The Hospital & Healthsystem Association of Pennsylvania

Comments
to
The United States Senate Finance Committee
on

Expanding Health Care Coverage:
Proposals to Provide Affordable Coverage
to all Americans

May 22, 2009

The Hospital & Healthsystem Association of Pennsylvania (HAP) represents and advocates for more than 250 acute and specialty care hospitals and health systems across Pennsylvania, and most importantly, the communities and the patients these hospitals and health systems serve. HAP appreciates the opportunity to comment on the Senate Finance Committee’s April 29 policy options paper on health care coverage.

Pennsylvania hospitals and health systems support comprehensive, meaningful health care reform. Over the past several years, HAP worked to develop a framework for health reform that includes the following tenets:

• The good health of all Pennsylvanians must be a priority. Health care reform must allow our health care delivery system to achieve its full potential to prevent disease, improve treatment, and sustain wellness. Reform also must improve quality and care outcomes, while restraining the overall growth in the cost of health care and health insurance.
• Individual patients must be the core focus of the health care system. The relationship between a patient and his or her health care professional is fundamental to quality health care delivery. Patients have a right to expect quality care and useful information tailored to their needs in every health care encounter. Greater patient choice requires informed decision-making and access to helpful information.
• The health care system must work for all Pennsylvanians. All Pennsylvanians, regardless of health status, national origin, gender, race, age, or income, should have access to affordable health insurance and quality health care.
• The best elements of our health care system must be preserved and enhanced. Health care reform should correct the shortcomings of the current system without sacrificing the features that allow the delivery of the most advanced care in the world. Health care reform should focus on improving quality, coordination, and efficiency of care. Reform also should encourage innovation in all areas of health care, including prevention, screening, diagnosis and medical treatment, and communication between patients and providers.

HAP’s framework for health care reform is consistent with the elements of reform in the American Hospital Association’s (AHA) Health for Life: Better Health. Better Health Care, which focuses on:

1. Health coverage for all, paid for by all.
2. A focus on wellness.
3. The most efficient, affordable care.
4. The highest quality care.
5. The best information.

HAP believes that everyone deserves health care coverage that provides the right care, at the right time, in the right place. Health coverage for all, paid for by all, is an essential element of health reform supported by HAP. The nation’s economic recession has heightened the need for health care reform as many Pennsylvanians lose their health insurance, jeopardizing their access to health services.

Health care costs are often higher when patients do not receive care at the right time or in the right setting. Many uninsured people delay needed care until it is an emergency. The costs of the uninsured are reflected in higher health insurance premiums for those purchasing insurance. Providing coverage to all will help reduce the “cost shift” that moves the financial burden of non-coverage from public to private payers.

The Senate Finance Committee’s options paper presents an array of approaches to expanding affordable health care coverage—enacting health insurance reform, creating a national insurance exchange, establishing a new public plan, providing subsidies for low-income individuals and families, and modifying the Medicaid program. This array of options also presents challenges because many of the options are interconnected and, depending on which variation of the options is chosen, the final approach to coverage could be very different. Therefore, the public’s input on these issues is important. HAP appreciates the opportunity to provide comments and looks forward to working with the AHA and public policymakers to achieve better health and health care in America.

Following are HAP’s detailed comments on the key provisions affecting Pennsylvania hospitals and health systems:

Insurance Reform: HAP supports improved access to affordable private health insurance and believes that the insurance market reforms included in the options papers would be critical first steps toward expanding access to private insurance. HAP supports the recommendations on guarantee issue and renewability, as well as the elimination of pre-existing condition exclusions. HAP also supports the federal rating band reforms. However, we have concerns that the rating reforms would not apply immediately to the small group market and could take up to ten years to apply to this sector of the market depending on when a respective state adopts the federal rating band reforms. This is of concern as in Pennsylvania, like many other states, smaller businesses are either struggling to offer health insurance or are choosing not to offer health coverage.

HAP agrees with the AHA that the establishment of a national health insurance exchange offers an opportunity to organize the insurance market to facilitate the purchase of coverage. It also can serve as the conduit for government subsidies that support the purchase of health care coverage for low-income individuals. However, we are concerned that the exchange as described in the options paper might be too limited in scope, particularly in its authority to oversee health plans, risk adjustment and rating areas to ensure affordable private insurance. We also would strongly recommend that the committee consider including provider-based health plans in the health insurance exchange.

Affordability: HAP strongly supports subsidies for low-income individuals and families to purchase affordable private health coverage. We support the option to make the premium subsidy/tax credit refundable and advanceable. However, we are concerned that the tax credit might not be sufficient to purchase meaningful coverage and look forward to further work by the committee on this area. We also support tax credits for small businesses and tying the credit to the size of the firm with respect to employees and average wages.

Public Plan Option: Pennsylvania hospitals and health systems have expressed serious concerns regarding the creation of another public program that could exacerbate the underpayment of providers by paying rates at Medicare or Medicaid levels. In Pennsylvania, both the Medicare and Medicaid programs already pay providers less than the cost of furnishing services to the programs’ beneficiaries. In Pennsylvania, on average, the Medicare program pays only 94 cents for each dollar of cost of patient care, and the state’s Medicaid program pays only 82 cents toward the cost of patient care. The perpetuation of underpayment for hospital services in a health care reform environment would likely lead to a reduction in access to needed services for communities, as hospitals will be forced to reduce services. HAP agrees with the AHA’s recommendation that the committee carefully consider the impact of reforms that could unintentionally result in reducing access to care.

Shared Responsibility: One of the key elements for health care reform that is supported by hospitals as reflected in the AHA’s multi-year Health for Life effort is health coverage for all, paid for by all. To ensure that an individual coverage mandate would be meaningful, it will be important that insurance market reforms are thorough and are implemented rapidly. Such a mandate would be greatly enhanced by a robust national health insurance exchange that has a broad scope of authority that includes regulating health plans. Subsidies for low-income individuals, as well as expansions in Medicaid eligibility, are critical to ensure those low-income populations, long ill-served by the current insurance market, will have access to affordable coverage.

Employers have served as the backbone of our health care insurance system—voluntarily providing health insurance to U.S. workers and their families for more than half a century. HAP strongly believes that employer-based coverage is an important part of health care financing and needs to be part of health care coverage reform. One of the overall goals in moving toward universal coverage should be to support some aspect of the voluntary role that employers have long played. However, employers who do not participate in providing coverage directly need to help support the programs through which their employees obtain health care coverage.

Therefore, HAP agrees with the AHA’s recommendation that the committee make certain there are balances between requirements on individuals and requirements on employers as we seek to expand access to health care coverage.

Role of Public Programs: In Pennsylvania, as is the case in many states, Medicare, Medicaid, the Children’s Health Insurance Program, and our state’s adultBasic program (for low-income working adults) provide health care coverage to many citizens. HAP believes that health care reform efforts must build on the success of these public programs as we forge public-private approaches to addressing health care coverage.

Medicaid: The options paper on health care coverage proposes significant changes to the Medicaid program ranging from eligibility expansions to federalizing the Medicaid disproportionate share hospital program. The Medicaid program has long served as the nation’s health care safety net, providing access to health services for millions who cannot afford private insurance. In Pennsylvania, because of the economic recession, increasing numbers of Pennsylvanians are relying on this program to provide health care coverage. At the same time, the Medicaid program in Pennsylvania significantly underfunds health care, creating a financial strain on hospitals and health systems. Changing the overall financing structure of the program and the way it supports providers serving vulnerable populations needs to be thoughtfully and carefully deliberated so as not to further destabilize the financial health of the very providers on which our nation’s most vulnerable citizens depend.

Medicaid Expansion and Program Payments - HAP supports expanding Medicaid eligibility with federal financing for the new populations covered through expanded eligibility for children, parents, and pregnant women up to 150 percent of the federal poverty level. The options paper proposes phasing down the additional federal financial support to the states over a five-year period of time. Given the current economic climate in Pennsylvania and many other states, federal support for this period of time may not be sufficient. Additionally, HAP supports the committee’s inclusion of the concept of provider payment protections. HAP supported Medicaid provider payment protections being included during the recent debate on the economic stimulus legislation, as it would have assured that federal funding for Medicaid would be used for health care services as intended. HAP agrees with the AHA that tying Medicaid payment protections to the Medicare program needs to be further explored since the programs serve very different populations and are structured differently. That said, however, HAP strongly believes that there needs to be clear Medicaid payment protection to ensure more adequate provider payments by this critically important public program.

Medicaid Disproportionate Share - HAP has significant concerns regarding the proposal to federalize the operation of the Medicaid disproportionate share program. In Pennsylvania, disproportionate share is a critical support for the many safety net hospitals in our urban and rural communities that serve Medicaid, uninsured, and underinsured patients. Disproportionate share helps these hospitals as the Medicaid payment rates in Pennsylvania are significantly below what it costs to take care of Medicaid patients. Even with the disproportionate share payments, Pennsylvania hospitals and health systems on average only receive funds to cover 82 percent of the cost of caring for Medicaid patients. In Pennsylvania, disproportionate share also helps support care for the chronically ill and disabled, pregnant women, neonates, burn patients, trauma patients, and behavioral health care. HAP is concerned that the proposal in the options paper would result in significant redistribution of funding, which is already woefully inadequate. Therefore, HAP agrees with the AHA’s recommendation that the committee reject reductions in federal support for disproportionate share programs until such time as coverage expansions are universal and fully implemented and Medicare and Medicaid payment shortfalls are fully addressed. These views were shared with Congress in an April 27 coalition letter signed by the AHA, Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, National Association of Children’s Hospitals, and National Association of Public Hospitals and Health Systems.

Transparency in Medicaid and CHIP Waivers and State Plan Amendments - HAP supports the proposal to impose new statutory requirements on states to increase transparency when developing and implementing Medicaid and Children’s Health Insurance Program (CHIP) 1115 waivers. In addition, this proposal would mandate transparency-related requirements for states when proposing limiting benefits with regard to their Medicaid State Plan Amendments. HAP believes such transparency measures are important steps in guaranteeing the public a say in how policies affecting coverage are determined at the state level. HAP also recommends that these transparency-related requirements be extended to setting provider payment rates as well.

Quality of Care in Medicaid and CHIP - HAP strongly supports the development of nationally standardized quality measures that are applicable to pediatric populations and other individuals who are covered under the Medicaid program. In the Senate Finance Committee’s options paper on delivery system reform, the committee thoughtfully included language directing the Secretary of the Department of Health and Human Services (HHS) to work with two different multi-stakeholder groups to both develop national health care quality measurement priorities and goals, and select applicable quality measures for public reporting that align with those priorities and goals. We suggest that the committee add similar language to the Medicaid quality measures proposal.

The Children’s Health Insurance Program Reauthorization Act of 2009 directs the implementation of the pediatric quality measures on a state-by-state basis. HAP agrees with the AHA’s recommendation that the committee make some modifications to this process by expanding the measures to the broader Medicaid pediatric population. In the current reporting environment, hospitals are required to report on quality data to many different entities at the federal and state level, as well as to private insurers, accrediting organizations, and others. The multiplicity of reporting requirements leads to duplication of efforts and an increased burden when various entities ask hospitals to report on different measures through different measurement systems that use different formats. It also leads to confusion because the different reporting systems often produce discordant results. A hospital can appear to be an excellent performer in one database and a lesser performer in another on exactly the same aspect of care. These conflicting results dilute hospitals’ ability to identify and focus attention on those aspects of care that need substantial improvement. HAP believes that a more unified approach is needed, such as through the work of the Hospital Quality Alliance (HQA) resulting in the Hospital Compare website. Hospital Compare could serve as the common data platform for quality reporting through all federal health care programs, including Medicaid. In Pennsylvania, there is public reporting, and Pennsylvania hospitals and health systems have long supported public accountability. However, the development of various national reporting systems, when overlaid with state-by-state reporting systems and private reporting systems creates confusion for consumers who are seeking quality information that can help in their decision-making and creates additional costs for providers in compliance. It is imperative that quality reporting systems be developed with meaningful input from stakeholders, including hospitals, payers, clinicians, and consumers, and that reporting systems be appropriately funded to ensure their functionality.

Prevention and Wellness: HAP appreciates that the options paper places a strong emphasis on wellness, disease prevention, and chronic care management in both the Medicaid and Medicare programs. A focus on wellness is critical to improving the health of Americans, and to mitigating the rise in health care spending. Early investment in wellness will yield significant returns in terms of improved health outcomes, productivity, and quality of life. We strongly recommend that the committee encourage the Congressional Budget Office as well as the administration’s economic analysts to be flexible in scoring health care legislation—especially provisions related to wellness—as these upfront investments in prevention will yield long-term savings to our health care system.

Hospitals believe in fostering evidence-based medicine and, thus, support the work and findings of the United States Preventive Services Task Force (USPSTF). HAP supports the proposal to encourage the utilization of effective preventive services, i.e., those rated an “A” or “B” by the USPSTF, by removing or limiting beneficiary cost-sharing. Studies have shown that cost is often a barrier to receipt of certain medical services. Given that these services have been identified as clinically effective interventions to improve health and wellness, we encourage the committee to eliminate all cost-sharing for these services under Medicare. Also, given limited health care resources, we support the committee’s proposal for the Secretary not to cover services rated a “D” by the USPSTF. These services may not only be less effective but potentially harmful to certain patient populations.

HAP also agrees with the AHA’s recommendation that increasing federal Medicaid match funds be used to support state efforts to establish effective preventive services and immunizations (those rated “A” or “B” by the USPSTF or those recommended by the Advisory Committee on Immunization Practice). It is imperative that the committee carefully evaluate whether a 1 percent increase in the federal match rate is sufficient to support these state efforts.

HAP supports incentive-based programs to encourage individuals to lead healthier lifestyles. We support the proposal to provide grant funding to states. These grant programs include “RightChoices,” which provides annual funding to states to improve patient access to certain evidence-based primary preventive services such as health screenings and immunizations, and the competitive “Prevention and Wellness Innovation” grants to provide funding to improve care coordination, access to preventive services and treatments, and better integrate the delivery of health care services.

The options paper proposes to provide employers that provide “qualified wellness programs,” with an annual tax credit for a maximum of five years for 50 percent of the costs they pay for providing the programs to their employees. HAP supports this approach. Providing work-based incentives better targets such incentive funds and encourages employers to embrace initiatives that contribute to the health and wellness of their employees.

Health Disparities: HAP believes addressing health disparities is important in health care reform. The committee should consider the priorities developed by AHA’s Special Advisory Group on Improving Hospital Care for Minorities, which include:

• Supporting improvements in health care delivery that are designed to eliminate disparities in health care for minority populations, including systems of care that connect safety net and community-based providers, better collection and use of data, and the development and testing of appropriate performance measures.
• Developing and expanding the health care workforce to improve the availability of needed practitioners in underserved communities, including expanding the range of primary care professionals, increasing the diversity of the health care workforce, incorporating cultural competency within medical and health professional training, and improving the National Health Services Corps.
• Eliminating other access barriers, including affordability of coverage, cultural competency in the health care delivery system, and language services to address the needs of the rapidly growing number of patients who have limited English proficiency, are functionally illiterate, or are deaf or hard of hearing.

HAP supports addressing the language service needs of patients and, to that end, has been working with the HHS Office for Civil Rights (OCR) for several years on a range of efforts to improve language access in hospitals. We also support the expansion of the 75 percent federal match under Medicaid for language services provided to all Medicaid enrollees. However, we have several issues with this proposed option. First, the proposal should be expanded to cover language services for Medicare beneficiaries as well. With the rapidly growing limited English proficient patient population and the fact that the vast majority of health plans (public and private) do not provide any support for language services, hospitals and other health care providers are struggling to meet this need.

The proposal also incorrectly states that the HHS Office of Minority Health’s national standards for the delivery of “culturally and linguistically appropriate health care services” (known as the CLAS standards) is the regulatory standard for federally funded health care programs regarding language access. That is not the case. The regulatory standards are the guidelines issued by the OCR, and it is the enforcement agency. Furthermore, the CLAS standards were developed outside the Administrative Procedures Act regulatory process and other requirements for impact and regulatory flexibility analyses. They were issued prior to the issuance of government-wide guidelines on language access issued by the Department of Justice (DOJ) and then interpreted by HHS in its own guidelines on how its agencies and programs should apply the DOJ guidelines. The CLAS standards were never updated to comply with either the DOJ or HHS guidelines, while the OCR guidelines were updated. One of the critical aspects of the DOJ/HHS guidelines that the CLAS language standards do not comply with is the flexibility provisions to reflect the size and nature of a specific community’s population and recognition of available local resources. HAP agrees with the AHA’s recommendation that the proposal to extend the CLAS standards to all private health plans offered under the health insurance exchange be changed to requiring adherence to the OCR guidelines.

Conclusion: HAP will continue to work with the AHA as it works with the Senate Finance Committee to strengthen and build upon the ideas presented in the coverage options paper. Pennsylvania hospitals and health systems have a long-tradition of working with other stakeholders to expand health care coverage in Pennsylvania, and we are steadfast in our support of improving access to affordable health care coverage. We look forward to working with Congress as it moves forward with critical health reform legislation. If you have any questions regarding HAP’s comments, please contact Michael Strazzella, HAP’s vice president, federal legislation, at mstrazzella@haponline.org or at (202) 863-0287.