important to the State’s Economy
Not only will expanding Medicaid eligibility be
important to improving the health of low-income working adults and their
productivity, it will also benefit the state’s economy. For this reason DVHC
urges DPW to submit a proposal that has the likelihood of being approved by the
Centers for Medicare & Medicaid Services (CMS) and can be implemented by
July 1, 2014.
Hospitals depend upon government funding
like Medicaid as a critical source of revenue. DVHC understands that DPW is
willing for the Healthy PA proposal to be designed to assure that Healthy PA Private
Coverage Option participants will be counted toward Medicaid provider
eligibility requirements for disproportionate share, the 340B prescription drug
program, and critical access hospital payment policies.
These funding streams
are essential for the continued viability of the region’s hospitals. DVHC
appreciates the commonwealth’s intent to secure this payment stream for
hospitals through the Healthy PA proposal. This will help hospitals continue to
provide essential health care services for their communities and will maintain
In addition, three studies conducted in spring 2013
by RAND Health, the Pennsylvania Economy League, and the state’s Independent
Fiscal Office demonstrated the positive economic impact of expanding Medicaid
coverage with an estimated $1.7 billion in additional tax revenues.
Increasing the number of Medicaid eligibles
could result in more than $3 billion annually in positive economic activity,
producing a seven-year change in state gross domestic product of nearly $24
billion. Plus, this expanded economic activity will support 35,000–39,000 jobs.
Therefore, delaying expanded Medicaid coverage until January 2015 would prevent
Pennsylvania from taking advantage of federal funding that would boost the
Hospital Concerns about the Healthy PA Proposal
DVHC fully supports expanding health insurance coverage and decreasing the
number of uninsured, we have concerns about certain aspects of the Healthy PA
proposal and urge revisions to the waiver before submitting it to CMS. First of
all, hospitals provide care to all who
need it, regardless of financial or insurance status. Twenty-four hours a day,
seven days a week, individuals can go to a hospital and receive care.
hospitals are in a unique position to assist uninsured consumers with insurance
enrollment when they present for emergency services. Unfortunately, according
to the Healthy PA waiver proposal, there is no retroactive coverage for
the expansion population because coverage begins the first month after
enrollment, not at the beginning of a hospital stay as is the case under the
current Medicaid program.
This is a problem for hospitals because it means
increased uncompensated care. Since the onset of the recession in 2007, in
southeastern Pennsylvania uncompensated care has risen by 40 percent over five
years totaling $363 million in fiscal year 2012. We cannot afford for this to continue.
One way to resolve this issue would be to allow new
eligibles to be covered in the state Medicaid program until they are enrolled
in a Qualified Health Plan (QHP) of the FFM. New Medicaid eligibles should not
be subject to a delay in health coverage.
addition, Pennsylvania hospitals do not support placing arbitrary limits on
inpatient hospitalization for non-emergencies and rehabilitation services. We
have concerns that the Healthy PA proposal calls for a limited number of days
for inpatient psychiatric and drug and alcohol treatment. Given the fact that there
would be emergency admissions covered for medical conditions, it is important
to clarify how any limit to behavioral health services may affect achieving
federal parity requirements under the Affordable Care Act. Ultimately, the
proposed benefit limit could exacerbate the uncompensated care provided by
hospitals and result in less than optimal coverage for consumers.
hospital community appreciates that the Healthy PA waiver would allow hospitals
and providers to negotiate rates with the QHPs according to the Healthy PA Private
Coverage Option. It is critical that the DPW refrain from becoming involved in
the free market exchange between providers and insurers.
However, DVHC opposes
DPW’s plan to offer Medicaid eligibles coverage through a private option that
would mean patient financial liabilities from services rendered by
out-of-network providers. Failure of the Healthy PA Private Coverage Option to
cover out-of-network deductibles, co-payments, and/or coinsurance will result
in bad debt for providers and will undoubtedly cause confusion for consumers
who would otherwise have no deductibles and minimal co-payments. This places
hospitals in an untenable position of being a debt collector and facing media
backlash when collecting what is owed.
The Healthy PA Proposal Limits Health Care Access
for Medicaid Eligibles
DVHC does not believe we can stress enough
how important it is for Pennsylvania to expand Medicaid coverage before January
2015. Our most vulnerable citizens ought to have insurance available to them
and access to health care as soon as possible.
The waiver requests that
there be an allowance for the commonwealth not to cover Federally Qualified
Health Centers (FQHCs) in the Healthy PA Private Coverage Option as required by
federal law. These providers are important in southeastern Pennsylvania’s
safety net and a failure to include FQHCs in the Medicaid provider networks
could result in access to care problems for consumers.
DVHC suggests that the
commonwealth provide the new Medicaid eligibles with a choice of at least two QHPs with silver plans on the marketplace and at least one
plan option that has a FQHC.
DVHC understands the commonwealth’s intent to implement a program that instills
personal responsibility for Medicaid recipients, we are concerned with how the
premium sharing component of Healthy PA is designed.
It seems both unreasonable
and unnecessary to expect individuals earning as little as $5,745 per year to
comply with premium cost-sharing. This will create a barrier to health
insurance coverage for low income consumers that coverage expansion is
otherwise designed to help.
Furthermore, the waiver denotes that “if the
eligible adult or household fails to pay their premium for the three subsequent
months, the adult’s or household’s eligibility will be terminated,” which
contradicts the goal of increased coverage for uninsured Pennsylvanians.
In addition, the Healthy PA waiver would
require newly eligible adults 21 years of age or older who are working
less than 20 hours per week to register with JobGateway, the online system
currently utilized for Pennsylvania’s Unemployment Compensation Program.
condition of initial and continuing eligibility, Medicaid participants would
have to engage in specified work search-related activities. The waiver denotes
that “non-exempt individuals who successfully complete 12 approved work search
activities per month during their first six months will continue to be eligible
for health care coverage.”
DVHC believes this is an unrealistic requirement and
would cause compliance difficulties for Medicaid consumers. The fact that the
waiver stipulates that “failure to comply with the work search activities will
result in a three-month period of ineligibility for Medicaid and Healthy PA
Private Coverage Option” contradicts the goal of increased coverage and access
to health care for uninsured Pennsylvanians.
The bottom line is that Healthy
PA’s proposed new requirements for program participation that could result in
coverage suspensions or terminations for the newly eligible and existing
Medicaid beneficiaries could pose barriers to access to needed health care for
As such, it would not provide adequate protection and coverage for a
very vulnerable population. Also, coverage suspensions or terminations are
potential barriers to payment that will force providers to bear the risk for
individual non-compliance with premium payment and job search requirements even
when services are still required.
PA Proposal is too Complex
Finally, as drafted, The Healthy PA
proposal is extremely complex. The proposal requires 23 waivers which is more
than has been granted to any other state for Medicaid expansion. Healthy PA
includes considerable involvement, oversight, and requirements for the state
because of the complexity of conditions and processes included. DVHC has
concerns about the costs to establish the systems needed to implement and
monitor the program and DPW’s ability to create the necessary infrastructure
based on the proposed design.
For example the waiver would require the
commonwealth to create a new state bureaucracy to enable the DPW (not the
federally facilitated marketplace) to make payments to insurers for premium and
cost sharing for Private Option recipients. This high level of complexity could
prevent CMS from approving The Healthy PA proposal.
For appropriate health care for low-income
working adults and for the state’s economy, we believe expanding Medicaid
eligibility and covering more Pennsylvanians makes sense as soon as possible.
Pennsylvania hospitals and health systems
look forward to working with the DPW and the commonwealth to resolve the key
concerns related to the proposed benefit packages for low-income
Pennsylvanians, including the work search requirement and personal
responsibility/cost-sharing. Further, DVHC will assist in any way we can to
ensure a start date of July 1, 2014, to assure increased access to care for our
state’s most vulnerable patients.
Thank you for the opportunity to present
the council’s, and the hospital community’s, views on Healthy PA. I am happy to
answer any of your questions.