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Implications of Insurance and Health Reform for Mississippi Hospitals – As
Employers and as Health Care Providers
The Mississippi Bar – Joint Session of Business Law and
Health Law Sections
Thursday, July 8, 2010The Sandestin Hilton
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Healthcare and Insurance Reform: A Big Deal
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Goals of Health Insurance Reform
• Where We Were
- 46 Million uninsured- 25 million underinsured- Insureds bear cost of uninsured- Providers and suppliers cost shift to accommodate
treating of uninsured- Insureds pay higher premiums- Small group and individual coverage expensive/not
available
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Goals of Health Insurance Reform
• Where Health Insurance Reform Proposes to Take Us– Affordable commercial insurance
• Continuation of employer-sponsored group market• Subsidies for individuals and small businesses• Subsidies for 55-64 age group• Premium regulation
– Coverage for U.S. residents• Minimum essential coverage• New individual and group plans: qualified plans• Rights for patients
– More competitive insurance market• The Exchanges
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Mandated Changes in States’ Regulation of Individual and Group
Insurance Markets• Insurance Market Reform
– Effective for plan years beginning on/after 9/23/10• Elimination of lifetime benefit caps• Restrictions on plan rescission• Coverage of preventive care• Extension of coverage for children through age 25 and up to
the age 26• Standards for preparing summaries of plan benefits
– Effective for plan years beginning on/after 1/1/14• Guaranteed issue and renewal• Elimination of annual benefit caps• Premium rating reforms• Elimination of pre-existing condition exclusions• Minimum coverage and cost-sharing design standards for
individual/small group markets• Restrictions on coverage waiting periods in excess of 90 days
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Medical Loss Ratio• Starting in 2011:
– Large group plans that spend less than 85 percent of premium revenue and small group and individual market plans that spend less than 80 percent of premium revenue on clinical services and quality must provide a rebate to enrollees
• National Association of Insurance Commissioners missed its June 1, 2010 deadline and will complete definitions and standardized methodologies sometime before December 31, 2010
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Coverage Expansion• 95% of legal U.S. residents will have health insurance by
2019, up from 83% today• Health insurance exchanges and federal affordability
subsidies• Provision to allow young adults to stay on their parents’• insurance until age 26• Medicaid• Employer responsibility and small business tax credits• Health coverage will be extended to 32 million
Americans– 16 million through Medicaid expansions
• 23 million will remain uninsured; one-third are illegal immigrants
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Medicaid Expansion - 2014• Expansion of Coverage
– Up to 133% of Federal Poverty Level for working adults
• $14,404 for individual and $29,326 for family of four in 2009
– Employees eligible for Medicaid are not eligible for Exchange-based subsidy
– Mississippi Medicaid enrollees will increase by 400,000
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Medicare Payment Revisions• Reductions in Payment for Inpatient/ Outpatient,
Psychiatric, Rehabilitation Hospital Care• Focus on Preventive Care to Reduce Expensive
Procedures• Implement Innovative Systems to Deliver
Healthcare– ACOs, Medical Homes, Community-Based Services
• Adjust Hospital/Other Healthcare Payments to Reduce Costs– Value-based purchasing, Hospital Readmission
adjustments, Hospital Acquired Conditions adjustments, Post-acute care demonstration project
• Reduce Payments to Disproportionate Share Hospitals
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Comments From Panel Members
• Tammra Cascio
• Chadwick W. Russell
• Gary G. Marchand
• Gerald D. Wages
• Wallace Strickland
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IMPACT ON MISSISSIPPI HOSPITALS
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” - Author Unknown
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HOSPITALS AS EMPLOYERS• The Administration recently released preliminary rules for
grandfathering existing health insurance plans. Do you think that the rules will allow you to preserve your current plans?
• What are most important challenges facing hospitals as sponsors of employee health insurance? How will the reform legislation make it easier or harder for hospitals to meet those challenges?
• Will hospitals continue to provide employee coverage? • Health insurance reform limits annual coverage caps and
prohibits lifetime caps for plan years beginning in September. It also allows dependent coverage until the age 26. What impact will these immediate health insurance reform measures have on Mississippi hospitals?
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HOSPITALS AS HEALTHCARE PROVIDERS
• Impact of Increased Insurance Coverage:
– As of 2014, the health care bills mandate individual insurance coverage and increase Medicaid eligibility for individuals whose income is 133% of the federal poverty level or below.
– Do you perceive that this increase in the numbers of insureds will significantly impact emergency room registrations? What about overall hospital admissions and length of stay?
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HOSPITALS AS HEALTHCARE PROVIDERS
• Payment Increases:– Several healthcare reform measures offer increased
reimbursement mechanisms for rural hospitals and hospitals qualifying as 340B hospitals.
– Do you anticipate that these payment increases will replace reimbursement lost through various Medicare payment reductions?
• Payment Reductions:– What do hospitals perceive as the impact of the
revised payment mechanisms including productivity adjustments to annual market basket calculations, bundled post-acute care program, hospital acquired conditions and hospital readmission program adjustments; reductions in disproportionate share payments (both Medicare and Medicaid)?
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HOSPITALS AS HEALTHCARE PROVIDERS
• Impact/Import of Innovative Delivery and Payment Systems on Mississippi Hospitals– The new legislation offers a number of new
opportunities and challenges to hospitals and other providers including value-based purchasing, accountable care organizations, medical homes and other community-based Medicare and Medicaid initiatives.
– Does your hospital and/or health system have plans to take advantage of these programs?
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Health Care Workforce Initiatives• National commission to review health care workforce
and projected needs • Competitive grants for state workforce development
(eff. 2010)• Improved federally supported student loans
– Better terms for medical students in primary care– Increased loan amounts for nurses
• New loan program for pediatric subspecialists and pediatric/adolescent mental health providers working in underserved areas
• Grants for increased primary care training; increased funding for geriatric education centers; primary care extension programs
• Will these initiatives solve the physician shortage?
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HOSPITALS AS HEALTHCARE PROVIDERS
• Impact on Physician/Hospital Relationships– One of the themes of the reform legislation is
improved care coordination among providers. – Do you think that this will encourage closer
hospital-physician integration? – What do you anticipate are physician
expectations? – How will continued uncertainty about
permanent physician Medicare payment reform affect integration opportunities?
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HOSPITALS AS HEALTHCARE PROVIDERS
• HITECH EHR Incentives– Both the ARRA incentives for eligible hospitals and
eligible professionals to adopt electronic health records through the offering of incentive payments and the various healthcare reform measures appear to encourage and/or rely on health informatics and electronic health records for implementation.
– What steps are your facilities taking to position yourselves to qualify for EHR incentives and to be able to meet quality standards and report those standards as required by multiple healthcare reform measures?
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HOSPITALS AS CHARITABLE ORGANIZATIONS
• Healthcare reform measures include certain requirements for 501(c)(3) entities through the new section 501(r).
• Requires that charitable organizations:– Prepare community health needs
assessments every three years– Maintain financial assistance policies among
other requirements.
• How will hospitals meet these requirements and what additional resources will be required?
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THANK YOU!!!Dinetia M. NewmanBalch & Bingham, LLP401 East Capital Street, Suite 200Jackson, MS [email protected]
Gerald D. WagesNorth Mississippi Medical Center830 South Gloster StreetTupelo, MS [email protected]
Wallace StricklandRush Health Systems, Inc.1314 19th AvenueMeridian, MS [email protected]
Gary G. MarchandGulfport Memorial Hospital4500 Thirteenth StreetGulfport, MS [email protected]
Chadwick W. RussellSouthern Farm Bureau Life Insurance Company1401 Livingston LaneJackson, MS 39213601-981-5332 ext [email protected]
Tammra CascioGulf Guaranty Life Insurance Company4785 Interstate 55 North, Suite 200Jackson, MS [email protected]
