Panel Ponders Medicaid Waivers, AHCA, Funding Impacts to Providers, Patients

Borgerding: “We have to be smart about how Medicaid premiums are collected, levied”

May 05, 2017

As Congress debated the American Health Care Act (AHCA) in Washington, several health care leaders participated in a panel discussion in Madison May 4 sponsored by WisPolitics on the impact the AHCA and Wisconsin’s Medicaid waiver request would have on hospitals and patients here.

WHA President/CEO Eric Borgerding was joined by John Russell, president/CEO, Columbus Community Hospital; Jon Peacock, research director, Wisconsin Council on Children and Families; and, Wisconsin Medicaid Director Michael Heifetz. WisPolitics President Jeff Mayers moderated the discussion.

Responding to what is working in Wisconsin with Medicaid reform, Russell said covering people who are at or below 100 percent FPL is definitely positive; however, Medicaid reimbursing hospitals at 65 percent of cost is a serious issue. 

Borgerding said a recent study by the Business Group on Health estimated one-third of the price of health care in southeastern Wisconsin is cost shifted due to Medicaid and Medicare underpayments. 

Medicaid is not perfect; reimbursement should be higher in some areas, according to Peacock, but it is a “cornerstone” of our health care system because it serves 1.2 million people. Without it, there would be a surge in uncompensated care, he said. 

Heifetz said Medicaid is working. No other state has achieved the coverage that Wisconsin has with its expansion model, according to Heifetz, and the program is in a good financial place and is stable. 

On the AHCA, Borgerding said any plan that Congress puts forward should recognize the Wisconsin Model that expanded coverage to 100 percent FPL, but did not receive any additional funding to cover that population. Russell said Wisconsin lawmakers should work together on a bipartisan plan to access the additional funding.

If the AHCA passes, in the short term, Heifetz does not see any challenges for Wisconsin. Longer term, the Governor has supported the per capita model that caps spending per enrollee vs. block granting the program, he said. 

“It’s not the draconian cuts that many have predicted for years, but it will require a more aggressive management of the budget line,” Heifetz said. “We are a low-spend, high-quality state, and that does not always get rewarded.”

Borgerding said reforms being discussed in the AHCA could punish non-expansion states like Wisconsin. Some populations must be carved out, such as those who are blind, disabled or elderly, which should be subject to a different, higher cap. Then, there is an issue of funding, and as Heifetz pointed out, Wisconsin is a low-spend state, which would set a lower base. 

WHA is monitoring very closely how subsidies would be paid out because “income-based subsidies are critical to Wisconsin because it allowed us to reject expansion because there was a more affordable option in the exchanges,” according to Borgerding.

While Peacock worries that a change in how Medicaid is funded could lower spending in the program and trigger rationing at the state level, Heifetz disagreed. He said the AHCA is not rationing care, but rather, is managing it or shifting the payment model in ways that are necessary. 

“Let’s move forward on payment reform and things of that nature that improve quality where WHA and others have led on these things,” Heifetz said. “Wisconsin leads on this and we can expand on that and help other states manage this problem.” 

On the Medicaid waivers and eligibility requirements, Borgerding said it is important that the proposals be soundly implemented. 

“We have to be very smart and realistic about how premiums are collected and levied,” Borgerding said. “The same is true for co-pays. These folks are making less than $12,000 a year, so the likelihood of collecting a co-pay in the ER is unlikely. We suggest the co-pay be collected by the State, not taken as a cut in reimbursement to our providers.”

Russell said people do not always fit the resource if they see an ER when a primary care clinic would have been more appropriate. 

“If people lose their eligibility, they will continue to seek treatment, and hospitals will not ‘steer them away from care,’” Russell said.

This story originally appeared in the May 05, 2017 edition of WHA Newsletter