Opinion -- Final Federal Budget Bill Includes Devastating Cuts to Medicaid

By Jon Doolittle

The U.S. House today adopted H.R. 1, routinely referred to as the “One Big Beautiful Bill,” as amended by the Senate earlier this week. The bill will now be sent to President Trump for his signature.

MHA, Missouri hospital leaders and you, supported by partners including Missouri Gov. Mike Kehoe and other health care organizations, have worked since January to provide impact projections and relay our concerns to Missouri’s congressional delegation as they pursued a nearly $1 trillion funding decrease over 10 years to the Medicaid program. We are disappointed that such significant Medicaid cuts are poised to become law, because Missouri’s share of these cuts will harm those covered by Medicaid, all Missourians’ access to health care, the ability of hospitals to provide services and our state’s budget.

Despite this new framework of reduced funding, I want to thank you for your personal outreach to your congressional representative and U.S. senators, as well as asking your friends and family to do the same. Your voices helped prevent more severe cuts and provided fuel to Sen. Josh Hawley in his work to help secure a nationwide, five-year $50 billion Rural Health Transformation Program scheduled to begin next year that should aid already financially strained rural hospitals. The bill also provides for beneficial increases to the Medicare physician fee schedule.

Here in Missouri, H.R. 1 will result in as much as $5.7 billion in funding cuts to Medicaid, known as MO HealthNet, over the next 10 years due to these provisions:

Phased-in cuts, beginning in 2028, to provider taxes to 3.5% — a rate that will result in a nearly $1.2 billion annual loss to Missouri's health care funding when fully implemented

Capped state-directed payments, an important funding system for hospitals, at 100% of Medicare reimbursement rates

Unfortunately, we estimate that Missouri’s share of the above-mentioned Rural Health Transformation Program and physician fee increases will be outweighed by the provider tax and state-directed payment cuts by approximately 2030. Further, while the cuts directly impact hospitals, the transformation program funding can flow to other providers in the health care system.

As the “One Big Beautiful Bill” chapter of our advocacy closes, I remind you that there’s always a next step. Your MHA team is working through the full details of the 900-page bill and are dedicated to advantaging our member hospitals and health systems in the near and long term. Just as we did in January when the budget reconciliation bill was in its infancy, we will continue to work with our members, our partners and other experts to mitigate these impacts and set our goals to help Missouri’s hospitals and health systems achieve their current and future missions in service of their communities.

Jon Doolittle is the President of the Missouri Hospital Association. He previously served as the CEO of Mosaic in Albany and is a graduate of Albany High School.

Northwest Medical Center CEO Jon Doolittle Elected as Missouri Health Association’s Northwest District Council President

Northwest Medical Center CEO Jon Doolittle was recently elected as President of the Missouri Hospital Association’s Northwest District Council.  The Missouri Health Association (MHA) is a non-profit membership association that represents all acute care hospitals in Missouri, as well as, most federal and state hospitals, rehabilitation facilities and psychiatric care centers. 

Currently, there are six MHA districts that meet to discuss healthcare policies, activities, and programs.  As president of the northwest district, Mr. Doolittle’s primary responsibilities include presiding over council meetings, as well as, directing input from council members on national, state, and regional health care policies to the MHA Board of Trustees.  He will also help select recipients of MHA’s Excellence in Governance awards, which recognizes hospital board members throughout the state for exceptional health care leadership.      

"I am honored to serve as President of the MHA Northwest District Council.  In that role, I get to work with representatives from other provider organizations to advocate for policies and programs that will allow Missouri communities access to quality healthcare.  Most importantly, I believe that MHA leadership helps generate new ideas and opportunities for continual growth of the already robust care we provide to the people we are privileged to serve.”  --Jon Doolittle, Northwest Medical Center CEO

“We are pleased to have someone with Jon’s experience assume this important leadership role.”Herb B. Kuhn, MHA President and CEO

Doolittle’s one-year term as MHA Northwest District Council President began January 1^st of this year.

To learn more about Northwest Medical Center CEO Jon Doolittle Elected as Missouri Health Association’s Northwest District Council President contact Trisha Kellogg at 660-726-3941 or 970-903-0574 or trisha.kellogg@northwestmedicalcenter.net  

Gov. Nixon voices support for Medicaid expansion

By Matt Evans, Eric Stoyanov and Nick Thompson

(MDN News) -- Gov. Jay Nixon announced his support for expansion of the state's Medicaid program under the new federal health care law.

But his proposal for one of the state's largest Medicaid expansions in history came under immediate attack from top Republican leaders.

At a series of news conferences across the state, Nixon pointed to the federal law that would provide full federal funding for the health care coverage of up to 300,000 recipients for the first three years.

After that, however, the state would have to begin picking up a part of the expense at a cost to the state's budget estimated to exceed $100 million per year.

Republican critics, including the House Speaker and lieutenant governor, argued the state could not afford that cost. Nixon, however cited a University of Missouri study that predicts more than 24,000 jobs can be created in 2014 if the state takes part in the expansion.

While Republicans criticized Nixon's welfare expansion proposal, a slight opening emerged for agreement.

The Republican-leaning Missouri Chamber of Commerce endorsed the expansion, and the Senate's Appropriations Committee chair said he wanted to wait on a decision until he got more information from the administration.

"We support the expansion," chamber spokeswomen Karen Buschmann said. "While we do not support the Affordable Care Act, we are supporting this expansion as part of it. It is the law of the land. We do not feel that we should leave the federal money on the table."  

Under the Affordable Care Act, states must expand the Medicaid program to cover people with incomes below 138 percent of the federal poverty line. In upholding the federal law, The U.S. Supreme Court gave states the option to expand the program or not.

Under the expansion proposal, the federal government would foot the bill of expanding the program for the first three years. In 2017, the state would pay 5 percent of the costs and by 2020 the state would pay up to 10 percent.

"Congress passed it, the President signed it, the U.S. Supreme Court upheld it. It is the law of the land," Nixon said during his series of news conferences in St. Louis, Kansas City and Springfield.

Nixon's Republican critics charged the governor was expanding the state's largest welfare program, which already costs Missouri $8 billion a year.

"Overwhelming majorities of the legislature are opposed to this and will not go along with a gigantic expansion of welfare," Republican Lt. Gov. Peter Kinder said. "I think those that do support it in the legislature are overwhelmingly outnumbered and that it will not come to a vote in either the House or the Senate."

House Speaker Tim Jones, R-St. Louis County, could not be reached for comment but said in a statement that he is concerned where the funding will come from for the Medicaid expansion.

"Now is not the time to put our state on the end of yet another big-government program that will only increase the burden on future taxpayers," Jones said.

A study commissioned by the Missouri Hospital Association and the Missouri Foundation for Health predicts as many as 220,000 Missourians would be eligible for the expanded program. Other studies, however, project as many as 300,000 people would be eligible in the state.

According to the University of Missouri study, the federal government would pay about $8.2 billion through 2019 while the state would spend about $332.9 million and about $100 million per year after 2019 to cover new enrollees. A report released earlier this week by the Kaiser Family Foundation and Urban Institute projected the federal government's cost at $17.8 billion and with the state's share at $1.6 billion from 2013 to 2022.

Missouri hospitals are also advocating for the expansion, citing losses in federal payments that reimburse hospitals serving large numbers of low-income patients.

A provision of the federal health care law cuts Disproportionate Share Hospital Adjustment Payments (DSH) in half by 2020. Those federal payments go to hospitals that treat large numbers of low-income patients without health coverage. Missouri received the seventh highest DSH funding in the country in 2011.

Dave Dillon, a spokesman for the Missouri Hospital Association, said Missouri hospitals provide $1 billion worth of uncompensated care in any given year.

Dillon said without the expansion, some Missouri hospitals may suffer when the reimbursement payments are cut. The expansion would allow those low-income patients without insurance to enroll in Medicaid, making DSH payments obsolete.

"If they disappear or are substantially reduced and we don't see an increase in Medicaid, or folks enrolling in an exchange, the hospital and health care infrastructure in the state will be significantly hurt by this," Dillon said.   

Opinion: Missouri Hospitals Navigate Difficult Environment

Herb B. Kuhn
President and CEO
Missouri Hospital Association

Missouri Hospitals Navigate Difficult Environment

Health care policy isn’t what you think about when you roll into a hospital emergency department or check in at the admitting desk to prepare for a procedure. In fact, it’s probably the last thing on your mind. What you’re concerned about is getting the best care in the best environment available. Ultimately, however, health care policy determines if that hospital is waiting for you.

The 2012 election has moved the health care debate to the forefront, which is good. A robust debate about the direction of the health care system — whether the Affordable Care Act or the future of Medicare — is important for designing the future health care delivery system to meet the needs and desires of patients and families. However, the ongoing nature of the debate complicates hospitals’ ability to make investments.

The Missouri Hospital Association has released a new study identifying some of the most significant health care policy issues for the state’s hospitals. The study focuses on issues that are unknown but could potentially affect hospitals in Missouri, including the 2012 elections and the pending decision by lawmakers to expand Medicaid through the ACA. It also addresses trends that are clearer, such as economic and demographic trends, consolidation in health care and the impact of technology and performance improvement.

In broad terms, what the research indicates is that Missouri’s hospitals will be challenged by the confluence of state and national policy decisions, fundamental shifts in the way the health care system operates and Missouri’s poor community health indicators.

Cuts to entitlements, especially significant federal cuts to Medicare, could jeopardize hospitals and physicians and limit access to care. The state’s uncertainty to expand Medicaid as outlined in the ACA would harm hospitals that surrender federal funding to offset the cost of care with the expectation of expanded coverage. Entitlement reform will require individuals to make decisions about their values. And, significant cuts to these federal health programs will affect both the enrollees and the costs of care for all Missourians.

The difficult financial climate has led to integration in health care. More hospitals are aligning through partnerships, mergers and acquisitions. And, the number of physicians who are seeking hospital employment is increasing. Although these trends can bring additional assets for patient health, the sharing of technology and streamlining of patient transitions are important and costly investments, and the history of integration is uneven.

Missouri’s population is older, poorer and sicker than many other states. This will present challenges to hospitals as emphasis is placed on improving the health of our communities and payments that depend on improved performance. No member of the provider community can independently influence these metrics. It will require a coalition of health care providers and community leaders to improve Missouri’s health indicators.

Missourians deserve great hospitals. And, despite the turbulent and challenging issues hospitals currently face, we’re committed to delivering the best care to the communities we serve.

Health care policy is important, especially because it affects the patients that Missouri’s hospitals serve every day.

The Missouri Hospital Association is a not-for-profit association in Jefferson City that represents 153 Missouri hospitals. In addition to representation and advocacy on behalf of its members, the association offers continuing education programs on current health topics and seeks to educate the public, as well as legislative representatives, about health care issues.

OPINION SUBMISSION: Court Decision Could Increase Costs, Reduce Access To Health Services

Herb B. Kuhn
President and CEO
Missouri Hospital Association

On Tuesday, July 31, the Missouri Supreme Court issued a decision in Watts v. Cox that could have implications for every Missourian. The ruling was ostensibly about juries and their responsibilities in determining damages in cases of medical liability. However, the decision could have much broader consequences, including the already difficult ability to find a physician and an increase in health care costs.

In 2002, the Missouri Supreme Court issued a decision essentially eliminating the state’s cap on noneconomic damages in medical malpractice lawsuits. The Scott decision left Missouri’s medical liability insurers without a way to reliably gauge price and risk when issuing liability policies to medical providers. And, without a clear understanding of their exposure, liability insurers had two choices — get out of the marketplace or significantly increase premiums to insulate themselves against the unknown. They did both. As a result, insurance rates skyrocketed, medical practices closed, access to emergency and trauma care suffered, and physicians left the state. 

In response to the ongoing crisis, the Missouri General Assembly crafted a legislative solution in 2005. The linchpin of that effort was a restoration of the environment prior to the Scott decision — single cap for noneconomic damages. As expected, the fix brought stability and clarity to the marketplace, and the cost of medical liability insurance fell precipitously. In fact, Missouri physicians experienced a $27 million decrease in the cost of liability insurance between 2005 and 2010, with a total reduction of $44.5 million for all health care providers combined. Now, in the aftermath of the Watts decision, Missouri has returned to a marketplace without cues for risk or pricing. 

The timing of the Watts decision couldn’t be worse. In 2014, as many as 500,000 Missourians could gain access to health insurance through a health insurance exchange or Medicaid. However, we can’t generate or attract physicians fast enough to meet the demand for care anticipated in 2014 and beyond. The absence of liability caps has, in the past, discouraged physicians from practicing in Missouri — we know that from the state’s experience between 2002 and 2005. This unfortunate new barrier will hurt hospitals’ efforts to recruit and retain physicians and discourage physicians from choosing Missouri as a location to establish their practices. 

What does this mean for the average Missourian? First, it will likely be more difficult for Missourians to find a physician when they need one, especially in the future as many older physicians prepare to retire. Second, the costs associated with uncertainty will result in increased premiums for physicians, and these costs will be passed along to patients. 

On August 2, a coalition of health care, insurance, business and legal organizations sent a letter to Gov. Jay Nixon asking for his help in crafting an appropriate response to the decision. It is our hope that together with the state’s leadership, the coalition can find a resolution that ensures Missourians can continue to access the care they need.

Hospitals Prepare For Response To All Hazards

by Herb Kuhn

President & CEO

Missouri Hospital Association

The images from Japan’s earthquake, tsunami and subsequent reactor disaster have prompted many Missourians to ask “Are we ready?” It is a fair question.

Readiness is a journey, not a destination. However, Missouri’s hospitals are significantly better prepared than they were a decade ago. Since 2002, hospitals have benefitted from federal funds through the Missouri Department of Health and Senior Services to expand our readiness efforts. The value of this funding has been further enhanced through our coordination with local, regional and statewide partners, including the state’s emergency response organizations.

Through the program, hospitals have been supplied with disaster-specific equipment to augment their capacity to respond. They also can benefit from deployable regional supply and equipment caches. In addition, we’ve significantly enhanced hospitals’ communications capacity and interoperability so that they can talk to each other and other emergency management organizations more efficiently. This winter’s paralyzing snowstorms provided an opportunity to test our improved communication systems — with great success.

Knowing how to use the tools is vital. Between July 1, 2010, and June 30, 2011, hospitals will have held more than 350 hospital-specific readiness exercises. In May, numerous Missouri hospitals will participate in a national level exercise organized by the Federal Emergency Management Agency and the U.S. Department of Defense that simulates response to an earthquake along the New Madrid fault line. The May NLE will take hospitals’ planning to the next level.

Despite the gut-wrenching scenes from Japan, severe weather — such as a tornado or an ice storm — is the most prevalent threat here in Missouri. However, to prepare for any contingency, hospital planning embraces an “all hazards” approach. Since January 2000, 27 federal disaster or emergency declarations have been issued for Missouri. We know it isn’t a question of “if” but rather “when.” It’s our goal to be prepared and ready to serve our patients and communities 24/7.

MHA’s report, “Missouri Hospitals’ Emergency Preparedness: Accomplishments and Next Steps” is available at www.mhanet.com.