United States: The Health Care Minibus

Last Updated: April 21 2017
Article by Mintz Levin

Welcome to Spring Break! That time of the year where college kids head to a beach somewhere, families pack up for some tourist trap to spend lots of money, and Congress gets out of DC and goes back home.  This is also a time to consider where we are and where we are heading in terms of health care policy.  We will continue to hear of potential policies aiming to unify Republicans on health care reform, but until we see substantive policy changes that get members to change their votes from the American Health Care Act, this is all talk.  However, there is a health care minibus coming.  The "minibus" refers to a handful of policy provisions tied together in one piece of legislation.  This minibus will carry a number of provisions into law.  How many riders will be onboard the minibus remains to be seen.

The health care minibus includes all the health care extenders left behind from the Medicare Access and CHIP Reauthorization Act (MACRA). Health care extenders refer to a number of temporary policies that need reauthorization or annual appropriations,  including but not limited to, CHIP, the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program, community health centers funding, therapy caps, special needs plans (SNPs), and disproportionate share hospital (DSH) payment reductions.  Because of the breadth of these issues, a number of Congressional Committees will be involved in the process.  As a result, actions on any of these items open the door to numerous policy areas for consideration.  These items also come with a price tag which is a concern for all stakeholders who may find themselves defending provisions they care about that might be used as pay-fors.  We can expect discussions on these policies to percolate mid-summer due to the need for states to have certainty around CHIP funding prior to September 30, 2017.

We will have a series of blog posts focusing on extenders riding on the minibus. But to get you started, below, we provide an overview of some of the key minibus extenders and their funding or authorization expirations.

  • CHIP: Federal CHIP funds are allotted to states annually based on each state's recent CHIP spending increased by a growth factor. As currently structured, CHIP is a block grant and needs federal allotments each year. CHIP was last funded by MACRA, which provided federal funding to the program for FY2016 and FY2017 ($19.3 billion and $20.4 billion, respectively). The Medicaid and CHIP Payment and Access Commission (MACPAC) reports that Arizona, California, DC, Minnesota and North Carolina will run out of CHIP funding by December 2017 if Congress does not reauthorize the money for the program. Additionally, more than half of states are projected to exhaust federal CHIP funds by March 2018 without reauthorization. (CHIP's funding structure and policies are complex, so we will provide a detailed examination of CHIP and the future of children's coverage in our next blog.)
  • Maternal, Infant, and Early Childhood Home Visiting (MIECHV): The MIECHV program provides resources and supports pregnant women, families and at-risk parents of children under the age of five. The program is a federal, state, and community partnership that aims to improve the health of at-risk children through evidence-based home visiting programs. This program is administered by the Health Resources and Services Administration (HRSA) and the Administration for Children and Families (ACF). MACRA extended the program's funding through FY 2017 (with $372.4 million in appropriations for FY 2017). For the program to continue, additional funding is needed.
  • Community Health Centers Fund: MACRA extended the Community Health Center Fund for FY 2016 and FY 2017. The Community Health Centers Fund provides funding to health centers under the Public Health Service Act, the National Health Service Corps (NHSC), and the teaching health center program. For FY 2016 and FY 2017, MACRA provided $3.6 billion for health centers, $310 million for the NHSC, and $60 million teaching health centers for each year.
  • Therapy caps: Under the Balanced Budget Act (BBA) of 1997 Congress placed an annual coverage cap on rehabilitation services under Medicare. However, since enacting BBA, Congress has never allowed therapy caps to be enacted and has continually extended the therapy cap extension. Most recently, MACRA extended the therapy cap exception through December 31, 2017, and required the Secretary of HHS to implement a new medical review process for outpatient therapy services. If Congress does not act by December 31, 2017, these caps will be imposed and annual limitations on per-beneficiary incurred expenses for outpatient therapy services, such as physical therapy and occupation therapy, would be applied to Medicare beneficiaries.
  • Special Needs Plans (SNPs): SNPs are a type of Medicare Advantage plan that provide targeted services and coverage to individuals with special needs. There are three types of SNPs: Chronic Condition (C-SNPs), Institutional SNP (I-SNP), and Dual Eligible SNP (D-SNP). MACRA extended SNP authority until December 31, 2018, but SNPs need continued reauthorization to operate past that date. On April 6, 2017, the Senate Finance Committee reintroduced the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, S. 870, which would permanently authorize I-SNP, D-SNP and C-SNP plans, if certain requirements are met.
  • Disproportionate Share Hospital (DSH) reductions: The Affordable Care Act (ACA) reduced federal DSH allotments to account for decreases in uncompensated care anticipated as a result of Medicaid expansion. However, not all states have expanded Medicaid. Since the ACA, a number of laws have amended the ACA to delay the Medicaid DSH reductions to prevent funding cuts to hospitals that serve a large proportion of uninsured persons and Medicaid beneficiaries. Most recently MACRA delayed DSH reductions by one year, by eliminating the FY 2017 DSH reductions. However, without additional delays DSH cuts will begin in FY 2018 and extend through FY 2025.

What program will be driving the minibus is yet to be determined and we will see how many riders board the bus as it travels on the road to becoming law. Time will tell . . .

Our next post on the minibus will focus on CHIP and the future of children's coverage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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