Proposed DSH Cuts Pose Threat to Indiana's Safety Net Hospitals
Indiana hospitals are scheduled to lose a projected $84 million in state fiscal year 2020 and another $168 million by state fiscal year 2021 if Congress fails to delay the proposed disproportionate share hospital (DSH) cuts. The DSH program helps hospitals that serve a large population of uninsured patients to address uncompensated care. The proposed cuts were included in the Affordable Care Act (ACA), which assumed increased health insurance coverage would reduce hospitals’ need for DSH funding. Unfortunately, the uninsured rate in Indiana has increased in recent years, rising to more than 10 percent in 2017 according to Gallup. These cuts will largely impact rural and urban hospitals across Indiana that serve a high percentage of uninsured and low-income patients.
The American Hospital Association (AHA) and other national organizations are asking Congress to delay the start of DSH cuts, a position fully supported by the Indiana Hospital Association. In a statement, the coalition points out that over the past six years, Congress has recognized the importance of fully funding DSH hospitals by delaying the start date. The group is asking Congress to push back the start once more to preserve the vitality of DSH hospitals nationwide.
Medicare for All Bill Introduced
In February, the Medicare for All bill was introduced in the House by Rep. Pramila Jayapal, D-Wash., which would replace almost all private health insurance and place all Americans into the Medicare program in a two-year timeframe. The program would cover all comprehensive health care services and eliminate deductibles and co-pays. Private insurance would be limited to benefits not provided by the government-run program. No cost estimate or funding plan was provided in its introduction, but conversation focused on taxing higher incomes as well as requiring employers to pay into the system.
The American Hospital Association (AHA) cited concerns that the proposal would disrupt coverage for the more than 180 million Americans with employer-sponsored health plans, hinder delivery system reforms, and threaten access to care. AHA Executive Vice President Tom Nickels said, “The AHA believes there is a better alternative to help all Americans access health coverage – one built on fixing our existing system rather than ripping it apart and starting from scratch."
Bipartisan Push to Tackle Surprise Billing Expected at the Federal Level
Unexpected medical bills, or “surprise” medical bills cause strain and worry, especially when a consumer believes a service is “in-network” and covered by insurance. This is a complex issue that goes beyond hospitals—the interactions between insurance companies and independent physician contractors in the emergency room are often where the system breaks down leaving patients at risk for high bills.
In Indiana, the IHA supported a 2018 law that requires hospitals and other health care providers who make certain patient referrals to provide written notice that the provider may not be in the patient’s health plan—or is “out-of-network”—which could result in the patient being financially responsible for the services.
This was a step forward, but a comprehensive approach at the federal level is needed. Any solution should also prevent scenarios in which patients seek care in the emergency room of a hospital covered by their insurance but receive a surprise bill because the insurer deems the reason for visiting the ER as “non-emergent”.
In late February, the AHA released a set of principles regarding surprise billing that it hopes to see become part of legislative language at the federal level. The first principle is the most important: Protect the patient. Any public policy solution should protect patients and remove them from payment negotiations between insurers and providers. Patients need certainty regarding how much they owe and that they cannot be “balanced billed.” In other words, they should not receive a bill from the provider beyond their negotiated insurance rate.
Other principles include ensuring patients have access to emergency care, proposing a “prudent layperson standard”, meaning a claim should be paid if a person made a reasonable decision to seek care in the emergency room. Other principles include that all stakeholders – health plans, employers, providers and others – help patients understand what’s covered and what’s not. Health plans also need to make sure that their networks include adequate in-network providers, including hospital-based specialists at in-network facilities. Health plans also must make sure that they keep information about provider networks current and that it is easy for enrollees to find and understand.
There is bipartisan interest in Congress about the need to address surprise billing. Indiana’s hospitals stand ready to participate in identifying solutions that put patients first.