NACHC Spring Update 2012:
Trough of the Wave?
Kaitlin M. McColgan, MPH
Director of Federal Affairs
National Association of Community
Health Centers
Annual Community Health Institute
May 9-11, 2012
Resort & Conference Center of Hyannis
Hyannis, MA
NACHC Spring Update 2012:
Trough of the Wave?
Presentation to:
Massachusetts League of Community Health Centers
2012 Community Health Institute
Presented by:
Kaitlin M. McColgan
Director of Federal Affairs
National Association of Community Health Centers
May 15, 2012
Today’s Agenda
• Federal discretionary health budget
landscape
• FY2012 Health Center funding outcome and
FY2013 budget and appropriations status
• Regulatory Snapshot
• Supreme Court
• Crystal ball
The NACHC Mission
To promote the provision of high quality,
comprehensive and affordable health care that is
coordinated, culturally and linguistically competent,
and community directed for all medically
underserved people.
THE DISCRETIONARY
HEALTH BUDGET
LANDSCAPE
Discretionary Funding Environment
• Deficit reduction is a major focus
• Congress is under increasing pressure
to reduce discretionary spending
• Discretionary budgets are getting
smaller – discretionary spending caps
have been written into law
Health Discretionary Funding Trends
• President’s initial 2012 Budget request for
Labor-HHS totaled $180 billion
• Total Labor-HHS discretionary spending level
for 2012 was $156.3 billion (compared to
$157.4 billion for 2011)
• However, Labor-HHS Subcommittee’s
Program Level was $163.8 billion, as result of
$6.7 billion Change in Mandatory Program
funding
The Budget Control Act of 2011
• Two-phase debt ceiling increase:
–Phase 1: $900 billion through end of 2011
–Phase 2: $1.2-$1.5 trillion through November 2012
• Increases contingent upon offsets:
–Phase 1 offset: discretionary caps over next decade
• FY 2012 capped at $1.043 trillion
• FY 2013 total is $1.047 trillion
–Phase 2 offset: sequester takes effect January 2013
• Across the board spending cuts of 8 percent, $984 billion cut over 10
years, or $109 billion annually
• Cuts equally divided between defense and non-defense
• Applied proportionately to discretionary/direct spending
• Health Center discretionary cuts under sequestration are capped
at 2% in FY2013, with no special protections after FY2013
The President’s FY2013 HHS Budget Proposal
• Total HHS Outlays (overall increase)
–FY2013: $941B
–Change from FY2012: +$69B
• Mandatory Funding (overall increase)
–FY2013: $860B
–Change from FY2012: +$73B
• Discretionary Funding (overall decrease)
–FY2013: $77B
–Change from FY2012: -$218M
–Adheres to the discretionary spending caps adopted in
the BCA
Congressman Ryan’s Proposed 2013 Budget Plan
• Total federal spending would fall to 16 percent of GDP by
2050 (currently about 23 percent; historically around 20
percent).
• Ryan’s budget path would shrink federal expenditures below
current levels for everything other than Social Security,
Medicare, Medicaid, and CHIP
–Reductions in these entitlement programs would also be
significant as compared to current projected levels
• Includes immediate, severe cuts in non-defense
discretionary programs over the next ten years:
–Cuts funding for these programs by nearly $1.2 trillion
below the BCA funding caps
–Funding would be $800 billion below non-defense
sequestration levels
HEALTH CENTER
FUNDING
Health Reform – Refresher
• The Affordable Care Act (ACA) provided $11
billion in dedicated funding for health center
operations and capital for FY 2011 – FY 2015.
–$9.5 billion to support health center operations.
–$1.5 billion for capital needs.
• Mandatory funding provided through the Health
Center Fund ends after FY2015.
Health Center Funding Under Current Law
Community Health Center Funding:
FY 2010 – FY 2016
4.00
3.50
$3.6B
3.00
$2.2B
2.50
$250M
ARRA
$1.5B
$1.0B
2.00
$1.2B
1.50
1.00
$2.19B
$1.58B
$1.58B
$1.58B
$1.58B
$1.58B
$1.58B
2011
2012
2013
2014
2015
2016
0.50
0.00
2010
Base Discretionary Appropriation
Mandatory Funding through the Affordable Care Act
FY2012 Appropriations Result
• The outcome of the FY2012 budget (a ~$200M
increase from FY2011):
–$1.58B in discretionary funding
–$1.2B available through the mandatory Health Center Fund
• FY2012 budget funds 220 new Health Centers (to be
announced)
–$150M for these new access points
• Additionally, it funds:
–~$15-20M in expansion of services
–~$5M to support the President’s HIV/AIDS strategy
–~$20M to support Health IT through Health Center
controlled networks
The President’s FY2013 CHC Budget Proposal
• The Administration’s proposed budget for FY2013
includes $3.1B for Health Centers (a $300M increase
from FY2012):
–$1.58B in discretionary funding
–$1.5B available through the mandatory Health Center Fund
• The Administration’s proposed policy approach
reflects an unnecessary slow-down of needed Health
Center expansion:
–Utilize $20M to fund 25 new Health Centers in FY2013
–Reserve remaining $280M to prevent future year shortfalls
in funding
NACHC FY2013 Funding Ask
• NACHC’s federal appropriations approach prioritizes
stability and growth
• Health Centers requested $3.1B in total programmatic
funding for FY2013 (a $300M increase)- same total as
the President, but:
–Establish a base discretionary Health Centers funding level
of $2.8B (equal to current program operations) from $1.58B
in discretionary funding plus $1.2B transferred from the
Health Center Fund
–Direct the remaining $300M increase to expand care to 2.5
million new patients who lack access to a health center
today
Where’s Congress?
• House Labor-HHS may put out draft bill- May,
June??
- could wait until after Supreme Court
- interest in protecting existing operations, but
given allocation (decrease of $7B), unlikely growth
• Senate- expect to see Labor-HHS bill first week in
June
- priority: growth now
- concerns over hold back AND transfer
Estimated Number of Total Health Center Patients
Under Health Reform*
(pre- FY2011 Reduction)
45
40
Patients in Millions
40.0
35
31.6
27.7
26.0 26.5
30
25
20
17.0
16.1
15.0
14.1
15
12.4 13.1
11.3
10
21.3
18.8
Health Reform
Implementation Begins
5
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sources: Data for federally-funded health centers only. FY00-09 are from HRSA’s Uniform Data System. FY10 -15 are NACHC projected estimates based on
new federal funding. NACHC estimates future health center patients as a function of new federal funding.
Note: Other factors are difficult to predict and include payer mix, growth in non-federal grant sources, and the costs of care, which may be related to new
patients having unmet health needs.
Regulatory
Snapshot
Just a little bit going on. . .
•
•
•
•
•
•
•
•
•
•
•
Exchange and Medicaid expansion rules
ACOs and Medicare Shared Savings Program
1115 waiver transparency
Medicaid outpatient drugs
New Medicare/Medicaid and CHIP requirements from the
ACA – new application fees
340B administrative dispute resolution process
CO-OPs
Aligning Medicare and Medicaid (duals issues)
Assuring access to Medicaid
Section 1332 innovation waivers
Medicare PPS development
Development of Medicare PPS
•Created in Section 10501 of the Affordable Care Act
• The Secretary shall develop a prospective payment
system for payment for Federally qualified health center
services furnished by Federally qualified health centers
under this title. Such system shall include a process for
appropriately describing the services furnished by Federally
qualified health centers and shall establish payment rates
for specific payment codes based on such appropriate
descriptions of services. Such system shall be established to
take into account the type, intensity, and duration of
services furnished by Federally qualified health centers.
Such system may include adjustments, including
geographic adjustments, determined appropriate by the
Secretary.
Development of Medicare PPS
• FQHCs began reporting Healthcare Common Procedure
Codes (HCPCS) January 2011
• NACHC met with CMS
• Contractor has been hired.
•Of critical importance:
- Leg. Language does not call for caps or screens- meaning
new system could accurately reflect costs; IF
-We code appropriately NOW during data collection phase.
Health Centers are not coding services- could seriously
imperil success of the new system.
Exchanges- Key Issues
• Governance
– Will consumers and providers be adequately represented?
• What will provider networks look like?
– Will QHPs contract with FQHCs?
– Fair payment for FQHC services
• Essential Health Benefits
– Will package include FQHC services?
• Eligibility determination and enrollment assistance
– Will health centers fill the role of Navigators?
• Preventing “churn” between exchange and other affordability programs
– How will the exchange interact with the state Medicaid agency and
other programs; plan benefit design; netw
Payments to FQHCs in the Exchanges- aka
Menendez amdt- Final Rule
• QHPs must pay FQHCs no less than what they would be
paid under Medicaid FQHC law 1902(bb) but a QHP
issuer and an FQHC can mutually agree upon payment
rates other than required under Medicaid PPS law as
long as these rates “are at least equal to the generally
applicable payment rates of the QHP issuer.”
• No contracting requirement.
• Silent on payment to FQHCs when a QHP enrollee
receives services from an FQHC that has not contracted
with the QHP.
Navigator Provisions in Final Rule
• Require expertise in the needs of underserved and
vulnerable populations and eligibility and enrollment
rules and procedures, and must meet any licensing
certification or other standards established by the State
or Exchange.
• Exchange must include entities from at least one of the
following caregivers for a navigator grant: includes
community and consumer-focused non-profit group;
trade, industry, and professional associations; licensed
agents and brokers, etc. 155.210(c).
And
everything
else. . .
The Supremes
Four Main Issues, Lots of Tea-Leaf Reading
• Timing
• Mandate
• Severability
• Medicaid
What if??
Looking ahead. . .
• Senate approps- early June
• Supreme Court- June TBD
• House Approps- June/July if at all
• Election
• Lame Duck-ageddon: debt limit increase; sequester undo-ing?;
Bush tax-cuts; host of expiring provisions; omnibus, etc.
• The reckoning- deficit reduction is coming.
NACHC Membership
• We need YOU
• Turbulent times, need everyone rowing the boat!
• Health Care not going away as national issue, we
need to keep holding our own.
Where You Can Find More Information
• Visit our improved, expanded web site…
– for more information on all issues,
– for the latest on federal & state policy
developments, including health reform,
–for the schedule of webcasts and trainings
on key health center management topics
–Latest research & data on health centers
• Read the Washington Update each week…
All Are available at www.nachc.org
Thank You!
Any
Questions?