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									State and Federal Legislative Update
American Association of Healthcare Administrative Management
               Three Rivers Pittsburgh Chapter
                        April 24, 2009




      Timothy Ohrum
      Legislative Services
      The Hospital & Healthsystem Association of Pennsylvania
                      Overview

 Insights on Slowing Economy

 State Political Environment

    2009 Priority Issues (State Budget and Mcare)

 Federal Political Environment

    Key Federal Issues

 Implications for Hospitals
Rising Financial Contributions
 Pennsylvania hospitals and health systems
  provide a total of $34 billion in direct spending
  to the state’s economy.

 Pennsylvania hospitals and health systems
  make a total direct and secondary contribution
  of $84 billion to the state’s economy.

 Nearly 625,000 Pennsylvanians depend on hospitals for their jobs
  through direct employment and the ripple effect of hospital
  employment. This represents one in every nine working
  Pennsylvanians.

 During 2007, hospital employment was nearly 286,000,
  up from 281,994 during 2006.
The Economy and
Pennsylvania Hospitals
Pennsylvania hospitals have been
affected by the nation’s economic crisis.
 Investment income has declined dramatically.
 Increased cost of borrowing.
 Decreased access to capital financing.

The economic crisis is affecting patients in need of care.
 Admissions and elective procedures have declined.
 Increases in emergency visits and patients with behavioral health
  care needs.
 Increases in patients without health care       Source: HAP member
                                                      survey, Impact of
                                                  Economic Crisis on PA
  coverage and needing financial help.              Hospitals, Dec 2008
 The Economy and
 Pennsylvania Hospitals
Access to physician care is further
threatened.
 More physicians are seeking financial support from hospitals.
 More physicians are seeking employment.

Hospitals are taking steps to address the financial impact.
 Reducing administrative expenses.
 Reducing staff.
 Postponing or reducing capital investment in building renovation
  and information technology.
 Considering cutting services.
Source: HAP member survey, Impact of Economic Crisis on PA Hospitals, Dec 2008
                      Overview
 Insights on Slowing Economy

 State Political Environment

    2009 Priority Issues (State Budget and Mcare)

 Federal Political Environment

    Key Federal Issues

 Implications for Hospitals
   Harrisburg Political Environment
 Governor Rendell’s second half of second term.

 Republicans control the Senate.

 Democrats control the House.

 “Bonusgate” continues.

 35 new state lawmakers
  in 2009.

 New leadership in
  the House.
Key State Health Care Issues for 2009
 State Budget/Economy    Medical Liability
 Health Reform           Workforce
 Market Conduct          Hospital Reporting
         Pennsylvania’s Fiscal Crisis

FY 2008/09 collections : $16 billion collected, which is 8%
below estimate

 Projection: $2.3 billion revenue shortfall by June 30,
  2009.

 Timeframes:
  – Governor’s Budget released February 4.
  – House & Senate Appropriations Committees conduct
    hearings in February and March.
  – Budget is due on June 30.
"Real people, real lives are at stake in our decisions
here. People want us to fix the problems, not back
off and shift more costs and here is my question for
him: Do you want to cut senior citizens? Prisons?
Health care? Education? Those are the questions
you have to answer if you don't want to find any
revenues.“

Dwight Evans, Majority House Appropriations
Chairman

"As revenues continue to decline, it is in the best
interest of the commonwealth that we begin
significant dialogue on future courses of action. It is
clear that the economic slowdown of the country
has had a detrimental impact on Pennsylvania.”

Joe Scarnati (R-Jefferson), Senate President
Pro Tempore
  Funding the 2009-2010 State Budget

                          Funding the state budget relies on:
                           Targeted revenue increases (smokeless tobacco,
                            cigarette taxes, and tax on natural gas extraction
                            from Marcellus Shale).

                           Use of one-time funds from the rainy Day Fund,
                            legislative surpluses, and other sources.

                           Funds coming from the American Recovery and
                            Reinvestment Act of 2009.


To balance the state budget, the spending proposal calls for:
 Cuts to/elimination of funding for the majority of line items in the budget.
 Eliminating and/or laying off nearly 3,000 state workers or equivalent.
 Budget Items of Major
 Significance to Hospitals

 Cuts in hospital supplemental payments.

 Expansion of the state’s CHIP and adultBasic programs.

 Establishment of a new tax on all health plans and significant
  changes to the pharmacy services offered under HealthChoices.

 Restating the administration’s proposal to address the Mcare
  fund’s unfunded liability.

 Creation of a new state agency to address long-term, home,
  and community-based care for the state’s elderly and
  individuals with disabilities.
           Medical Assistance Budget & Spending
           FY 2009-2010 HAP Budget Restoration

                                             2009-2010 Budget
                                            Restoration(millions)
                              State Funds      Federal Match        Total Funds
Inpatient DSH                    $5.1               $6.2              $11.3
Medical Education                $5.4               $6.6              $12.1
Community Access Funds           $2.4               $2.9               $5.4
Outpatient DSH                   $6.8               $8.2              $15.0
Critical Access Hospitals        $5.2               $6.3              $11.5
Burn Centers                     $5.5               $6.7              $12.2
Academic Medical Centers         $1.4               $1.7               $3.1
OB/NICU                          $5.0               $6.0              $11.0
Modernize MA Payment System     $45.0               $58.8             $103.8
TOTAL                           $81.9              $103.5             $185.4
Must Make Pennsylvania a
Preferred Place to Practice Medicine
Pennsylvania Faces a Physician Shortage:
 Average age of physicians engaged in direct patient care is 49.

 Almost 1 of every 4 physicians is over the age of 60.

 Only one of every 5 physicians is under the age of 40

 Almost 1 of every 5 physicians plan not to practice in
  Pennsylvania in the next 5 years.

 Only 2 of 5 physicians who completed their graduate medical
  education in PA remain practicing in the state.
  Medical Liability Claims Payments


                 Primary


Health Care
 Providers                       Claims

                  Mcare
                  Fund
            What Needs to Be Done?
Retire the Mcare Fund over a five year period by:

 Annually increasing primary coverage layer in $100,000
  increments.

 Annually decreasing Mcare Fund coverage by the same amount.

Minimize the cost impact on physicians and other participating
health care providers by:

 Applying discounts to Mcare Fund to offset cost of buying higher
  primary coverage.

 Using existing funds in the Mcare Fund and the HCPRA.
State Advocacy Ask
         Communicate with lawmakers
          about the economic importance
          of hospitals in this challenging
          environment.

         Restore the hospital Medicaid
          cuts

         Provide sufficient funds to
          modernize the hospital Medicaid
          system.

         Retire the Mcare fund.
WHAT:          HAP Advocacy Day
WHEN:          May 11-12, 2009
WHERE:         Crowne Plaza Harrisburg-Hershey
For more information, visit the HAP website at: http://www.haponline.org/programs/
                      Overview
 Insights on Slowing Economy

 State Political Environment

    2009 Priority Issues (State Budget and Mcare)

 Federal Political Environment

    Key Federal Issues

 Implications for Hospitals
   Washington Political Environment
 Democrats in control:
  - White House
  - House of Representatives
  - U.S. Senate

 The economy has pushed health care
  to a second level concern.

 Labor feels empowered.

 Hospitals vulnerable to budget
  reductions.
Federal Overview

         Political Environment

         2008 Wrap-Up

         2009 Key Issues
       Federal Elections Outcomes

 New President


 Democrats Control Senate
   58 Democrat
   41 Republican
   1 undecided (Minnesota)


 Democrats Control House
   256-179
 2009 Key Federal Issues – Short Term
Immediate Domestic Priorities:

 Economic Stimulus – completed
  – FMAP
  – Health IT
 Card Check – pending
 Finishing 2009 appropriations – completed
 Start FY2010 budget process – underway
 SCHIP reauthorization – completed
     American Recovery &
Reinvestment Act of 2009 (ARRA)
         Pennsylvania Federal Stimulus Funds:

            Health care - $4 billion
            Education - $2.6 billion
            Transportation infrastructure - $1.4 billion
            Job training and other relief - $1.1 billion
            Energy independence - $472 million
            Other infrastructure and housing - $361
             million
Items of Major Significance to Hospitals

 Medicaid Funding (FMAP)
 Medicaid and Medicare Regulations
 COBRA
 Health Information Technology
 Community Health Centers
 Broadband Technology
 Workforce
 Health and Wellness
2009 Key Federal Issues – Long Term
            Nursing Schools Pass-thru dollars
            Self-Referral
            Health IT
            Obstetrics
            Outpatient Rule
            Cap IME
            Appropriations
            Psychiatric under 21-non JCAHO
            Medical Liability - health courts
            DSH-SSI
            HAIs
            AWI
                   Vulnerabilities

 BBA II ???

 LABOR ISSUES
    Card check
    Supervisor issue
    Manual lifting
    Staffing ratios
    Mandatory OT
“Card Check”
H.R. 1409, Rep. George Miller (D-CA)
S. 560, Sen. Tom Harkin (D-IA)

 Card check certification of unions, without a secret ballot
  election.

 Mandatory arbitration to establish the first collective
  bargaining agreement if no agreement is reached after 120
  calendar days of bargaining.

 Triple damages along with fines against employers who commit
  unfair labor practices during union organizing campaigns.
      HAP’s Federal Advocacy 2009

 AHA Advocacy Day, Washington D.C. — April 27-29
 Visit your Representative and/or U.S. Senator
                     Overview
 Insights on Slowing Economy

 State Political Environment

    2009 Priority Issues (State Budget and Mcare)

 Federal Political Environment

    Key Federal Issues

 Implications for Hospitals
                  Implications for Hospitals


 Pressure to cut Medicare and Medicaid payments.

 More scrutiny on quality and patient safety.

 More activity on workforce laws and regulations.

 Strengthen relationships with lawmakers.

 Support lawmakers who support hospitals.
Pennsylvania Hospitals

								
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