Policy News

Policy News

As the COVID pandemic continues, hospitals are using their voice to ask Congress for support in taking care of patients in their communities that need them, while also protecting the health care workforce.

In the coming weeks, Congress will consider providing additional resources to states and health care providers to address the COVID pandemic.  The District Hospitals are working to ensure that public hospitals, and the patients they serve, receive the resources necessary to continue to provide necessary medical care, often in rural areas of the state, to all patients whether they have tested positive for COVID or simply need to access health care for procedures or preventive care.  Below are our top priorities for any stimulus or COVID package that moves through Congress.

5 Health Care Issues the District Hospitals are Asking Congress for Help On

The District Hospitals are working to prevent the implementation of the Medicaid Fiscal Accountability Rule (MFAR).  The MFAR rule, proposed by CMS on November 18, 2019, severely restricts how states may pay for their Medicaid programs, and would upend California’s health care safety net. This rule would drastically reduce funding for the Medi-Cal program in California and would cause DMPHs to make difficult decisions about their ability to continue to provide some or all services to their communities. Without Congress’ critical action to prevent CMS from finalizing MFAR, the viability of health care safety net providers, who are now being called upon to meet a national challenge and are stretched to their absolute limit, will be undermined. If implemented, billions of Medicaid dollars will be taken from California and other states. Such cuts wouldn’t be sustainable and significant cuts to programs will likely be the only option. As such, implementation of this rule would have a significant negative impact on the state’s ability to provide care to all Californians.

As part of an effort to shore up California’s safety-net, District Hospitals are working towards inclusion of language in relief packages that allows for the extension of Medicaid Section 1115 Waivers under current rules. California’s Section 1115 Medicaid Waiver, which would provide California with federal funding through programs that will shift the focus away from hospital-based and inpatient care, towards outpatient, primary and preventative care, have been critically successful. The state of California and Medicaid providers would like to extend this program.

District Hospitals are working with colleagues in the hospital industry in California to ask for equitable distribution of funds from the Public Health and Social Service Emergency Fund, and for additional funds to be included for hospitals in future packages. Congress acted swiftly to establish and fund the Public Health and Social Services Emergency Fund in the CARES Act in March, and we are grateful. However, the first few distributions have been based on formulas that do not offer appropriate recognition of the investments California has made or the lost revenue incurred as a result of the pandemic.  California health care providers rank 46th in the nation for per capita allocation of the funds distributed so far.  We urge future distributions, as Congress debates adding more funding to this critical fund, to offer formulas that provide a more equitable distribution that reflects lost revenue and costs associated with this pandemic to help ensure that California gets its fair share. Additionally, there are policy changes that Congress could make to the Provider Fund that will also help shore up hospitals. For example, the funding designated for Rural Health Clinics (RHCs) does not allow a hospital that isn’t classified as rural or critical access under federal definitions to access the funds designated for RHCs. However, RHCS can be licensed to hospitals that federally don’t meet the definition of rural. Without clarification to this language, hospitals that operate RHCs, the intent of this legislative language, will continue to be left out from receiving access to these funds. 

As the health care safety net may be nearing a breaking point, now is not the time to allow planned health care cuts to move forward. This would undermine the viability of these front-line providers that are being called upon to meet a national challenge and are stretched to their absolute limit.  Therefore, we are advocating for the elimination of the Medicaid disproportionate share hospital (DSH) cuts.  California’s district and municipal public hospitals will see a reduction in Medicaid payments of $20 million, key funding for these often small and rural providers, if these cuts go into effect.

The health care industry has been united in urging the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) to exercise existing authorities to waive interest or substantially reduce the interest rate on any balance owed on Medicare accelerated/advanced payments made under the CARES Act. The program applies the prevailing rate set by the Treasury Department, which is currently set at 10.25%. This high interest rate will put DMPHs at further financial risk while they are already vulnerable. Together, HHS and CMS have mechanisms available to waive or reduce interest on accelerated/advanced payments owed and none requires rulemaking. However, to date, neither HHS or CMS has used this authority to address this issue. This critical program was halted April 26th after CMS distributed more than $100 billion in advance payments to eligible providers. However, these critical funds will have to be repaid by hospitals and other providers, and the high interest rate issue must be addressed. District Hospitals is asking Congress to decrease the interest rate to 1% and to allow up to two years before repayment must occur.


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