The document discusses key issues related to health reform implementation for safety net health systems. It provides an overview of the National Association of Public Hospitals and Health Systems (NAPH), which advocates for safety net hospitals. The document outlines provisions of the Affordable Care Act related to coverage expansion, exchanges, provider payments, and innovation opportunities. It identifies challenges and questions for safety net health systems to consider regarding health reform implementation.

1. Health Reform:
Key Issues for Safety Net Health Systems
Claudine Swartz
National Association of Public Hospitals &
Health Systems
Assistant Vice President for Policy
July 2010
111
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2. Overview:
A little politics
A little detail
A lot of discussion
222

3. Who is the National Association of Public
Hospitals and Health Systems (NAPH)?
For 27 years has advocated for safety net hospitals and
health systems
NAPH…..
Represents 140 hospitals with shared mission – access to all
Effectively advocates at the federal level on issues of concern to
safety net hospital systems
Helps members effectively advocate
Conducts research and shares innovations on health system
change at member hospitals
Communicates value of safety net hospital systems to
policymakers and the public
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4. Care for the Uninsured
NAPH hospitals represent only 2 percent of the acute care hospitals in the
nation, but provide 20% of the uncompensated hospital care.
Source: NAPH Hospital Characteristics Survey, FY 2007 443
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5. Gross Revenues by Payer:
NAPH Members
* Uninsured Revenues are attributed to patients that are considered Self Pay, Charity Care, or
covered by a State or Local Indigent Care Program.
Source: NAPH Hospital Characteristics Survey, 2008 55

6. The Politics of Health Reform
66

7. Landmark Statute
Two different bills combine to form new health reform
law:
Patient Protection and Affordable Care Act, H.R. 3590. Enacted March
23
Health Care and Education Act, H.R. 4872. Enacted March 30
Total cost: $930 billion
Reduces the federal deficit by $143 billion
Provides coverage to 94% of legal US residents – about
32 million individuals
Referred to as “health insurance reform” but 7 out of 10
titles focus on delivery system changes
77

8. Now the Work Begins....Implementation
“The Secretary Shall”....over 1,000 times
Health & Human Services and IRS must implement
Implementation cost estimate: $10-20 billion
40 significant regulations....many others likely.
Additionally:
Guidance
Request for proposals
Creation of commissions, panels, boards
And, that’s just the feds...don’t forget about:
States
Healthcare providers
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9. Coverage Expansion
Immediate changes:
Creates temporary national high-risk pool for those with pre-existing
conditions: the Pre-existing Condition Health Plan
Immediately offers states the Medicaid option to cover childless adults
up to 133% FPL (at current FMAP)
Insurance reforms
Dependents 26 & under may stay on parent’s plan
No lifetime limits on coverage
No pre-existing condition exclusions for children
Reinsurance fund for 55-64 year old retiree health benefits
No rescissions except in case of fraud
Rate review where necessary
EARLY WINS =
POINTS for ADMINISTRATION & DEMOCRATIC CONGRESS 98

10. Coverage Expansion
Beyond 2010:
Guarantee issue (2014)
Medicaid expansion to non-elderly population with incomes at or below
133% FPL with enhanced FMAP (2014)
✦ 10 million in 2014; 16 million by 2019
✦ Helps states pay for new Medicaid costs. Increases FMAP for newly-
eligible Medicaid patients.
Premium credits and cost sharing subsides for those between 133-
400% FPL (2014)
All legal residents must have coverage or face penalty (2014)
Undocumented immigrants not covered
■ Basic health plan option for states: create a standard plan in lieu of
premium and cost sharing subsidies for those 133-200% FPL
■ Reauthorizes CHIP until 2015
10
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11. Exchanges
■ Requires state-based, or regional, exchanges
■ Each state required to have an American Health Benefit
Exchange and SHOP Exchange (can be operated as one)
Initially for individuals and small employers (under 100)
In 2017, open to other businesses
■ Exchanges must offer:
Private “qualified health plans”: federal criteria, state certified
Co-op plans
At least 2 multi-state plans negotiated by the federal gov’t; one must be non-
profit.
■ Plans must:
Contract with “essential community providers” 10
Provide an essential benefit package (defined by feds)
Of the defined benefit categories (bronze, silver, gold, platinum), must offer
silver & gold in individual & small group mkts and exchanges.

12. Coverage Expansion
Key Questions to Consider for Safety Net Health
Systems:
How much will Medicaid expand?
797,000 estimated statewide
Will Illinois expand Medicaid early?
Unlikely? Connecticut only at this point
How many patients will gain coverage via Exchange?
1 million Illinois residents will receive premium assistance
What does the $196 million in state high risk pool funding
mean for Illinois?
How will the safety net facilitate enrollment?
Increase or decrease in patients?
MA safety net patients increased

13. Provider payment changes
Reduces Medicaid and Medicare DSH payments by $14 billion and $22
billion, respectively (2014-2019); allows targeted payments
Reduces the annual market basket increase for Medicare inpatient and
outpatient hospital services beginning in 2014
■ Establishes the Independent Payment Advisory Board (IPAB) to reduce
Medicare cost growth, improve care. Institute of Medicine study on
geographic variation.
Increases Medicaid payments for primary care physicians to Medicare
levels (2013 and 2014).
Increase Medicare payments to physicians and other providers for
primary care and general surgery services (10% 2011-2015).
Quality + Cost Containment = Value
Implements budget neutral value-based purchasing program
Reduces hospital payments to account for preventable readmissions for
certain conditions
Adjusts hospital payments for certain hospital-acquired conditions
No major Medicaid Reform. Stay tuned with “MACPAC.” 13
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14. Provider payment changes
Key Questions to Consider for Safety Net Health
Systems:
Financing implications:
Uninsured reduction
Medicaid expansion
Exchange enrollees
Medicaid payments
Gradual reduction in DSH
Lingering uninsured and/or undocumented patients?
How will Medicaid and Medicare DSH be reduced?
Are funds well targeted in your state?
What is the likely redistribution of need and dollars going to be?
Physicians eligible for primary care increases?
Value based rewards or penalties?
GME implications?

15. Innovation & Funding Opportunities
Well over 20 titles establish demonstrations and/or pilots
Funding is wildcard -- $105 billion worth of programs require
Congressional appropriations
Key opportunities include (but not limited to):
Community-Based Collaborative Care Networks
CMS Center for Medicare & Medicaid Innovation
Medicaid Global Payment System demonstration
Demonstration to enhance uninsured access
Medicare & Medicaid payment bundling
Grants to states for community health teams
Medicare & Medicaid Pediatric ACOs
New Medicaid state plan option to designate health homes for
Medicaid patients with chronic conditions
Funding for primary care residency programs
Trauma funding

16. Innovation & Funding Opportunities
Key Questions to Consider for Safety Net
Health Systems:
Which delivery system reforms and/or funding opps make the
most sense in your community?
First, reflect internally on strengths and weaknesses
Which opportunities complement one another and/or fit into overall
community strategy?
Are the opportunities funded?
What is the opportunity cost -- staffing, resources?
Collaboration with the state
“Bridge to coverage” initiatives?

17. Administration Activity
Staffing up, Staffing Changes
Most implementation requires HHS guidance
Driven by timeline
Routinely check: www.healthcare.gov

18. Department of Health & Human
Services Organization
Established Office of Consumer Information &
Insurance Oversight
Jay Angoff, Director
Includes:
Office of Oversight
Office of Insurance Programs
Office of Consumer Support
Office of Health Insurance Exchanges

19. CMS Reorganization
“…in order for CMS to Center for Medicare and Donald Berwick, MD
Medicaid Services
most effectively meet Recess Appointment
today’s requirements
and strategically
position itself for the
future…”
Principal Deputy
Administrator
Marilyn Tavenner
Center for Medicaid, Center for Strategic
Center for Program Planning
Center for Medicare CHIP, and Survey &
Integrity
Jonathan Blum Certification (Innovation Center)
Peter Budetti
Cynthia Mann Anthony Rodgers

20. Administration:
Implementation Challenges
The sheer magnitude of the task: Commissions, regulations,
state collaboration, payment changes, innovations, etc!
November elections
Ongoing Congressional appropriations
Lawsuits
Competing Priorities
Public Understanding
Unresolved Issues:
FMAP, Doc Fix, 340B
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21. Safety Net Health Systems: Implementation
opportunities
Additional insured patients
Innovation and funding opportunities
MACPAC – longer term opportunity to address Medicaid
underpayments
Community health center funding
Leveraging:
integrated delivery systems
safety net health plans (if available)
community clinics, FQHCs, and community based care
ability to provide specialized care to unique populations
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22. Safety Net Health Systems: Implementation
challenges
Medicaid rates
FMAP ($750 million immediately at risk in IL)
Long-term rates
Unknown Exchange Plan rates
Will safety net providers be ready for 16 million new
Medicaid patients?
Capacity
Ongoing Medicaid underpayments
Reduced DSH payments
Impact of state budgets
Caring for 23 million remaining uninsured including
undocumented immigrants
Staying ahead of delivery system reforms when Medicare,
not Medicaid, is focus 22
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23. Safety Net Health Systems:
Preparing for Reform
Customer service & patient satisfaction
Continue to engage in quality improvement activities
Partnerships: Develop coordinated and integrated multi-
provider networks
Continue to develop and emphasize chronic disease
management programs, “wrap-around” services, cultural
competency
Focus on coordinated care in order to prepare for new
payment models based on medical home, bundling, and
ACOs
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24. Resources
NAPH Weekly Podcast:
“This Week in Health Reform”
www.naph.org: Health Reform Implementation Section
The latest Administration activity
Summary of Key Issues
Implementation Timeline
Funding Opportunity Chart
NAPH’s Newsline – weekly e-newsletter
ALL NAPH staff, including:
Claudine Swartz: cswartz@naph.org & 202-585-0103