In the aftermath of the Supreme Court's decision on the Patient Protection and Affordable Care Act, many hospitals and health systems are wondering: How will this affect us?
The ruling on Medicaid's expansion provision within the PPACA may have some of the biggest impacts. The Supreme Court said the Medicaid expansion is optional, and states would only lose new Medicaid funding from the federal government if they decided to not expand the program.
The PPACA and the Medicaid expansion are not the only issues with Medicaid currently. Several states — most recently Louisiana and Illinois — are making significant cuts to their Medicaid programs, leaving many hospitals with a feeling of insecurity about their Medicaid funds for the future.
One particular subgroup of acute-care hospitals that has been sweating out current Medicaid policies is the children's hospital. Children's hospitals, much like safety-net hospitals, have Medicaid as a dominant payor. So how would the Medicaid expansion, coupled with mass-scale reductions in individual state Medicaid funding, affect children's hospitals?
Here, three executives within the children's hospital sector give their take on Medicaid, the Children's Health Insurance Program (which is intended for families that can't afford coverage for children but don't qualify for Medicaid), healthcare reform and what it all means for children's hospitals going forward.
Question: What concerns you most about Medicaid today, and how do you think the Medicaid expansion from the healthcare reform law will pan out?
Mark Wietecha, President and CEO of the Children's Hospital Association. Today, Medicaid is the largest program for children's healthcare, covering one out of three children nationwide. While 30 million children depend on Medicaid for coverage, the program faces major challenges when it comes to ensuring access to primary and specialty care.
The country's recession and struggling economy has forced many states to cut their Medicaid programs which has, in turn, weakened the core program and children's access to care. Governors will point out that total overall funding for Medicaid has increased, but once we account for the increase in enrolled population due to a weak economy, we find that Medicaid spending has actually increased at a slower pace than other healthcare programs. The slower rate of growth can be attributed to the fact that nearly every state has cut or frozen its provider payments over the past five years. Keep in mind that, on average, Medicaid reimburses providers 30 percent less than what Medicare reimburses for the same service. As a result of inadequate reimbursement and payment freezes, many physicians simply do not accept Medicaid. The bottom line: Medicaid coverage does not equal access to care.
One of the messages that the Children's Hospital Association is trying to convey to state and federal legislators is that we can reduce Medicaid costs by advancing innovative care models rather than cutting Medicaid or freezing payments. For example, many of the nation's children's hospitals operate clinics in underserved communities staffed by pediatric residents, thus easing demand for care in more expensive settings like the emergency room. In addition, integrated care models for children with chronic and complex medical conditions are demonstrating significant cost reductions while improving care coordination. Given 80 percent of children with chronic and complex medical conditions are treated at children's hospitals, if states continue to cut their Medicaid budgets to ribbons, the challenge of access to needed services today will become an ever-increasing concern tomorrow.
The CHA supported the Affordable Care Act as it included many positive provisions for children's healthcare. However, it is important to note that the Medicaid expansion will not directly impact many children in terms of new enrollment. Prior to the enactment of the ACA, most states expanded coverage for children through either Medicaid or their Children's Health Insurance Program. As a result, of the roughly 10 million children who were uninsured prior to the ACA, most were already eligible but simply not enrolled in the program. So while today children make up approximately half of total Medicaid enrollment and less than a quarter of total Medicaid spending, after the ACA adds 16 million more enrollees to the program, children as a percentage of the Medicaid budget will decline significantly. As a result of the increase of newly eligible adult Medicaid enrollees and rapidly increasing costs of care among populations other than children, spending on children's healthcare will get squeezed.
While public attention is focused on whether states will expand Medicaid based on the Supreme Court's ruling, there is a real risk that children could actually lose coverage due to the ACA. A key provision in healthcare reform is the maintenance of effort requirement that prevents states from changing their eligibility thresholds for children until 2019. Yet states could seek flexibility from the federal government regarding MOE in exchange for agreeing to expansion. The bottom line: Children could lose benefits under Medicaid unless the administration stays strong on MOE.
As a nation, while we face many difficult challenges ahead, federal and state policymakers need to ensure we not sacrifice the healthcare needs of children, especially those who are most vulnerable due to chronic and complex medical conditions. We must hold children harmless when the critical healthcare reform decisions are made and do our best to meet their needs.
James Mandell, MD, CEO of Boston Children's Hospital. Medicaid is essential to child health in this country. It is the single largest payor for pediatric care and has improved access and health outcomes for millions of children nationally. Notwithstanding these successes, it is a program with significant challenges. It tends to be underfunded and over-politicized. It is too often stigmatized as a "welfare" program or a "budget buster." It is sometimes challenged by a lack of resources to innovate in its financing and care delivery. As a regional and national center for complex care, Medicaid's state-based management structure can cause real problems for Boston Children's clinicians attempting to treat and coordinate care for the most complex patients. The court's decision fortunately preserves this essential program for children; we will have to wait to see whether it has simultaneously destabilized the Medicaid program in significant ways.
It's not clear at the moment what the impact of the Court's decision on the Affordable Care Act will have on the Medicaid program. Approximately 16 million people (mostly uninsured single adults) were expected to gain coverage through a significant Medicaid expansion paid for by the federal government. In the Medicaid part of the opinion, the Court decided that states had to have a real choice about whether they wanted to expand their existing programs consistent with the health reform law. The majority believes that states should not be forced to jeopardize their existing programs and funding if they choose not to expand coverage this dramatically. This could clearly lead to some states opting out of the Medicaid expansion in the short term, despite the guarantee of federal funding for almost all of the cost.
Thomas Kmetz, President of Kosair Children's Hospital (Louisville, Ky.). Kosair Children's Hospital is Kentucky's largest Medicaid provider with 65 percent of our patients covered by Medicaid. This is a vulnerable population that requires greater care and attention. Our biggest Medicaid concern is the threat of decreased reimbursement to children's providers and the strain on states' budgets in these tough economic times.
As we look to expand Medicaid to cover more people, the pool gets smaller and smaller. That puts our children at risk. Because Medicaid pays less than it costs to treat a child, 30 percent less than Medicare even, children face a risk of losing access to care. Many children with Medicaid coverage are forced to wait for appointments or are not seen in offices at all. This puts a greater pressure on Kosair Children's Hospital as these children arrive in our emergency departments and are often times sicker than they would have been if they'd received routine treatment in a physician's office.
In Kentucky, the Medicaid budget crisis has forced the state to implement a managed care system. Even with these changes, the budget outlook is bleak.
There are many advantages and positive aspects to healthcare reform, though it poses some operational and financial challenges to children's hospitals like Kosair Children's Hospital. We will be tasked with maintaining the same or even better levels of patient care. At the same time, we will be facing decreases in Medicaid payments and private plan payouts to cover our costs and ensure we have the necessary medical staff, resources and equipment.
As we expand our Medicaid rolls we must look at innovative care models to do more with less. We must look to reforms that lead to lower costs of care while maintaining the standards these children deserve. The answer is not to cut funding. The long-term solution requires an investment in new models of organization that yield more integration, a greater focus on cost, quality and value, transparency of quality and safety measures, and more attention to wellness and prevention.
The ruling on Medicaid's expansion provision within the PPACA may have some of the biggest impacts. The Supreme Court said the Medicaid expansion is optional, and states would only lose new Medicaid funding from the federal government if they decided to not expand the program.
The PPACA and the Medicaid expansion are not the only issues with Medicaid currently. Several states — most recently Louisiana and Illinois — are making significant cuts to their Medicaid programs, leaving many hospitals with a feeling of insecurity about their Medicaid funds for the future.
One particular subgroup of acute-care hospitals that has been sweating out current Medicaid policies is the children's hospital. Children's hospitals, much like safety-net hospitals, have Medicaid as a dominant payor. So how would the Medicaid expansion, coupled with mass-scale reductions in individual state Medicaid funding, affect children's hospitals?
Here, three executives within the children's hospital sector give their take on Medicaid, the Children's Health Insurance Program (which is intended for families that can't afford coverage for children but don't qualify for Medicaid), healthcare reform and what it all means for children's hospitals going forward.
Question: What concerns you most about Medicaid today, and how do you think the Medicaid expansion from the healthcare reform law will pan out?
Mark Wietecha, President and CEO of the Children's Hospital Association. Today, Medicaid is the largest program for children's healthcare, covering one out of three children nationwide. While 30 million children depend on Medicaid for coverage, the program faces major challenges when it comes to ensuring access to primary and specialty care. The country's recession and struggling economy has forced many states to cut their Medicaid programs which has, in turn, weakened the core program and children's access to care. Governors will point out that total overall funding for Medicaid has increased, but once we account for the increase in enrolled population due to a weak economy, we find that Medicaid spending has actually increased at a slower pace than other healthcare programs. The slower rate of growth can be attributed to the fact that nearly every state has cut or frozen its provider payments over the past five years. Keep in mind that, on average, Medicaid reimburses providers 30 percent less than what Medicare reimburses for the same service. As a result of inadequate reimbursement and payment freezes, many physicians simply do not accept Medicaid. The bottom line: Medicaid coverage does not equal access to care.
One of the messages that the Children's Hospital Association is trying to convey to state and federal legislators is that we can reduce Medicaid costs by advancing innovative care models rather than cutting Medicaid or freezing payments. For example, many of the nation's children's hospitals operate clinics in underserved communities staffed by pediatric residents, thus easing demand for care in more expensive settings like the emergency room. In addition, integrated care models for children with chronic and complex medical conditions are demonstrating significant cost reductions while improving care coordination. Given 80 percent of children with chronic and complex medical conditions are treated at children's hospitals, if states continue to cut their Medicaid budgets to ribbons, the challenge of access to needed services today will become an ever-increasing concern tomorrow.
The CHA supported the Affordable Care Act as it included many positive provisions for children's healthcare. However, it is important to note that the Medicaid expansion will not directly impact many children in terms of new enrollment. Prior to the enactment of the ACA, most states expanded coverage for children through either Medicaid or their Children's Health Insurance Program. As a result, of the roughly 10 million children who were uninsured prior to the ACA, most were already eligible but simply not enrolled in the program. So while today children make up approximately half of total Medicaid enrollment and less than a quarter of total Medicaid spending, after the ACA adds 16 million more enrollees to the program, children as a percentage of the Medicaid budget will decline significantly. As a result of the increase of newly eligible adult Medicaid enrollees and rapidly increasing costs of care among populations other than children, spending on children's healthcare will get squeezed.
While public attention is focused on whether states will expand Medicaid based on the Supreme Court's ruling, there is a real risk that children could actually lose coverage due to the ACA. A key provision in healthcare reform is the maintenance of effort requirement that prevents states from changing their eligibility thresholds for children until 2019. Yet states could seek flexibility from the federal government regarding MOE in exchange for agreeing to expansion. The bottom line: Children could lose benefits under Medicaid unless the administration stays strong on MOE.
As a nation, while we face many difficult challenges ahead, federal and state policymakers need to ensure we not sacrifice the healthcare needs of children, especially those who are most vulnerable due to chronic and complex medical conditions. We must hold children harmless when the critical healthcare reform decisions are made and do our best to meet their needs.
James Mandell, MD, CEO of Boston Children's Hospital. Medicaid is essential to child health in this country. It is the single largest payor for pediatric care and has improved access and health outcomes for millions of children nationally. Notwithstanding these successes, it is a program with significant challenges. It tends to be underfunded and over-politicized. It is too often stigmatized as a "welfare" program or a "budget buster." It is sometimes challenged by a lack of resources to innovate in its financing and care delivery. As a regional and national center for complex care, Medicaid's state-based management structure can cause real problems for Boston Children's clinicians attempting to treat and coordinate care for the most complex patients. The court's decision fortunately preserves this essential program for children; we will have to wait to see whether it has simultaneously destabilized the Medicaid program in significant ways.It's not clear at the moment what the impact of the Court's decision on the Affordable Care Act will have on the Medicaid program. Approximately 16 million people (mostly uninsured single adults) were expected to gain coverage through a significant Medicaid expansion paid for by the federal government. In the Medicaid part of the opinion, the Court decided that states had to have a real choice about whether they wanted to expand their existing programs consistent with the health reform law. The majority believes that states should not be forced to jeopardize their existing programs and funding if they choose not to expand coverage this dramatically. This could clearly lead to some states opting out of the Medicaid expansion in the short term, despite the guarantee of federal funding for almost all of the cost.
Thomas Kmetz, President of Kosair Children's Hospital (Louisville, Ky.). Kosair Children's Hospital is Kentucky's largest Medicaid provider with 65 percent of our patients covered by Medicaid. This is a vulnerable population that requires greater care and attention. Our biggest Medicaid concern is the threat of decreased reimbursement to children's providers and the strain on states' budgets in these tough economic times. As we look to expand Medicaid to cover more people, the pool gets smaller and smaller. That puts our children at risk. Because Medicaid pays less than it costs to treat a child, 30 percent less than Medicare even, children face a risk of losing access to care. Many children with Medicaid coverage are forced to wait for appointments or are not seen in offices at all. This puts a greater pressure on Kosair Children's Hospital as these children arrive in our emergency departments and are often times sicker than they would have been if they'd received routine treatment in a physician's office.
In Kentucky, the Medicaid budget crisis has forced the state to implement a managed care system. Even with these changes, the budget outlook is bleak.
There are many advantages and positive aspects to healthcare reform, though it poses some operational and financial challenges to children's hospitals like Kosair Children's Hospital. We will be tasked with maintaining the same or even better levels of patient care. At the same time, we will be facing decreases in Medicaid payments and private plan payouts to cover our costs and ensure we have the necessary medical staff, resources and equipment.
As we expand our Medicaid rolls we must look at innovative care models to do more with less. We must look to reforms that lead to lower costs of care while maintaining the standards these children deserve. The answer is not to cut funding. The long-term solution requires an investment in new models of organization that yield more integration, a greater focus on cost, quality and value, transparency of quality and safety measures, and more attention to wellness and prevention.
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