RURAL HOSPITALS IN KENTUCKY
The Louisville Courier-Journal has reported, along with others, serious financial issues facing hospitals in Kentucky and two other states. The report claims that over half of Kentucky’s rural facilities are below nationwide averages for financial strength, and a third were considered in dire financial straits.
These reports were based upon 2012 financial reports, and it will be interesting to watch whether Kentucky’s action to expand Medicaid eligibility will help to revive Kentucky’s rural hospitals.
If the Medicaid expansion helps, it will not come too soon. The only hospital in Fulton County, Kentucky recently closed, and if reports are to be believed, another 15 rural Kentucky hospitals face imminent closure.
QUICK ENROLLMENT IN INDIANA’S EXPANDED MEDICAID PROGRAM
In late January, Indiana announced that federal officials had approved the Indiana Medicaid Expansion Program called HIP 2.0 effective February 1st. The program appears to be vitally needed since approximately 350,000 Hoosiers were believed to be eligible, and enrollment, only open since February 1st, appears to be already at 300,000. For those who recall the details of HIP 2.0, the Federal Government is paying 100% of the healthcare costs associated with this expansion, estimated at $1.17B in Indiana for FY 2015 and $2.27B for FY 2016. By 2021, Indiana must fund 10% of the costs of the program. The state funding for the program, when required, is expected to be paid from a state tobacco tax and a hospital assessment fee. The details of the hospital assessment fee are still unknown.
SGR REPEAL HALF WAY DONE, BUT QUESTIONS REMAIN
The United States Senate’s decision to wait until after spring break vacation to vote on a SGR fix has not been well received by physicians or hospitals. This means that the 21% physician payment cut will take effect on April 1, although the Senate claims that if they pass the SGR fix by April 15th, there will be no delay or reduction in physician payments.
The passed House Bill contains a repeal of the SGR formula, and provides for a “guaranteed” 0.5% annual increase in Medicare reimbursements through 2019, at which time the “guaranteed” increase ceases, and Medicare reimbursement is then scheduled to be flat through 2025. The Bill also contains a consolidation of PQRS and other meaningful use and modifier programs into a new program known as “Merit-Based Incentive System.”
To partially fund this SGR fix, the Bill raises Medicare premiums for higher income tax payors. The children’s health insurance program is extended for two years also.
Several issues remain with this SGR fix, the #1 issue physicians will quickly face is even more pressure to receive reimbursement from a “value based” payment system, and a dimmer future for fee for service. Also, while most physicians appreciate the possibility that the annual SGR cut game will end, the one-half of 1% of guaranteed annual raises for a few years is not likely to come close to returning Medicare rates to an acceptable level. At best, the SGR fix looks like less pain as opposed to a real solution.
ER OUT-OF-NETWORK PROBLEMS
Many people who have health insurance and whose local hospitals are in-network for their insurance go to an ER in that in-network hospital, and then are shocked to be billed out-of-network fees for the ER at their in-network hospital. How can this happen?
This issue is cropping up around the country as hospitals “subcontract” their emergency rooms to specialized ER providers. Unfortunately, some hospitals do not require their subcontract ER doctors and providers to be in-network, and often do not let their ER customers know of this until after the fact when the patients receive a “balance billing”. The balance billing is the difference between the providers charge and the amount allowed by the insurer.
United Healthcare and others are engaged in a battle with the hospitals and subcontracted ER physicians over this issue. Unfortunately, while the battle unfolds, patients are the victims of the battle. United Healthcare and other hospitals who have previously absorbed the difference between the network rates and the subcontracted ER hire rates have had enough, and United Healthcare and others are now simply refusing to pay the out-of-network rates as they claim the large ER subcontractors are purposefully seeking out-of-network strategies to gain higher reimbursement rates, sometimes approaching eight to ten times what in-network emergency room physicians charge for the same service.
What can you do if you have a balance bill due to one of these disputes? Complain, complain, and complain. Complain to Indiana’s insurance commissioner (even with the insurance commissioner’s lackluster record for Indiana consumers and Medicaid providers), complain to the hospital, complain to the ER group and complain to your legislator. It seems dramatically unfair that persons who go to their in-network hospitals at a time when minutes are of the essence to seek emergency care, that a hospital subcontract arrangement should be able to cause those seeking emergency care to pay dramatically more than they would otherwise.
When talking to the insurance commissioner or your legislator, remind them that half of the United States has already banned emergency room out-of-network balance billing for both Medicaid managed care recipients and private insurance customers.
This newsletter is edited by Paul Wallace of Jones ∙ Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years. Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues. Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or email@example.com.