It’s a challenging time for the healthcare community. Faced with continuous threats to federal funding, hospitals are waiting for the restoration of various federal funding streams that are essential to their bottom lines. Although the continuing resolution that passed Congress on January 23 restored funding to the Children’s Health Insurance Program (CHIP), there are still several other programs that our members are waiting to see restored.
The Children’s Health Insurance Program (CHIP), is a low-cost insurance program for families with incomes too high for Medicaid but too low to afford private insurance plans. CHIP covers doctor visits, prescriptions, emergency services and hospital care. Approximately 9 million children are enrolled in the program. CHIP expired on September 30, and a short-term funding extension was passed by Congress in late December. Then the hospital community successfully lobbied Congress and it was ultimately extended for 6 years. CHIP was included within the legislation that ended the government shutdown and extended federal funding until February 8.
However, several other federal programs are still hanging in the balance. The 340B program allows safety net hospitals to purchase outpatient drugs from pharmaceutical manufacturers at a discounted rate for some of New York’s most vulnerable patients. The Centers for Medicare & Medicaid Services (CMS) decided to cut Medicare 340B payments to hospitals by $1.6 billion. The cut went into effect on January 1. Locally, these cuts will have an enormous impact. Pandion Healthcare: Education and Advocacy and more than 30 state and regional hospital associations filed an amicus brief to challenge these harmful reductions in court.
In addition, Disproportionate Share Hospital (DSH) payments to hospitals are in jeopardy. DSH funding goes to hospitals that serve a disproportionate number of vulnerable and low-income individuals. Current law calls for dramatic reductions to Medicare and Medicaid DSH payments. Medicare DSH cuts began in 2013 and do not sunset. Medicaid DSH cuts began on October 1, 2017, and will continue until 2025, unless current law changes. This will result in a $300 million loss over the next year, compounding to more than $7 billion over the next ten years.
Two other critical programs – the Medicare Dependent Hospital (MDH) and the Low-Volume Hospital (LVH) payment adjustment – expired on September 30. These programs are essential for rural hospitals that are under serious financial pressure due to a lower volume of patients and a higher percentage of Medicare beneficiaries than urban and suburban hospitals. Small, rural hospitals are vital to the health of their communities, and they’re often the largest employers. The MDH and LVH programs must be extended.
How can hospitals continue to thrive in this environment? Hospitals are the economic drivers of our communities. In Rochester, the top two employers are the University of Rochester/URMC and Rochester Regional Health. Together, they generate more than $7.1 billion in economic activity through jobs and the purchasing of goods and services. They provide $888 million in tax dollars and $539 million in community benefits. In addition, Rochester area hospitals employ more than 54,000 people.
Pandion Healthcare: Education & Advocacy will continue to fight against funding cuts to the 17 hospitals that we represent in Rochester, the Finger Lakes and the Southern Tier.
About Pandion Healthcare: Education & Advocacy
Operating via our not-for-profit 501(c)3 and 501(c)6 organizations, we utilize our collective strength to convene regional healthcare leaders and provide critical access to peers, lawmakers, thought leaders, and educational resources. Synthesizing best practices through data analytics, we strongly advocate for our members, and partner with regional, state, and national players. For more information, visit www.pandionalliance.com.