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Impact of Insurance Expansion on Hospital Uncompensated Costs in 2014

See update at https://aharesourcecenter.wordpress.com/2015/03/23/aca-insurance-expansion-and-uncompensated-hospital-care-costs/

A new federal report examines the impact so far of health reform’s expanded health care coverage on uncompensated costs incurred by hospitals. With an estimated 8 million increase in the number of people covered by Medicaid and a 10.3 million decrease in the uninsured population, hospitals may lower their overall uncompensated costs by $5.7 billion (16%) this year.

Other key findings include:

  • Volumes of uninsured/self-pay hospital admissions and emergency visits have fallen significantly, especially in Medicaid expansion states.
  • The number of hospital admissions covered by Medicaid have risen, but mostly in Medicaid expansion states.

Source: DeLeire T and others. Impact of insurance expansion on hospital uncompensated costs in 2014. ASPE Issue Brief [US Dept. of Health and Human Services, Office of the Assistant Secretary for Planningg and Evaluation], Sept. 24, 2014. http://aspe.hhs.gov/health/reports/2014/UncompensatedCare/ib_UncompensatedCare.pdf

Related resource:Uncompensated hospital care cost fact sheet. American Hospital Association, Jan. 2014. http://www.aha.org/content/14/14uncompensatedcare.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Another Update: Can Hospitals Pay Patient Health Insurance Premiums?

Here’s what’s new since the last update on whether or not a hospital can pay the health insurance premium for a patient:

Where federal regulators stand on third party payments of patient health insurance premiums has not been clearcut. Based on a letter from the Centers for Medicare & Medicaid Services on May 21, the American Hospital Association has advised members that “payments from private, not-for-profit foundations to qualified health plans (QHPs) on behalf of individuals who enroll in coverage via the Health Insurance Marketplaces are not prohibited.” However, AHA also points out there is no federal mandate that qualified health plans must accept premium subsidies from hospitals.

The insurance industry represented by America’s Health Insurance Plans wants premium support payments to be made only through independent foundations and not directly from hospitals or hospital-affiliated foundations. Insurers fear third-party premium payments for already sick patients could unfavorably skew the insurance pool and drive up costs.

Nonetheless, some hospitals are moving ahead to assist patients. The South Florida Hospital and Healthcare Association and the Healthcare Association of New York State are each looking at coordinating third party premium support options for their members.

Sources:

HHS confirms payments from foundations to QHPs are not prohibited. American Hospital Association Legal Advisory, June 5, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140605-legal-adv.pdf  [AHA members only]

Sebelius K. Letter to R. Umbdenstock, American Hospital Association, re: qualified health plan issuers accepting premium and cost-sharing payments from third parties. Secretary of Health and Human Services, May 21, 2014. http://www.aha.org/content/14/140521-sebelius-umbdenstock.pdf

Appleby J. Hospitals seek to help consumers with Obamacare premiums. Kaiser Health News, Aug. 14, 2014. http://www.kaiserhealthnews.org/Stories/2014/August/14/Hospitals–Seek-To-Help-Consumers-With-Obamacare-Premiums.aspx

Related sources:

Office of Inspector General, Dept. of Health and Human Services. Supplementary special advisory bulletin: independent charity patient assistance programs. Federal Register 79(104):31120, May 30, 2014. http://t.co/xyGQ6O86yt

Clark C. Hospitals begin subsidizing exchange premiums via third parties. HealthLeaders Media, May 28, 2014. http://www.healthleadersmedia.com/page-1/HEP-304974/Hospitals-Begin-Subsidizing-Exchange-Premiums-via-Third-Parties

Caramenico A. Sebelius OKs premium payments from third parties. FierceHealthPayer, May 23, 2014. http://www.fiercehealthpayer.com/story/sebelius-oks-premium-payments-third-parties/2014-05-23

Jost T. Implementing health reform: third-party payments and reference pricing. Health Affairs Blog, May 22, 2014. http://healthaffairs.org/blog/2014/05/22/implementing-health-reform-third-party-payments-and-reference-pricing/

Carlson J. HHS warns that premium-assistance charities must be independent. Modern Healthcare, May 22, 2014.  http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCIQFjAA&url=http%3A%2F%2Fwww.modernhealthcare.com%2Farticle%2F20140522%2FNEWS%2F305229964&ei=S26bU9i1HM6dyASf-ILIDA&usg=AFQjCNHyKUVKd2VEJYQmQWzExf3jDuwlNQ&bvm=bv.68911936,d.aWw

Miller JS. Letter to Marilyn Tavenner, Centers for Medicare & Medicaid Services, re: Patient Protection and Affordable Care Act; third party payment of qualified health plan premiums – (CMS-9943-IFC) AHIP comments. America’s Health Insurance Plans, May 13, 2014. http://www.regulations.gov/contentStreamer?objectId=09000064816f7ae5&disposition=attachment&contentType=pdf

CMS interim final rule: premium subsidies. American Hospital Association Legal Advisory, April 8, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140408-legal-adv.pdf  [AHA members only]

Centers for Medicare and Medicaid Services. Patient protection and affordable care act: third party payment of qualified health plan premiums; interim final rule with comment period. Federal Register 79(53):15240, March 19, 2014. https://www.federalregister.gov/articles/2014/03/19/2014-06031/patient-protection-and-affordable-care-act-third-party-payment-of-qualified-health-plan-premiums

HHS issues interim final rule on premium subsidies; continues to discourage insurers from accepting premium support from hospitals. American Hospital Association Special Bulletin, March 14, 2014. http://www.aha.org/advocacy-issues/bulletin/2014/140314-bulletin.shtml [AHA members only]

Centers for Medicare and Medicaid Services. Third party payments of premiums for qualified health plans in the marketplaces. Feb. 7, 2014. http://www.aha.org/content/14/140604-aha-cms-faq.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Hospitals Reassess Charity for Patients Who Decline Health Coverage

A recent article published by both Kaiser Health News and the Washington Post discusses the issue of whether hospitals should offer charity care to patients who  have declined federally-mandated health insurance coverage. Southern New Hampshire Medical Center is one hospital that has indicated such patients will be ineligible for their charity care.

However, other hospitals have not made changes or are still reviewing their policies to ensure they’re compliant with the Affordable Care Act.  Two large hospital chains, Tenet and HCA, have no plans for policy changes at their facilities.

Even those with health insurance may need financial assistance because of high deductibles and cost-sharing.

Sources:

Appleby J. Hospitals reconsider charity for patients who decline health coverage. Kaiser Health News, Aug. 18, 2014. http://www.kaiserhealthnews.org/Stories/2014/August/18/Hospitals-Reconsider-Charity-For-Patients-Who-Decline-Health-Coverage.aspx

Appleby J. Hospitals reassess charity as Obamacare options become available. Washington Post, Aug. 16, 2014. http://www.washingtonpost.com/national/health-science/hospitals-reassess-charity-as-obamacare-options-become-available/2014/08/16/5ab954a0-255f-11e4-86ca-6f03cbd15c1a_story.html

Charitable care. Southern New Hampshire Health System, accessed Aug. 18, 2014 at http://www.snhhs.org/Charitable-Care

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Health Insurance Coverage under the ACA as of June 2014

How has the Affordable Care Act changed insurance coverage for the uninsured? Urban Institute researchers have analyzed changes in the number of uninsured between September 2013 — just before open enrollment in the ACA’s Marketplace started on October 1 — and June 2014. Here’s what they found:

  • The uninsured population dropped by 8 million people, decreasing the American population percentage that’s uninsured from 17.9% to 13.9%.
  • Most of the gain in coverage was among the low and middle income adults targeted by the ACA and in the states that implemented Medicaid expansion.
  • All demographic groups benefited but the biggest gains were for the young, male, and minority adults that typically have had high uninsurance rates.

Who are the remaining uninsured? They were more likely to be low income or in states that did not expand Medicaid coverage. While most had heard about the Marketplaces and the individual mandate, fewer (38%) had knowledge of available subsidies. Financial reasons was the most frequent explanation given for lack of coverage.

Sources:

Long SK and others. Taking stock at mid-year: health insurance coverage under the ACA as of June 2014. Health Reform Monitoring Survey, Urban Institute Health Policy Center, July 29, 2014. http://hrms.urban.org/briefs/taking-stock-at-mid-year.pdf

Shartzer A and others. Who are the remaining uninsured as of June 2014. Health Reform Monitoring Survey, Urban Institute Health Policy Center, July 29, 2014. http://hrms.urban.org/briefs/who-are-the-remaining-uninsured-as-of-june-2014.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Uncompensated Care for Uninsured in 2013: a Detailed Examination

A new Urban Institute report prepared for the Kaiser Commission on Medicaid and the Uninsured takes a close look at uncompensated care for the uninsured. It examines the cost, the service sites providing uncompensated care, the sources of funding, and cost shifting for unfunded costs of compensated care. Here are the highlights:

  • A patient uninsured the entire year incurred lower medical expenses on average — $2,443 compared to an insured patient’s average annual expense of $4,876.
  • In 2013 the cost of uncompensated care provided to the uninsured was $84.9 billion.
  • To partially offset provider costs for uncompensated care, the federal government paid providers $32.8 billion in 2013, state and local government paid $19.8 billion, and the private sector contributed $0.7 billion — an overall total of $53.3 billion.
  • Hospitals provided 60% of the uncompensated care, while community based clinics and health centers provided 26% and office-based physicians 14%.
  • The authors estimate uncompensated care cost-shifting to private insurers may be in the 2.3%-4.6% range.

While the new health law is designed to reduce both the number of uninsured and the level of funding for uncompensated care, it is still unclear what the outcome will be for providers and uncompensated care costs.

Source: Couglin TA and others, Urban Institute. Uncompensated care for uninsured in 2013: a detailed examination. Kaiser Commission on Medicaid and the Uninsured. May 30. 2014. http://kff.org/uninsured/report/uncompensated-care-for-the-uninsured-in-2013-a-detailed-examination/

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Impact of Medicaid Expansion on Hospital Volumes and Charity Care

UPDATE: See 2nd quarter 2014 report at http://www.cha.com/Documents/CHA-Study/FINAL-CHA-Medicaid-Expansion-Study-Q2-Sept-2014.aspx

A preliminary study from the Colorado Hospital Association [CHA] has found the proportion of Medicaid patient volume grew substantially, while the proportion of self-pay and overall charity care significantly declined in the states that expanded Medicaid. Similar changes did not occur in the states without Medicaid expansion.

The study analyzed first quarter 2014 data from 465 hospitals from 30 states — 15 states with Medicaid expansion and 15 without — and compared it with first quarter 2013.

CHA found a 30% drop from one year ago in average charity care per hospital in expansion states, falling from $2.8 million to 1.9 million. The average charity care amount per hospital in non-expansion states grew from $3.8 million to $4.2 million during the same period, a change within normal variations.

This early data shows noteworthy changes due to Medicaid expansion, but further monitoring is needed to see if this trend will continue.

Source: Center for Health Information and Data Analytics. Impact of Medicaid expansion on hospital volumes. Colorado Hospital Association, June 2014. http://www.cha.com/Documents/Press-Releases/CHA-Medicaid-Expansion-Study-June-2014.aspx

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

EMERGENCY DEPARTMENTS: Do uninsured adults who become eligible for Medicaid increase ED use?

In 2008, the state of Oregon expanded its Medicaid program by allowing a limited number of uninsured adults to enter a lottery to determine eligibility status.  This study of lottery participants over an 18-month period after the lottery allowed a comparison of the emergency department use of those with newly-acquired Medicaid benefits compared to those who remained uninsured.  The Medicaid coverage was associated with a 40 percent increase in emergency department use.

This study was described in a news story in the Portland Business Journal, which adds interesting insight based on more current data on emergency department use that has been released by the state.  These data are based on people who are enrolled in the state’s Coordinated Care Organizations–and show a decline in ED visits for these Medicaid recipients.

Sources:

Taubman, S.L., Allen, H.L., and others.  Medicaid increases emergency-department use: evidence from Oregon’s health insurance experiment.  Science, Jan. 2, 2014.  Click here for access to publisher’s website where you can buy a copy of the full study: http://www.sciencemag.org/content/early/2014/01/02/science.1246183.abstract?sid=390b14c0-d76f-49b1-97eb-9633dd320f64

Hayes, E.  Does Medicaid lead to lower or higher ER usage? Conflicting evidence.  Portland Business Journal, Jan. 3, 2014.  Click here for full text: http://www.bizjournals.com/portland/blog/health-care-inc/2014/01/does-medicaid-lead-to-lower-or-higher.html?s=print  Posted by AHA Resource Center (312) 422-2050, rc@aha.org