Tag: site-neutral

MHA CEO Report — Lame Duck is Here

MHA Rounds
MHA Rounds graphic of Brian Peters

“Even though you are on the right track, you will get run over if you just sit there.” – Will Rogers

MHA Rounds graphic of Brian Peters

The balance of power at both the state and federal levels will change in 2025. Yet lawmakers still have several weeks remaining, a period we refer to as lame duck where a number of elected officials finish their terms with the opportunity to pass bills and create policy prior to leaving office at the end of the year.

Republicans regained majority in the Michigan House of Representatives, changing the balance of power from Democrats controlling both the House, Senate and executive office. This scenario can create a hectic environment where the party in power attempts to push many bills through before they lose influence next term. In many instances, lawmakers may trade their support for completely unrelated bills to gain the necessary support to pass legislation.

This period keeps associations and lobbyists up late at night – both figuratively and literally, as sessions that run into the wee hours are common. The MHA remains vigilant through those many hours and votes on any issues that impact access to care and hospital’s ability to care for Michiganders. The two most important examples are separate bills that would address government mandated nursing staffing ratios and create protections for the 340B drug pricing program.

The MHA has successfully to this point held off any movement on the government mandated nurse staffing ratio legislation, which was introduced in May 2023 and received a committee hearing in the House in November of last year. These bills would severely hamper a hospital’s ability to provide care, with the potential to lead to the closure of up to 5,100 hospitals beds across the state. The MHA has dedicated significant time and resources in educating lawmakers about the practical impacts of these bills and the lengths to which hospitals are going to address workforce challenges and to support their nurses. Our “Think it Through” messaging, which includes billboards in strategic locations as well as digital advertising, is the latest addition to our multi-faceted advocacy on this critical topic. It is safe to say we are counting down the days remaining in the session while these bills remain a threat.

While our association plays defense on nurse staffing mandates, we are playing offense with respect to 340B. We continue to advocate for the passage of House Bill 5350, which would prohibit manufacturers from discriminating against program participants based on their contract pharmacy relationships. A significant number of Michigan hospitals use 340B savings as a force multiplier, allowing these hospitals to stretch incredibly scarce resources to provide care for more patients in their communities, increasing access to care and the quality of care for Michigan’s most vulnerable residents. We’re encouraged that we will see this bill move through both chambers during lame duck and hope you will lend your support to the issue by contacting your state lawmakers through our MHA action alert.

Congress will have their own lame-duck session, which has the potential to impact additional health policy. While it remains to be seen how much activity occurs on Capitol Hill, site-neutral payment policies remain a threat to access to care for patients across Michigan and the country. As with government mandated nurse staffing ratios, policies that add cost or reduce reimbursement can lead to reduced hospital beds, service lines or even potentially hospital closures.

We’re in the home stretch of the 2023-24 legislative sessions in both Lansing and Washington DC. Be rest assured that the MHA is taking every opportunity during lame duck to meet with our state and federal lawmakers, and advocate on behalf of advancing the health and wellness of our patients and communities. While 2025 will present its own unique set of challenges and unpredictability, our focus remains on these final days of session until the last gavel signifies adjournment and sine die.

The bottom line: we are on the right track with respect to our advocacy priorities, but we will never be guilty of sitting still. I encourage all of you to join us and continue to “run through the tape” with these critical efforts during our lame-duck session.

As always, I welcome your thoughts.

MHA CEO Report — Site-Neutral Payment Policies: The Latest Threat to Patient Access

Issues in Healthcare, Top Issues - Healthcare, MHA Rounds
MHA Rounds graphic of Brian Peters

“The worst form of inequality is to try to make unequal things equal.” — Aristotle

MHA Rounds graphic of Brian PetersOperating a hospital has never been more challenging than it is today. At the most fundamental level, hospitals are small towns that operate 24/7, year-round, built around expert clinicians, as well as a wide variety of highly skilled employees in multiple disciplines. Collectively, they are tasked with the awesome responsibility of delivering a broad spectrum of high-quality healthcare services to everyone in their respective communities, regardless of their health or socio-economic status.

Our MHA Chief Medical Officer, Gary Roth, DO, often says “healthcare is everyone’s destiny.” He’s right: at some point, all of us – or our loved ones – will require the assistance of our healthcare system. And when that day comes, we as patients can and should expect that we have ready access to care. Michigan hospitals take that expectation very seriously, whether that comes in the form of physician recruitment, retention and call coverage, drug acquisition, facilities maintenance and expansion, or ensuring that the latest diagnostic and treatment technology is on-site.

Here is an economic reality: being prepared to care for anyone, for any diagnosis, at any time, creates high fixed costs. In classic business terminology, hospitals are “price takers” when it comes to government payers, because Medicaid and Medicare effectively tell hospitals what they will receive in reimbursement.

Against this backdrop, our field is currently facing a strong push at the federal level to prevent hospitals from receiving Medicare reimbursement at a level that appropriately recognizes the higher fixed and operational costs referenced above. Referred to as “site-neutral payments,” this policy would force hospitals to accept the same rates as those paid at other sites of care. This ignores the fact that the cost structures between the two settings are very different because hospitals go to great lengths to have the infrastructure in place to save lives every day. Non-hospital settings serve a very valuable but different role, and the reimbursement they receive today reflects those differences. In addition to being open 24/7/365 to all patients – including those with multiple comorbidities, and little or no health insurance coverage, hospitals must have redundant systems for energy and water so surgeries and other patient care can continue uninterrupted when the power goes out or other systems are compromised. Physician offices have no such requirements and don’t bear these costs.

Hospital outpatient departments also provide convenient access to care for the most vulnerable and medically complex patients. These settings are more likely to treat Medicare patients who have more chronic and severe conditions, have been recently hospitalized or in an emergency department and are dually eligible for Medicare and Medicaid. These patients are more expensive to care for and rely on hospital outpatient departments for their increased healthcare needs.

Implementing site-neutral payment policies would be detrimental to access to care for patients across Michigan and the country. If reimbursement is slashed across the board, hospitals will be forced to reduce their costs, which will come in the form of reduced hospital beds, service lines or even potentially hospital closures. This plan for inadequate payment can be particularly harmful for hospitals serving a high percentage of vulnerable patients, including rural hospitals. When a hospital closes services due to site-neutral payment policy, they will close to everyone, not just people covered under Medicare.

I was recently honored to be appointed to the American Hospital Association Board of Trustees and this issue is clearly a key focus of their advocacy work on Capitol Hill. The MHA is joining that effort by advocating with Michigan’s members of Congress, and our message is unambiguous: comparing hospitals with other sites of care is not comparing apples and oranges – it’s comparing apples and space shuttles. More importantly, reducing healthcare costs can’t come at the expense of reduced access to care.

As always, I welcome your thoughts.