The following is the status of important issues and bills of interest for Pennsylvania hospitals.

Price Transparency

As the House and Senate begin conference work on the health information technology bill, we need to make sure they don’t insert in a provision requiring hospital public disclosure of privately negotiated rates that was shelved in the House in July.

Status: HAP is committed to providing meaningful pricing information to consumers, but this provision is anti-competitive and counter-productive.

On September 12, Representative Michael Burgess (R-TX), a physician, introduced transparency legislation H.R. 6053 to require states to publicly report hospital charges for certain inpatient and outpatient services, and insurers to give patients an estimate of their expected out-of-pocket expenses upon request. The legislation says that states with a law enacted on or before the date of the amendment don't have to modify their law if it meets some but not all requirements, except to the extent necessary to address the unmet requirements. In addition, the bill would require the Agency for Healthcare Research and Quality (AHRQ) to study what type of health care price information consumers would find useful and how it could be made available in a timely and understandable form.

Status: American Hospital Association (AHA) supports the legislation. HAP is currently reviewing the legislation to determine how the reporting to Pennsylvania Health Care Cost Containment Council (PHC4) reporting requirements would be affected.

On August 22, President Bush signed an executive order requiring four federal agencies to compile and share quality and cost information on the health care services they pay for and to make that information public. The order applies to the Department of Health and Human Services, Defense Department, Veterans Affairs Department, and Federal Employees Health Benefit Program. It directs the agencies to use, when possible, interoperable computer systems to share patient medical information; to develop with the private sector and other government agencies measures to gauge the quality of care and to enact them; to make available to beneficiaries the amount the agencies spend on common procedures; and to identify practices that promote high-quality health care.

Status: The agencies must comply by January 1, 2007.

Tax-Exempt Status

Congress continues to examine the legitimacy of hospitals’ not-for-profit status, including the standard for community benefit.

Status: HAP supports the current standard, established in Pennsylvania under Act 55 of 1997, which supports a hospital’s efforts to provide many health care services outside its four walls and improve the overall health of the community. The public should know the community benefit being provided by their local institutions.

Physician Payments

Unless Congress acts, Medicare payments to physicians will be cut about 5.1 percent beginning January 1, 2007.

Status: While HAP agrees that Congress needs to act to avert cuts in physician Medicare payments, lawmakers should not secure funding by reducing hospital payments.

Medicaid

The Administration’s FY 2007 budget proposes administrative changes that would reduce Medicaid expenditures by $12.2 billion over five years. While in previous years, the President has called for legislation to alter Medicaid policies and spending, this year’s budget would seek to enact these proposals without congressional review or consideration. Of greatest concern are the administrative proposals to:

1. Decrease the allowable provider tax rate from 6 to 3 percent. This provision would cut Medicaid by $2.1 billion over five years.
2. Limit Medicaid payments to government providers to cost and curb financing practices (i.e., intergovernmental transfers). This provision would cut Medicaid expenditures by $3.8 billion over five years.

HAP has worked with the Pennsylvania Governor’s office, Senators Specter and Santorum, and Pennsylvania House members to ensure the impact of the proposals on Pennsylvania’s Medicaid program and the hospital community is properly understood.

Status: HAP opposes reducing funding for Medicaid, which provides care to the most vulnerable—the poor, elderly, and disabled.