Jigsaw Puzzle of Health Reform

1
California State Rural Health Association Annual
Conference 2009 National Rural Health
Association Danny Fernandez Manager, Government
Affairs fernandez_at_NRHArural.org
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NRHA Federal Health Reform Update
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• CHANGE HAS COME TO WASHINGTON

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to the White House
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and to Congress.
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House of Representatives

• Democrats now have 258 (6 non-voting), Rs - 177
  Rs
• EC Waxman
• Ways and Means Rangel

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Senate

• Democrats gained 8 seats (59)
• Specter/party switch gives Democrats magical
  60th vote
• Republicans still have some power
• Filibuster
• Ability to place hold on bills

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The Moving Parts

• Senate HELP Committee workforce, insurance,
  non-entitlement health care.
• Senate Finance Committee - - Medicare, Medicaid,
  Graduate Medical Education
• House Ways and Means Medicare, Graduate Medical
  Education
• House Energy and Commerce Public Health
• House Education and Labor Educational
• loan programs

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Committee Philosophies

• HELP Kennedy long history of health care,
  committee members represent extremes of parties
  (Sanders, Brown, Coburn, Burr)
• Finance long history of bipartisanship, rural
  champs, moderate members - - cross-over votes
  (Baucus, Grassley, Snowe, Lincoln)
• Ways and Means Strong personalities (Rangle,
  Stark). Rs shut out of process.
• Energy and Commerce Struggle for control between
  Waxman and Dingell.

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Unifying Themes

• Decrease Number of Uninsured
• Mandate Coverage
• Employer Mandates
• Create Options/Exchange/Gateway - to allow choice
  
• Resolve SGR
• Improve Primary Care Shortages

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Road Blocks - Issues that Divide

• Public Plan
• Cost
• Pay-Fors
• Subsidies ( federal poverty level)
• Employer Mandates

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Other Issues

• Health Information Technology
• Meaningful Use guidelines
• Rural provider readiness
• Quality
• Medical Home
• Accountable Care Organizations
• Many Others

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Issue that Unites

• Rural!

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Health Reform for Rural America

• NRHA Agenda

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NRHA Believes

• Rural America needs health care reform.
• Rural America needs health reform done correctly.

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The Rural Uninsured

• A greater proportion of rural residents than
  urban residents are uninsured or covered through
  public sources. (23 compared to 19)
• 30 of uninsured rural residents are not employed
  compared to 27 of urban residents.
• Even so, for those who are employed, small firm
  size, low wages, and self-employment, etc.
  continue to be risk factors for higher uninsured
  rates in the most rural places.

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The greater problem in rural health care ACCESS

• So, health reform that expands health care
  coverage is necessary and possible, but there is
  a greater crisis in rural America ACCESS to
  health care. Coverage does not equate to access.
  
• Over 50 million Americans live in areas where
  there are too few providers to meet their basic
  primary care needs.
• Yet these rural patients face the most daunting
  of health care challenges per capita, rural
  populations are older, poorer and sicker.

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Change Must Come to Rural America, too.

• For any health reform to be a success, the health
  care crisis in rural America must first be
  resolved.
• Legislation that finally addresses the
  long-standing inequities and disparities in rural
  America must be included as part of Federal
  health care reform.

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NRHAs Message To Congress

• DONT FORGET RURAL!!!
• The challenges of rural
• The importance of rural health care (both for
  rural Americans and the rural economy)

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Healthcare Critical to Rural Economy

• Healthcare is the fastest growing segment of
  rural economy.
• Each rural physician can generate numerous other
  jobs in the local rural economy
• In most rural communities hospitals are the
  largest or second largest employer

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Recession Hits Rural America

• In December 2008 alone, 282,000 jobs were lost in
  the nations 2,048 rural counties.
• indicates a 29 increase in job losses.

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Rural Hospitals and the Recession

• 61 - decreased full or part-time staff in last 6
  months.
• 63 - expect to decrease full or part- time staff
  over the next year.
• 50 - accessing capital is somewhat difficult.
• 30 - accessing capital is very difficult.
• 10 stopped projects that were
• already in progress.
• 38 decided not to move forward
• with planned projects.

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The NRHA Solution

• To resolve the health care crisis in rural
  America, the rural health care safety net must be
  prevented from crumbling. Three reforms are
  crucial
• The workforce shortage crisis must be abated
• Equity in reimbursement must occur and
• Health disparities must be eliminated and
  vulnerable populations must be protected.

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Workforce Shortage

• Expand National Health Service Corp
• Title VII and Title VIII improvements
• Improve Residency Training Programs
• Medical School Rural Training Tracks
• Lift Caps on Rural Residency Programs
• Meet the Needs of Emergency Medical Services in
  Rural America
• More

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Equitable Reimbursement

• Rural Medicare Protections/Legislation
• Important CAH provisions (necessary provider, bed
  flex, HIT fix)
• RHC cap increase
• Medicare Dependent and Sole Community Hospital
  Provisions
• Geographic Practice Cost Indices (GPCI) payments
• Proposed Medicare Commission rural focus
• Carve out for rural safety net providers
• HRSA/ORHP Involvement
• Rural Representation on Board of Commissioners
• MedPAC Rural Representation
• 340B drug program expansion
• and much, much more

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CAHs Health Reform Priorities

• Reinstatement of Necessary Provider for CAHs
• Extension of the Flex grant program
• Expansion of the 340B drug program to CAHs
• Equity for CAHs in Medicare stimulus dollars for
  health information technology
• Flexibility in stringent bed count requirements
  for CAHs
• Elimination of CAH Isolation Test for ambulance
  reimbursement
• Ability for a CAH to negotiate reimbursement
  rates of a public plan health care option
• Greater ability for a CAH to recruit and retain
  physician residents and physicians and
• Ensuring equitable reimbursement for CAHs for
  anesthesia services.

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RHCs Health Reform Priorities

• Increase cap on RHC reimbursement.
• Expansion of 340B program to RHCs
• Provide grants for residency program development.
• Allow access for rural veterans.
• Improve provider shortages for RHCs.

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HEALTH REFORM

• Hurdleshome stretchrounding thirdface
  plant(?)additional generic sports clichés

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Health Reform Will it Happen?

• Attitudes are different on the Hill than in 1993.
• House bill PASSED (H.R. 3962)
• Senate Bill
• CBO Returned bill yesterday
• Senate Floor Debate
• Amendments
• Cloture (?)
• First, dont forget two steps toward health
  reform have already passed

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Step 1 SCHIP Expansion

• Down payment on health reform
• Covers an additional 4 million children

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Step 2 ARRAAmerican Recovery and Reinvestment
Act(Stimulus Bill)

• 787 billion package
• 87b for Medicaid
• HIT Investment
• 1.1b for comp. effect research
• Includes rural
• Rural broadband
• Rural water projects
• Workforce training
• Prevention/wellness

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Step 3 Health Reform Legislation
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Hurdle 1 House Acts

• House passes health reform bill (H.R. 3962)
• Positive steps, but falls
• short of significantly
• improving access crisis
• in rural America.

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The Vote H.R. 3962, the Affordable Health Care
for America Act

• YES 220 219 Democrats 1 Republican
• NO 215 39 Democrats 179 Republicans
• Note Rep. Bart Stupak Amendment gained the
  10-11 Democratic votes needed to get vote to the
  magic 218. (Unclear if Stupak language will
  remain in conferenced bill.)

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H.R. 3962, the basics

• Require all to have health insurance - provides
  sliding scale subsidy up to 400 of federal
  poverty level.
• Create a Health Insurance Exchange - Individuals
  and Employers can purchase.
• Require employers to provide coverage or pay into
  exchange (small employers exempted)
• Impose new insurance regulations on plans in
  exchange
• Expand Medicaid to 133 of FPL

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Is it good for Rural?

• NRHA Concerns
• Many Medicare Payment Inequities Not Addressed
• Residency Redistribution
• Investment in Workforce not sufficient (Title
  VII, Title VIII, GME provisions omitted)
• 340B expansion is reduced, and RHCs not included
• MedPAC rural rep stripped from
• final conference version.

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H.R. 3962 Rural Positives

• 340B Drug Expansion CAHs, MDH, SCH, RRC, for
  outpatient drugs.
• Primary Care Investment
• NHSC
• GME grants for expanding residency programs to
  RHCs and FQHCs
• Primary care payment increases extra 10 bonus
  for primary care in HPSA.
• IOM Study on Geographic Adjustment Factors
• Medicare Extenders plus
• marriage and family therapists and
• Mental health counselors
• Public Plan Option Negotiated Rates
• House Blue Dogs
• See website for details

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Sustainable Growth Rate (SGR)Developments

• Proposed 21 percent cut to physician Medicare
  payments
• House
• Original Bill had permanent SGR fix
• But, recently introduced its own stand-alone bill
  (H.R. 3961)
• Therefore lowering cost of health reform bill
  (H.R. 3962)
• Jeopardized American Medical Association support

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Hurdle 2 The Senate60 votes?

• Harry Reid (D-NV) announced public option will be
  a part of the blended Senate bill (Finance and
  HELP Committee).
• Durbin indicated Senate will finish this year,
  but likely conference bill next year.
• CBO score(s) slowed the process.

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Final Senate Bill with CBO Score

• Released Yesterday
• 849 Billion over 10 years
• Reduces Deficit
• 127 Billion over 10 years
• 650 Billion over next 10 years
• Transparency
• Reid "Everyone will have plenty of time to read
  this bill before they vote on it

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Senate Bill Highlights
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Finance Committee Positives

• Workforce Provisions
• Protection of Rural Programs in Redistribution of
  Unused Residency Slots
• Encouragement of Rural Training Track Programs
• Bonus payments for primary care and general
  surgery
• Workforce Shortage Advisory Committee
•  
• Medicare Provisions
• Extension of Floor on Medicare Work Geographic
  Adjustment
• Two-year extensions of important Medicare
  provisions for Rural Providers
• Rural Hospital Flex Program
• Therapy Cap Services
• Physician Pathology Services
• Ground Ambulance Services
• Medicare Mental Health Services
• Rural Hospital Flexibility Program
• Lab Services
• Medicare Dependent Hospital Program
• Temporary Relief to Low-Volume Hospitals
• Home health add-on for home health in rural
  areas.

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Heavy Rain With a Chance of Snowe

• Let it Snowe, Let it Snowe, Let it Snowe Snowe
  in the Forecast etc
• Olympia Snowe (R-ME)
• Only Republican (House or Senate)
• to vote for any final Committee bill
• But, only supported because of CO-OP plan over
  public option
• Though considered supporting bill with trigger

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HELP bill Is it good for rural?

• HELP bill contains very strong workforce
  provisions
• AHEC funding quadrupled - - patterned after
  Clinton reauthorization bill
• Strong investment in NHSC
• 340B Expansion
• Loan forgiveness

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HELP Committee

• Chairman Kennedy
• Senator Dodd (CT) filled in as chairman for
  health reform
• New Chairman, after Kennedys passing, Senator
  Harkin (IA)
• Strong Workforce provisions - outline and NRHA
  letter to Committee.
• AHEC, FQHC, NHSC, 340B inclusion
• See full summary on NRHA website

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BIG PICTURE Finance
HELP
Individual mandate Requires everyone to have health insurance YES, with exceptions YES
Fines Would be administered to those who dont get insurance YES includes hardship exemption for those unable to find coverage costing less than 8 percent of adjusted gross income YES includes hardship exemption for those unable to find affordable coverage
Employer mandate Penalizes employers that dont offer insurance NO. Starting in 2013, employers with more than 50 workers must repay the government for tax credits for employees YES exempts employers with 25 or fewer employees
Subsidies Government funds to assist in the purchase of health insurance YES. Gives tax credits to small businesses and low- and middle-income families undocumented immigrants are ineligible YES
Public Option A government-run health insurance plan designed to compete with private insurers NO. Proposes nonprofit, consumer-owned co-operatives that would offer alternatives to existing insurance plans. YES. The government would negotiate payment rates with health care providers
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Finance
HELP
Other provisions n Expands Medicaid to those with incomes at 133 percent of federal poverty level or less n Medicare would reward providers and hospitals for quality care n Low- to moderate-income Part D recipients would pay a discounted price for brand-name drugs during the donut hole gap in coverage n Individual or small-employer policies must offer certain coverage and meet the requirements of one of four benefit categories n 12 years of data exclusivity for biologic drugs n Emphasizes prevention and wellness n Voluntary insurance program for community-based assisted-living services
Offsets Only specified in the Senate Finance bill HELP committee did not have jurisdiction n Starting in 2013, charges a non-deductible 40 percent excise tax on insurance companies and administrators for plans costing more than 8,000 a year for individuals or 21,000 a year for families. The tax would apply to the amount of the premium in excess of the threshold. n Starting in 2010, imposes annual flat fees on insurance companies (6.7 billion), pharmaceutical manufacturers (2.3 billion), makers of medical devices (4 billion), allocated according to market share. n Starting in 2013, charges a non-deductible 40 percent excise tax on insurance companies and administrators for plans costing more than 8,000 a year for individuals or 21,000 a year for families. The tax would apply to the amount of the premium in excess of the threshold. n Starting in 2010, imposes annual flat fees on insurance companies (6.7 billion), pharmaceutical manufacturers (2.3 billion), makers of medical devices (4 billion), allocated according to market share.
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The Exchange

• Pay or Play/Employer Mandate
• Must give employees comprehensive, affordable
  health benefits, or you have to pay some
  fraction of your total payroll costs to the
  government. 
• Government then uses that money to fund the
  subsidies that are given to individuals and
  families who cant afford the premiums for plans
  in the Exchange (or as Kennedys bill calls it,
  the Gateway). 
• Certain exemptions for small businesses. 

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Public Plan

• Mandated Coverage - - waivers for those unable to
  afford it and prohibitions for insurance
  companies to deny coverage or to heighten costs
  based on pre-existing conditions.
• State Opt-Out Provision

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Rural amendments passed

•  
• Bingaman Ensuring GME redistribution is
  available to rural and other underserved states
  50 of redistributed slots to rural
• Bingaman Establishing Teaching Health
  Centers to increase number of primary care
  physicians Grants to develop residency programs
  at ambulatory care centers (RHCs, FQHCs, etc)
• Bingaman Ensures Appropriate Consultation with
  Mental Health and Substance Abuse Experts
• Conrad Two-year extension of super rural
  bonus payment for ambulance services
• Lincoln To restore the ratios used in
  determining geographic hospital wage index
  reclassification to the pre-October 1, 2008
  levels until the first fiscal year after the
  secretary makes a proposal(s) that considers the
  nine points specified in the Tax Relief and
  Health Care Act of 2006
• Carper Provides workplace wellness tax credits
• Stabenow To provide training for advance
  practice nurses
• Stabenow To establish a National Center on
  Hospital Quality
• Rockefeller Would add free clinics to list of
  provider eligible for Medicare and Medicaid
  incentives under the American Recover and
  Reinvestment Act of 2009
• Technical Correction on page 121 of Mark
  Clarifies that CAHs are eligible to receive 101
  of reasonable cost for providing outpatient
  services regardless of billing method and for
  providing ambulance services.
• Grassley - - GPCI, Method II CAH Fix
• Rockefeller - - Medicare Commission
•  

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Medicare Commission

• Finance proposal
• Requires the commission to implement policies
  that reduce cost growth in Medicare by at least
  1.5 annually beginning in 2014.
• If cost reductions werent met, HHS Secretary
  would have authority to make up the balance of
  the decrease necessary through a cumulative
  reduction in provider reimbursement.
• Congress would have 30 days to review Congress
  would need 2/3 majority to override.
• Saves 23 million over 5 years.
• Republican amendments to strike commission
  failed.
• Fate uncertain in the House.

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Rural Improvements to Medicare Commission

• Must protect access to care in rural and
  frontier.
• HRSA Administrator permanent member
• Commissioners confirmed by Finance Committee.

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Senate Floor Fight

• Public Option
• Subsidies
• Tax on Cadillac plans
• Olympia Snowe
• Democratic Opposition
• Significant Score

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Senate Floor Amendments

• Must hold strong provisions in HELP bill.
• Rural issues unite.
• Several outstanding issues

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Problems within Senate Caucus

• Several Senate moderate Democrats
• non-committal.
• Lieberman (I-CT) indicates he will
• filibuster.
• Liberal Senators non-committal.
• Snowe (R-ME) now non-supportive.
• Let the arm twisting begin

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Heees back

• Yesterday former President Bill Clinton became
  the arm-twister-in-chief.
• Warned Democratic Senators that economy cannot
  withstand out-of-control health care spending.
• Reminded Ds of 1994 midterm election cycle
  Democrats lost both the House and the Senate.

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Tough Climate in Senate

• No Rules Committee (ie, tough to limit
  amendments)
• Expect lengthy debate. Possible reading of
  bill
• Expect fights over big issues public plan,
  cost, abortion

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Senate Time Frame

• Doing the Math
• Transparency
• Bring to floor next week (possibly this weekend)
• Sen. Baucus out of town
• Floor Debate
• Amendments
• Assuming Cloture (60 Votes to Eliminate a
  Filibuster)
• Final Vote By Christmas?
• Possible, but then

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House and Senate Conference

• Bills are significantly different, so its going
  to take some time
• January (???)

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Sustainable Growth Rate (SGR)Developments

• Proposed 21 percent cut to physician Medicare
  payments
• Senate
• Finance Committee Jurisdiction
• Original mark
• Only temporary fix
• Most likely because of cost
• Stabenow (D-MI) offered stand-alone bill (S.
  1776)
• CBO score (245 billion)
• Therefore diverting cost from health reform bill
• Senate vote in October
• NO (57) YES (47), so NOT passed

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Senate Bill Highlights

• Kent Conrads CO-Op Plan
• Must have enough participation to make it viable
  critical mass.
• May not offer lower premiums but can offer
  choice.
• Only could become important sources of health
  coverage if govt. gets involved (control risk
  pooling, subsidies)
• Moot pointhowever
• Reid said no, included public option

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Senate Public Option

• Added in Senate leadership conference (Sen. Reid)
• States can opt-out, providing they offer similar
  alternative

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NRHA Senate Floor Strategy

• Final language released yesterday, so in process
  of developing strategy, but
• Watch for 340B
• Title VII
• Pharmacy reimbursement
• CAH
• HIT Incentives, Necessary Provider, Bed
  Flexibility

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Important Rural Amendments

• Bennet (D-CO)
• CAH HIT
• RHC 340B
• State Offices
• Pryor (D-AR)
• CAH 35-mile waiver
• Wyden (D-OR)
• CAH bed flex
• Wyden (D-OR)
• RHC cap
• Murkowski (R-AK), Begich (D-AK), Murray (D-WA),
  Cantwell (D-WA)
• Frontier clinic grant program
• Udall (D-CO)
• Workforce/pipeline
• Harkin (D-IA)
• Agriculture Safety Program
• Durbin (D-IL)
• CRNA
• Johanns (R-NE), Udall (D-UT)

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Morebut still in the developing process

• Rural Pharmacy AMP improvements
• Medical Liability Reform
• Sustainable Growth Rate
• Small rural hospital financing (loan program)
• CAH Isolation test

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NRHA Targeted Messages

• Grassroots push
• Call your Congressman/Senator
• Write your local paper
• Weekly Strategy Calls
• Web/Blog Updates

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Grassroots

• Support needed for amendments
• Join our grassroots team
• Weekly national call
• Daily updates
• Send blank e-mail to
• join-grassroots_at_lists.wisc.edu
• You will receive an activation e-mail. Encourage
  others to join as well!

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Senate/House Rural Health Caucus

• California Members
• Senate
• Senator Feinstein
• Senator Boxer
• House
• Rep. Wally Herger (R-02)
• Rep. Dennis Cardoza (D-18)
• Rep. Mike Thompson (D-01)
• Rep. Jerry Lewis (R-41)
• Rep. Buck McKoen (R-25)
• Rep. Pete Stark (D-13)
• Rep. Devin Nunes (R-21)

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California RHCs
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California CAHs
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Join the fight

• Become an NRHA member. Go to www.ruralhealthweb.o
  rg
• Daily blog updates
• http//blog.ruralhealthweb.org/
• Strengthen our voice for rural America!

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THANK YOU!

• Email me with any questions/follow up
• Danny Fernandez
• fernandez_at_NRHArural.org
• 202-639-0550