IHA Update - Jan 30, 2009

The IHA issued a legislative update on Jan 30. Of note is a proposed bill to limit insurance carriers from demanding that members accept care outside of the US as a condition of coverage. The entire IHA Legislative Update is copied below:


IHA Examines FSSA HIP Expansion Proposal
On Wednesday, FSSA Secretary Anne Murphy appeared before the House Ways and Means Committee to address the agency’s funding levels in the 2009-2011 state budget. Two elements of her presentation were of particular importance to Indiana hospitals: 1) the status of the existing Healthy Indiana Plan (HIP); and 2) a new proposal to expand HIP.

FSSA has put forth the Indiana Check-Up Plan II, which would allow more Hoosiers to be covered under the current HIP program, expand coverage for the disabled, and increase Medicaid reimbursement for hospitals closer to Medicare levels. The funding would come from a redirection of state appropriations made to replace the HCI property tax levies and a new provider tax paid by hospitals. In addition, FSSA has proposed to phase out all allotments under the Disproportionate Share Hospital (DSH) program in exchange for federal approval of covering more non-parental adults under HIP.

There are multiple reasons why FSSA is pursuing the Check-Up Plan II. For one, the majority of the 43,000 HIP enrollees are non-parental adults. Since this population is not normally covered by Medicaid, agencies that approved the HIP waiver required Indiana to give up $50 million annually in federal DSH dollars. In addition, a cap of 34,000 enrollees was placed on the number of non-parental adults that could be covered.

In her testimony, Secretary Murphy told the Committee that this cap of 34,000 will be reached early this year. FSSA says that in order for CMS and OMB to increase this limit, Indiana would likely have to forgo additional DSH funding to offset the federal government’s future costs (referred to as ‘budget neutrality’). Under the Indiana Check-Up Plan II, all remaining DSH dollars would be phased out by 2013.

BACKGROUND: The total amount of DSH dollars available to hospitals in Indiana (after the diversion of $50 million for the first HIP program) is roughly $130 million. While this number is significant, FSSA believes that the overall benefit of the Check-Up Plan II would offset this loss to Indiana’s hospitals as a whole.

Another motivator is that many disabled Hoosiers are signing up for HIP. Although they may be partially Medicaid-eligible, they are seeking to avoid the cumbersome “spend down” system imposed in Indiana. It is believed that this will drive expenses for the HIP program upward faster than expected. A chart produced by FSSA during Wednesday’s budget presentation showed annual expenses for the HIP program meeting revenues by 2011. FSSA proposes that a provider assessment levied on hospitals (in addition to the tobacco tax already dedicated for HIP) would then help stabilize funding for the entire program.

IHA is engaged with FSSA to better understand these and many other components of the Check-Up Plan II. To properly evaluate any proposed expansion of HIP, we are working with Secretary Murphy and her staff to better understand the magnitude and distribution of dollars returned to hospitals under HIP since its inception. We firmly support expanding coverage and leveraging more federal dollars back to the State of Indiana.

There are elements in the plan that generated reservations. The Federal Leveraging Task Force, convened by the IHA Board to explore the redesign of DSH and other supplemental payment programs, has been studying the proposal. Concerns have been raised about a hospital assessment that could return less than 100 percent to hospitals. In addition, members feel that the impact of the first HIP program must be better understood before Indiana surrenders its entire DSH allotment.

Legislation has been introduced to serve as a “placeholder” for FSSA’s proposal, but the bill’s author and Secretary Murphy have assured us that unless IHA supports a hospital provider tax, the major components of the Indiana Check-Up Plan II described above will not move forward this session.

This week IHA's Federal Leveraging Task Force recommended that a provider tax not be pursued at this time. This has been communicated to key policymakers. The task force did direct IHA to continue working with FSSA on many elements of the plan including: improving the current HIP program, expanding coverage for more Hoosiers, and creating a transparent and equitable supplemental payment structure.

Statewide Smoke-Free Air Bill to Be Heard Next Week
Broad smoke-free air legislation authored by Rep. Charlie Brown (D-Gary) has been scheduled for a hearing next week in the House Public Policy Committee. HB 1213 would ban smoking in public places and all enclosed workplaces. If it is successful, Indiana would join 23 other states that have enacted comprehensive smoke-free air legislation. The hearing will be held in the House Chamber on Feb. 4 at 9 a.m. and will be available online through the General Assembly's Web page.

IHA is supporting this legislation along with many other groups including the Coalition of Advanced Practice Nurses, the Indiana Academy of Family Physicians, the Indiana Minority Health Coalition, the Indiana Rural Health Association, and many more.

HB 1084: Medical Tourism Bill
A bill heard this week in the Indiana House would ban insurers from requiring health care treatment outside the U.S. as a condition of coverage. Rep. Craig Fry (D-Mishawaka), chairman of the House Insurance Committee, has authored a bill that would prevent some health insurers from forcing or encouraging customers to receive treatment overseas. HB 1084 was heard this week in the Committee, but a vote was not taken. It will be back on the agenda on Feb. 4 when the Insurance Committee meets at 10:30 a.m.

Last November, Indianapolis-based WellPoint launched a pilot program with a Wisconsin employer to cover certain elective procedures performed in India. This program was featured in an article published last month by Inside Indiana Business. Read the article.

Register Now for Hospital Day at the Statehouse
Registration is now open for Hospital Day at the Statehouse. The event is set for March 10. This year, Hospital Day will follow a new format. The luncheon will be members-only and hospital leaders should instead invite their legislators to attend an evening reception from 4:30-6:30 p.m. at the Eiteljorg Museum. To register or to view a copy of the brochure, visit www.regonline.com/iha2009hospday.