Thursday, January 29, 2015

Kansas hospitals say federal officials willing to negotiate on Medicaid expansion

KHI News Service

A group of Kansas hospital leaders is doing what Gov. Sam Brownback has so far declined to do: negotiate with federal officials on Medicaid expansion.

A delegation of hospital executives recently traveled to Washington, D.C., to meet with officials at the Centers for Medicare and Medicaid Services and outline an expansion proposal they are developing for Brownback and Kansas lawmakers to consider this session.

They went seeking some indication of whether their plan would pass muster. And they got it, according to Jeff Korsmo, chief executive of Wichita-based Via Christi Health.

He told a legislative committee this week that CMS officials indicated the proposal, which relies more on the private sector to expand coverage, was “within the boundaries of what would be accepted.”

Tom Bell, chief executive of the Kansas Hospital Association, said the meeting and recent reports about President Barack Obama’s desire to compromise with Republican governors seeking to expand Medicaid on their own terms has convinced him that Kansas has an opportunity to do the same.

“This is a great opportunity for states to design programs that work for them and go to the federal government and say, ‘This is what works for our state,’” Bell told the House Vision 2020 Committee.

Just this week, Indiana received approval for what Republican Gov. Mike Pence calls “the first-ever consumer-driven health care plan for a low-income population.”

The plan requires low-income adults with annual incomes below 138 percent of the federal poverty level — $16,105 for individuals and $32,913 for a family of four — to help pay for their coverage and to pay more if they make unnecessary trips to the emergency room.

The proposal being developed by Kansas hospitals would extend Medicaid benefits to many low-income adults and help others purchase coverage if they have access to it through their employers but have been unable to afford it.

The proposal also would give beneficiaries the option of purchasing high-deductible plans or help them create health savings accounts.

And, like Indiana’s plan, it would require them to pay some of their health care costs.

 The “personal responsibility” elements of the plan are intended to address the concerns of conservative legislators who don’t like the idea of extending taxpayer-funded health coverage to non-disabled adults. Brownback shares those concerns.

In an interview last summer with the conservative Heritage Foundation, the governor said getting people jobs was better policy than “giving (government) handouts to able-bodied individuals.”

Kansas’ privatized Medicaid program, known as KanCare, provides insurance to nearly 370,000 needy and disabled Kansans, but it doesn’t cover able-bodied adults without children no matter how poor they are.

Estimates vary, but Medicaid expansion would extend coverage to between 140,000 and 170,000 Kansans.

Lawmakers discussing expansion for the first time 

The Vision 2020 Committee hearings mark the first time that legislators have formally discussed a Medicaid expansion proposal.

But it doesn’t mean that legislative leaders have dropped their opposition.

The vision committee – which was formed to study issues – is perhaps the only House panel still controlled by moderate Republicans.

“No one has said we shouldn’t be holding these hearings, we shouldn’t be gathering information,” said Rep. Tom Sloan, a moderate Republican from Lawrence and chairman of the committee. “There is a conversation this year; there hasn’t been one before.”

Sloan wants to have a bill written by Feb. 9. Once drafted, Sloan said he will ask Speaker Ray Merrick to have the bill worked by another committee, most likely the Health and Human Services Committee. It’s not clear whether Merrick, a strong opponent of expansion, will honor that request.

It’s also not clear what the new chair of the HHS committee, Rep. Dan Hawkins, a Wichita Republican, would do with the bill. Hawkins is on record opposing the kind of Medicaid expansion called for in the federal health reform law. But, he said that he’s open to considering alternatives.

“Instead of just saying ‘no,’ we need to come up with a plan,” Hawkins said.

Hawkins said rather than focusing on the bill developed by the vision committee, he may schedule hearings on another “conservative plan” that he is helping to write. “As time goes along you’re going to see some things come out. I’m not ready to talk about them right now, but we’re working on them,” he said.

Why hospitals are pushing 

Medicaid expansion is an urgent financial issue for many Kansas hospitals.

The American Hospital Association supported the Affordable Care Act on the condition that planned cuts in Medicare reimbursements would be offset by increases in the number of people with private coverage or Medicaid.

Wichita’s Via Christi Health, the largest health care provider in the state, has absorbed nearly $25 million in Medicare reimbursement cuts since 2013, Korsmo said. Expanding Medicaid would generate nearly $14 million a year in additional revenues, he said.

Scott Taylor, chief executive of St. Catherine Hospital in Garden City, said many of the small critical access hospitals that refer patients to his facility are struggling.

“There are a large number of critical access hospitals in western Kansas, many of which already require a county subsidy to keep their doors open,” Taylor said. “They could benefit immensely from an expansion of Medicaid.” The hospital association estimates that Kansas has lost more than $370 million in additional federal funding since January 2014 due to its decision not to expand Medicaid.

The ACA promises to cover 100 percent of states’ expansion costs for the first three years. In 2017, the federal share of expansion costs goes down gradually until 2020 when it reaches 90 percent, where the law says it will remain.

But Brownback and many Republican legislative leaders remain skeptical that promise will be kept.

“Looking down the road at the economic situation for the federal government as well as the state, we have to consider the implications of what could happen,” said House Speaker Pro-Tem Peggy Mast, an Emporia Republican.

– KHI News Service reporter Andy Marso contributed to this story.