Washington, D.C.—Hello, ProviderNation. Some days you’re the top dog; others, not so much. On Tuesday, provider advocates took their turn getting dogged. It began with the House Energy & Commerce Committee voting to take a bite out of provider taxes. It ended with the fine folks at MedPAC barking about cutting Medicare.
As is so often the case, the bite was worse than the bark: The House committee marked up legislation that denies Medicaid to mega-lottery winners and prisoners. But buried in the text, contentious bone that it was, was section 4, which rolls back the caps on provider taxes from 6 percent to 5.5 percent.
That was enough to get AHCA/NCAL alpha dog Clif Porter to release the hounds. Provider advocates charged the InterWeb (and the hearing room) in full howl.
‘A Broken System’
“Provider assessments are an ESSENTIAL part of … the funding picture,” Pennsylvania Health Care Association honcho Russ McDaid tweeted. “PA … rates still lag NF costs more than $25/day!”
To outsiders, it may seem strange that an offer to cut a profession’s taxes would lead to bared teeth, not wagging tails. But the provider taxes help raise states’ Medicaid payments because the feds are required to match state funds. Around 20 states have maxed out their tax rates, so a cut in the provider tax is a cut in Medicaid rates. And not a small one, either: Ohio, Pennsylvania, and Florida each stand to lose more than $1 billion over 10 years if the cuts become law.
“Provider taxes are far from the best form of public policy,” says Good Samaritan executive Dan Holdhusen. “However, they prop up a broken system.”
Same Ole, Same Ole
But the dogs’ days were not done. Just a couple of hours after Tuesday’s House committee vote, MedPAC had some thoughts for skilled nursing providers.
MedPAC “recommends reforming their prospective payment systems to more equitably distribute payments among providers and better maintain access for all beneficiaries. It also recommends two years of restraining and rebasing home health and skilled nursing facility payment rates,” the group said in a statement.
To provider advocates, MedPAC’s report seems a bit dog-eared.
“This is the same recommendation MedPAC has made for the past eight or more years,” AHCA said in a statement.
Changing Models, Changing Math
But AHCA officials added they were hopeful that an old dog could learn some new tricks.
“Specifically, while MedPAC’s margin analysis includes Medicare, commercial payers, and Medicaid, the commission does not account for the decreasing proportion of overall revenue attributed to Medicare and Medicaid fee-for-service,” AHCA says. “First, MedPAC only notes a growing number of Medicare beneficiaries enrolled in Medicare Advantage plans, which in general pay less than their Medicare fee-for-service rates. Second, MedPAC indicates that Medicaid rates present less of a shortfall than in the past. Again, MedPAC bases this analysis on Medicaid FFS data and does not account for the rapid expansion of Medicaid managed care for long term care.”
Dog-tired as he undoubtedly was, Porter says he’s not tucking his tail between his legs.
The Dog Days
“If nothing else, days like this show how important it is to get our members engaged,” he tells Your Humble Correspondent, in his bravest Indiana Jones voice. “We have a great story to tell— we just have to tell it ourselves. Really proud how well folks responded at every level. We’ll need that kind of sustained effort from now on.”
Even if MedPAC were to get its way overnight, even if the provider taxes become law tomorrow, the dog days of provider advocates may only be beginning. On Wednesday, for instance, the fine folks at Kaiser Health News examined a private long term care insurance market that seems is begging to be put down. This space has already examined how investors are feeling skittish about long term and post-acute care. And it appears likely that the younger generation will, sooner rather than later, want their “share” of their elders’ wealth.
In other words, demand’s coming in the front door, but money is fleeing out the back.
So, dispense with the muzzles, ProviderNation. Cry havoc! and let slip the dogs of war.