Legislative Leaders Differ on ACA Positions; Support Increased Medicaid Funding

April 28, 2017

This is the second article in a two-part series covering the state legislative leader panel discussion that occurred at WHA Advocacy Day, April 19. The first article focused on the important role hospitals have in fostering economic development and the challenges hospitals and health systems face in attracting and retaining an adequate workforce. Read it here.

It is one of the most popular sessions at WHA’s Advocacy Day and this year the state legislators participating in the panel discussion moderated by WHA President/CEO Eric Borgerding did not disappoint the more than 1,000 in attendance April 19.

Legislators participating on the panel included: Senate Majority Leader Scott Fitzgerald (R-Juneau): Senate Minority Leader Jennifer Shilling (D-La Crosse); Assembly Speaker Robin Vos (R-Rochester); and, Assembly Minority Leader Peter Barca (D-Kenosha).

Borgerding started the Medicaid discussion by asking the panelists to consider whether a portion of the $330 million Medicaid surplus should be used to improve hospital reimbursement. He said hospitals have helped to create the surplus from reimbursement rates that "subsidize" the program but do not cover the cost of care provided to Wisconsin’s Medicaid enrollees. He asked each panelist for their thoughts about using the additional revenue to increase Medicaid payments to hospitals.

"I look at the Disproportionate Share Hospital (DSH) payment as a way to deal with the fact that we are not taking Medicaid federal dollars here, and it’s a way to compensate hospitals for low payments," Shilling said. "As we look at how we can help with uncompensated care costs, as we think about the $330 million surplus, I would support adding that to the DSH proposal in the budget."

The Medicaid program in Wisconsin is the worst payer in the United States, according to Vos.

"Medicaid…is a one-size-fits-all, Washington-dictated program…then we beg for waivers," Vos said. "A program like DSH makes sense. It is why on a bipartisan basis, Republicans and Democrats said we are going to make sure we direct funds toward the hospitals that deal with the poorest folks in the most challenging communities. I agree we should continue to put more funding into DSH. The difficulty we have with that, when a budget is put together, all the pieces are already allocated—so if we choose to put money into DSH, it means taking it from the university or school districts—neither of which I relish doing. I am more than willing to take a look at it as the finance process goes through, but it is not an easy problem to solve. The fact that we have it in the budget is a major advantage; it is something we could grow over time."

Borgerding said it is important to note that since Wisconsin rejected Medicaid expansion, in every one of the budgets since, the Governor and the state Legislature have increased Medicaid funding. So while we rejected those federal dollars, Wisconsin has replaced those with state dollars and has kept its commitment to the Medicaid program, which is greatly appreciated.

"The heartburn came with the requirement that states expand eligibility to 138 percent FPL," Borgerding said. "There was no alternative. You either expanded the way Washington said to expand, or you were out of luck. The fact is, Wisconsin did expand and put 130,000 more people into Medicaid below 100 percent FPL. The difference between Wisconsin and Illinois is Illinois gets 100 percent, ramping down to 90 percent of federal dollars to pay for that same exact population that Wisconsin is spending $280 million to cover. My hope is in 2017 there is a way to not necessarily refight the Medicaid expansion battle, but instead come together in a bipartisan way that we can petition the Administration, maybe under a waiver, to recognize the expansion Wisconsin did and the fact that we added 130,000 people. Why should we not be recognized for doing that with the enhanced federal match? What is the difference between the traditional federal match at 60 percent and the enhanced federal match at 90 percent? They are both a federal match. Unless we’re proposing to take less money from the federal government and take that match down from 60 to 40, which I don’t think we are doing. My sense is it’s a discussion about what should the match rate be and how should Wisconsin be recognized for the commitment we did make. I think we could find some bipartisan common ground on that."

In his last question to the panel, Borgerding asked for their opinion on what the goals should be as Congress debates the repeal and replacement of the ACA. He asked them to keep in mind that the "Wisconsin model" for Medicaid expansion relied heavily on covering those below 100 percent FPL and moving those above the poverty line into the exchanges.

Fitzgerald led off by emphasizing the importance of allowing states the flexibility to design their own programs to meet the needs of their own state. A one-size-fits-all program does not work, even within a state. When the ACA was rolled out, he said it was that concern that led some states to be reluctant to expand Medicaid and accept the federal dollars.

"I think all legislative leaders, no matter what state they are from, know if they come up with a system that allows those dollars to go into their state coffers, so we can design or redesign what we think is the most effective way to implement that in our state, that is what they are looking for," Fitzgerald said. "We are fortunate to have Speaker Ryan’s ear. I will tell you what I tell him: Don’t penalize states no matter where they landed on whether they created a state or used the federal exchange, and second make sure the dollars come directly to us so we can design our own program."

Barca said he wants to maximize the dollars coming back to Wisconsin. While waivers are vitally important, he cautioned that he believes the worst thing would be block grants for medical assistance.

"If their goal in the block grants is to make sure states have more resources available to accomplish their goal, I would say fantastic. But normally when Congress uses block grants, it is their way to cut the resources coming back. The cost of serving people with disabilities is expensive; frail elderly people who need the quality care you provide is expensive," he said. "I don’t want to see block grants at the expense of the fact that we get waivers we want, but not at the expense of getting only 2/3rds of the funds we need to serve people with disabilities. That worries me."

If we are stuck with the ACA, Barca said, make it the best that it can possibly be. Medicare wasn’t perfect when it was passed, he said, but I don’t hear people saying let’s get rid of Medicare. If they can’t get the votes at the end of the day, then at least let’s tweak it and make it the best program it can possibly be so citizens have coverage and providers have the kind of reimbursement so you can do the job right.

States need more flexibility, according to Vos, without the federal government dictating how to do it.

"When I look at Medicaid, all we (the states) ask is to give us a block grant so we can be the innovators that the framers of our Constitution imagined that every state would be," Vos said. "What happens in Georgia or Florida is not the exact same as what happens in Minnesota or Wisconsin…so the American people can see which one works better. Our current system takes well-meaning unelected bureaucrats, who impose a one-size-fits all system on everybody, and then we have to request a waiver from someone who has never ran for office and has never set foot in your hospital.

"I want Wisconsin government to have control. You can bring us into your hospital and educate us. You do not have the same access to members of Congress that you have to your state legislators as far as making decisions in the interest of your organizations. As we look at where we are going forward with health care, that’s my vision. More power going to us…we can put cost controls in place and innovate," according to Vos.

The federal government could learn a lot from the health care delivery systems in Wisconsin. Shilling believes that story should be told broadly about Wisconsin’s outcome based, patient-centered, evidence-based care.

"Great things are happening here in our health care models. If we look at changes to the ACA, we need to cover preexisting conditions," according to Shilling. "There are people across the country that the idea of taking away insurance and access is frightening to them. Is health care a right or a privilege? What is the right way to access care? I think we should talk about wellness incentives. I know you are doing bold things…You in health care have known this feeling of uncertainty. Are we tweaking the ACA or blowing it up? That uncertainty exists for us as policymakers, but you are on the front lines of this uncertainty."

Borgerding thanked the legislators for the excellent discussion and closed by acknowledging the dedication of our state legislators.

"What we should all take away from this discussion is the substantive grasp and understanding that our legislative leaders have on health care in Wisconsin," Borgerding said.

This story originally appeared in the April 28, 2017 edition of WHA Newsletter