Testimony

Testimony / en Sat, 14 Jun 2025 11:43:56 -0500 Wed, 11 Jun 25 15:09:49 -0500 AHA Statement to House Energy & Commerce Subcommittee on Health Hearing for June 11, 2025 /testimony/2025-06-11-aha-statement-house-energy-commerce-subcommittee-health-hearing-june-11-2025 Statementof the�� Associationfor theCommittee on Energy and Commerce&nbsp;Health Subcommitteeof theU.S. House of Representatives“Made in America: Strengthening Domestic Manufacturing and the Health Care Supply Chain”June 11, 2025On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — the �� Association (AHA) appreciates the opportunity to submit this statement for the record to the Committee on Energy and Commerce Health Subcommittee hearing “Made in America: Strengthening Domestic Manufacturing and the Health Care Supply Chain.”The AHA believes it is necessary to strengthen the domestic supply chain for essential pharmaceutical and other medical products and recognizes the value of reducing reliance on international sources. We are also aware that achieving this goal will require significant time due to the logistical complexity and resources involved in reorienting medical and pharmaceutical supply chains.Each day in America’s hospitals and health systems, patients receive safe and effective care from provider teams using a wide array of pharmaceuticals and medical devices. Patients’ lives depend on the ready availability of drugs and devices to respond to emergent conditions like heart attacks and infections, and other critical illnesses like cancer and organ failure. The medical supply chains for pharmaceutical products and other medical devices are highly complex, requiring hospitals to draw on domestic and international sources. These supply chains are prone to significant disruption from a wide range of factors, including transportation interruptions, natural disasters, raw materials shortages and production breakdowns.Despite ongoing efforts to bolster the domestic supply chain, international sources still supply a significant proportion of essential medical goods. For example, nearly 70% of medical devices marketed in the U.S. are manufactured exclusively overseas.1 In 2024 alone, the U.S. imported over $75 billion in medical devices and supplies, according to AHA analysis of Census Bureau data. These imports include many low-margin, high-use essentials for hospital settings that are necessary for patient care. Some of these devices are single-use, designed to protect patients from infection, such as single-use blood pressure cuffs, stethoscope covers and sterile drapes. Others are small devices used ubiquitously in hospitals, such as anesthesia instruments, cautery pencils, needles, syringes and pulse oximeters. The low-margin nature of these products makes them difficult to produce within the U.S. At the same time, disruption in the availability of these devices would curtail hospitals’ ability to perform life-saving surgeries and keep patients safe from contagion, as well as hinder providers’ ability to effectively diagnose, monitor and treat patients.Many pharmaceuticals are also sourced from overseas. For example, U.S. providers import many cancer and cardiovascular medications, immunosuppressives, antibiotics and combination antibiotics. For many patients, even a temporary disruption in their access to these needed medications could put them at significant risk of harm, including death. Carefully planned chemotherapy treatments and antibiotic schedules are essential to giving patients the best chance of overcoming their diseases. Similarly, the provision of necessary cardiovascular medications must be continuous to preserve their cardiovascular health.As of the first quarter of 2025, there are 270 drugs on the active shortage list.&nbsp;A recent Government Accountability Office analysis found that the duration of drug shortages has increased, with nearly 60% of drug shortages lasting two or more years in 2024, compared to only one-third of shortages lasting that long in 2019.2 In addition to finished pharmaceutical products, the U.S. sources many raw ingredients internationally for pharmaceuticals. These raw ingredients are commonly known as active pharmaceutical ingredients (APIs) and are the most important components of any pharmaceutical manufacturer’s supply chain. The U.S. gets nearly 30% of its APIs from China, and according to a 2023 Department of Health and Human Services estimate, over 90% of generic sterile injectable drugs — including many chemotherapy treatments and antibiotics — depend on APIs from either India or China. 3 While these statistics are an indicator of the importance of reshoring to protect America’s interests and strengthen the pharmaceutical and medical device supply chains, reshoring cannot, on its own, provide the supply chain stability needed to ensure unrestricted access to necessary drugs and devices for patient care. Included in the 270 active drug shortages are the lingering shortages of intravenous (IV) fluids stemming from the impacts of Hurricane Helene on a large North Carolina production facility in 2024.4 Despite that facility being located on American soil, it was not impervious to supply chain disruptions. While AHA is supportive of efforts to onshore and reshore pharmaceutical and medical device supply chains, domestic disruptions highlight the need for a diverse supply chain that includes international sourcing.To that end, a critical step in protecting America’s pharmaceutical and medical supply chains is understanding vulnerabilities from the beginning of production to the moment a drug is administered to a patient or a device is used to deliver care. Supply chain vulnerabilities often only become apparent when the chain has been broken, as in the case of the IV fluid shortage that resulted from Hurricane Helene. Proactively mapping and assessing the pharmaceutical supply chain, as well as supply chains for other medical devices and equipment, is an important step to improving resiliency in U.S. supply chains and protecting patients’ access to care.The AHA recently expressed support for S. 1784, the Mapping America’s Pharmaceutical Supply (MAPS) Act. The bill would codify a recent executive order from the administration to secure essential medicine supply chains.5 Additionally, it would require the Department of Health and Human Services to perform a comprehensive risk assessment of the entire U.S. pharmaceutical supply chain. The MAPS Act is an effective step toward strengthening the U.S. pharmaceutical and medical device supply chains. The AHA encourages the House of Representatives to take up similar legislation and look for more opportunities to encourage both onshoring and diversity in the supply chain to ensure health care resilience and protect U.S. national security.Strengthening supply chains for essential pharmaceutical and other medical products is necessary, and the AHA recognizes the value of reducing reliance on international sources. Achieving this goal will require significant time and resources, given the complexity of medical and pharmaceutical supply chains, and the importance of supply chain diversity, in addition to the reshoring goal, should not be underestimated. AHA appreciates the committee’s attention to this topic and looks forward to further collaboration in the future.<div><hr><div id="ftn1">1&nbsp; <a href="https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/" target="_blank" title="(opens in a new window)">https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/</a>2 Drug Shortages: HHS Should Implement a Mechanism to Coordinate Its Activities GAO-25-107110. April 09, 2025. Publicly Released: April 09, 2025. &nbsp; 3 &nbsp;<a class="ck-anchor" href="https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf" id="https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf">https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf</a>&nbsp;</div></div>4 <a href="https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics" target="_blank" title="(opens in a new window)">https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics</a>5 <a href="https://www.rickscott.senate.gov/2025/5/sen-rick-scott-colleagues-introduce-the-maps-act-to-boost-u-s-medicine-supply-chain-curb-dependence-on-communist-china">https://www.rickscott.senate.gov/2025/5/sen-rick-scott-colleagues-introduce-the-maps-act-to-boost-u-s-medicine-supply-chain-curb-dependence-on-communist-china</a>&nbsp; Wed, 11 Jun 2025 15:09:49 -0500 Testimony AHA Senate Statement on Trade in Critical Supply Chains /testimony/2025-05-14-aha-senate-statement-trade-critical-supply-chains Statementof the�� Associationfor theUnited States SenateCommittee on Finance“Trade in Critical Supply Chains”May 14, 2025On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — the �� Association (AHA) appreciates the opportunity to submit this statement for the record to the Senate Committee on Finance regarding the importance of trade in critical supply chains.<h2>Trade in Critical Supply Chains: Challenges</h2>The AHA believes it is necessary to strengthen the domestic supply chain for essential pharmaceutical and other medical products and recognizes the value of reducing reliance on international sources. We are also aware that achieving this goal will require significant time due to the logistical complexity and resources involved in reorienting medical and pharmaceutical supply chains.<h3>Access Disruption</h3>Each day in America’s hospitals and health systems, patients receive safe and effective care from provider teams using a wide array of pharmaceuticals and medical devices. Patients’ lives depend on the ready availability of drugs and devices to respond to emergent conditions like heart attacks and infections, and other critical illnesses like cancer and organ failure. The medical supply chains for pharmaceutical products and other medical devices are highly complex and require hospitals to draw on domestic and international sources. These supply chains are also prone to significant disruption from a wide range of factors, including transportation interruptions, natural disasters, raw materials shortages and production breakdowns.Despite ongoing efforts to bolster the domestic supply chain, international sources supply a significant proportion of essential medical goods. For example, nearly 70% of medical devices marketed in the U.S. are manufactured exclusively overseas<a href="#_ftn1" title="">1</a> In 2024 alone, the U.S. imported over $75 billion in medical devices and supplies, according to AHA analysis of Census Bureau data. These imports include many low-margin, high-use essentials in hospital settings necessary for patient care. Some of these devices are single-use, designed to protect patients from infection, such as single-use blood pressure cuffs, stethoscope covers and sterile drapes. Others are small devices used ubiquitously in hospitals, such as anesthesia instruments, cautery pencils, needles, syringes and pulse oximeters. Disruption in the availability of these devices would curtail hospitals’ ability to perform life-saving surgeries and keep patients safe from contagion, as well as hinder providers’ ability to effectively diagnose, monitor and treat patients.Many pharmaceuticals are also sourced from overseas. For example, U.S. providers import many cancer and cardiovascular medications, immunosuppressives, antibiotics and combination antibiotics. For many patients, even a temporary disruption in their access to these needed medications could put them at significant risk of harm, including death. Carefully planned chemotherapy treatments and antibiotic schedules are essential to giving patients the best chance of overcoming their diseases. Similarly, the provision of necessary cardiovascular medications must be continuous to preserve their cardiovascular health. As of the first quarter of 2025, there are 270 drugs on the active shortage list, including lingering shortages of intravenous (IV) fluids stemming from the impacts of Hurricane Helene on a large North Carolina production facility.2 A recent Government Accountability Office analysis also found that the duration of drug shortages has increased, with nearly 60% of drug shortages lasting two or more years in 2024, compared to only one-third of shortages lasting that long in 2019.3In addition to finished pharmaceutical products, the U.S. sources many raw ingredients internationally for pharmaceuticals. These raw ingredients are commonly known as active pharmaceutical ingredients (APIs) and are the most important components of any pharmaceutical manufacturer’s supply chain. The U.S. gets nearly 30% of its APIs from China, and according to a 2023 Department of Health and Human Services estimate, over 90% of generic sterile injectable drugs — including many chemotherapy treatments and antibiotics — depend on APIs from either India or China.4 This means that trade disruptions and other shortage events limit the ability of American drug manufacturers to produce critical drugs even here in the U.S.5<h3>Increased Costs</h3>Tariffs on medical imports could significantly raise costs for hospitals. A recent survey found that 82% of health care experts expect tariff-related expenses to raise hospital costs by at least 15% over the next six months, and 94% of health care administrators expect to delay equipment upgrades to manage financial strain.6 Tariffs also may force hospitals to seek new vendors — often at higher cost or with lower reliability. In fact, 90% of supply chain professionals expect procurement disruptions and other shortages.7&nbsp;An analysis published in 2019 estimated that drug shortages alone result in at least $359 million annually in additional labor costs to hospitals because of the need to find alternative drugs to provide to patients.8These increased costs come at a time when hospital expenses are already outpacing inflation and significantly outpacing reimbursement. In 2024, total hospital expenses grew 5.1%, far surpassing the overall inflation rate of 2.9%. Though expense growth has started to slow in 2025, it remains elevated — particularly in areas driven by labor and supply chain pressures. Persistent expense growth threatens hospitals’ solvency and ability to sustain comprehensive services in their communities.Despite escalating expenses, Medicare reimbursement continues to lag behind inflation — covering just 83 cents for every dollar spent by hospitals in 2023, resulting in over $100 billion in underpayments, according to AHA analysis of AHA Annual Survey data. From 2022 to 2024, general inflation rose by 14.1%, while Medicare net inpatient payment rates increased by only 5.1% — amounting to an effective payment cut over the past three years. The AHA estimates that this erosion in payment value due to inflation resulted in $8.4 billion in lost hospital revenue during that period, further straining hospitals’ ability to care for Medicare beneficiaries, who make up a large share of most hospitals’ patients. In total, hospitals absorbed $130 billion in underpayments from Medicare and Medicaid in 2023 alone. These shortfalls are worsening — growing on average 14% annually between 2019 and 2023.<h2>Trade in Critical Supply Chains: Solutions</h2>Maintaining and improving pharmaceutical and medical device supply chains is essential to preserving patient access to care, reducing health care costs, and protecting America’s interests. While AHA recognizes the many challenges associated with the medical supply chain, we are committed to identifying workable solutions that protect America’s interests and shore up the supply chain while avoiding access disruption and increased costs.<h3>Maintain Tariff Exceptions for Pharmaceuticals, Adopt Them for Medical Devices and Supplies</h3>AHA has urged the administration to maintain tariff exceptions for pharmaceuticals and pharmaceutical products and to adopt them for medical devices and other critical supplies to minimize inadvertent disruptions to patient care.9 It is especially critical to have these exceptions for products already in shortage, and for which production in countries subject to increased tariffs supplies a significant part of the U.S. market for that product. Mitigating supply chain challenges requires diversifying where raw materials are sourced and where products are manufactured. Imposing tariffs that limit the U.S.’s ability to acquire constituent parts or finished medical and pharmaceutical products from abroad will hinder supply chain resiliency. AHA requests that tariff exceptions continue for pharmaceuticals and pharmaceutical products and that additional exceptions be added for medical devices and other critical supplies needed to provide care.<h3>Pass Legislation that Strengthens Supply Chains</h3>A critical step in protecting America’s pharmaceutical and medical supply chains is understanding vulnerabilities from the beginning of production to the moment a drug is administered to a patient or a device is used to deliver care.In the 118th Congress, two bills were introduced in the Senate that would increase visibility into and understanding of the U.S. pharmaceutical supply chain, in particular. The Pharmaceutical Supply Chain Risk Assessment Act of 2023 would require a comprehensive risk assessment of the entire U.S. pharmaceutical supply chain. This overarching project will help provide critical information necessary to mitigate and prevent drug supply shortages. A disruption anywhere in the supply chain can create prolonged difficulties in pharmaceutical supply acquisition for providers, and avoiding these disruptions before they occur will benefit providers and the patients they serve.10The Mapping America’s Pharmaceutical Supply (MAPS) Act creates a plan for the Food and Drug Administration and the Department of Defense to map the U.S. pharmaceutical supply chain. The act also includes the use of data analytics to identify and predict supply chain vulnerabilities and other national security threats. With the information collected and analyzed through the MAPS Act, it will be possible to begin addressing weaknesses in the pharmaceutical supply chain.11 Building on the framework created under the MAPS Act, the Pharmaceutical Supply Chain Risk Assessment Act of 2023 would require a comprehensive risk assessment of the entire U.S. pharmaceutical supply chain. A disruption anywhere in the supply chain can create prolonged difficulties in pharmaceutical supply acquisition for providers, and avoiding these disruptions before they occur will benefit providers and the patients they serve.<a href="#_ftn2" title="">12</a>AHA urges reintroduction of the MAPS Act and the Pharmaceutical Supply Chain Risk Assessment Act in the 119th Congress. Supply chain vulnerabilities often only become apparent when the chain has been broken, as in the case of the IV fluid shortage that resulted from Hurricane Helene. Proactively mapping and assessing the pharmaceutical supply chain, as well as supply chains for other medical devices and equipment, is an important step to improving resiliency in U.S. supply chains and protecting patients’ access to care.<h2>Conclusion</h2>Strengthening supply chains for essential pharmaceutical and other medical products is necessary, and AHA recognizes the value of reducing reliance on international sources. Achieving this goal will require significant time and resources, given the complexity of medical and pharmaceutical supply chains, and the importance of supply chain diversity in addition to the reshoring goal, should not be underestimated. AHA appreciates the committee’s invitation to comment on this topic and looks forward to further collaboration in the future. __________<div><div id="ftn1"><a href="#_ftnref1" title="">1 </a><a class="ck-anchor" href="https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/" id="https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/">https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/</a> 2 <a class="ck-anchor" href="https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics" id="https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics">https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics</a> 3 Drug Shortages: HHS Should Implement a Mechanism to Coordinate Its Activities GAO-25-107110. Apr. 09, 2025. Publicly Released: Apr 09, 2025. 4&nbsp;<a class="ck-anchor" href="https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf" id="https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf">https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf</a>&nbsp; 5 Neils Graham, Atlantic Council, April 19, 2023; The US is relying more on China for pharmaceuticals and vice versa. 6&nbsp;<a class="ck-anchor" href="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/" id="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/">https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/</a> 7&nbsp;<a class="ck-anchor" href="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/" id="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/">https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/</a> 8&nbsp;<a class="ck-anchor" href="https://wieck-vizient-production.s3.us-west-1.amazonaws.com/page-Brum/attachment/c9dba646f40b9b5def8032480ea51e1e85194129" target="_blank" title="(opens in a new window)" id="https://wieck-vizient-production.s3.us-west-amazonaws.com/page-Brum/attachment/c9dba646f40b9b5def8032480ea51e1e85194129">https://wieck-vizient-production.s3.us-west-amazonaws.com/page-Brum/attachment/c9dba646f40b9b5def8032480ea51e1e85194129</a> 9 <a class="ck-anchor" href="/lettercomment/2025-05-06-aha-comments-commerce-department-investigation-pharmaceutical-imports" id="/lettercomment/2025-05-06-aha-comments-commerce-department-investigation-pharmaceutical-imports">/lettercomment/2025-05-06-aha-comments-commerce-department-investigation-pharmaceutical-imports</a> 10 <a class="ck-anchor" href="/lettercomment/2023-08-10-aha-letter-support-pharmaceutical-supply-chain-risk-assessment-act-2023" id="/lettercomment/2023-08-10-aha-letter-support-pharmaceutical-supply-chain-risk-assessment-act-2023">/lettercomment/2023-08-10-aha-letter-support-pharmaceutical-supply-chain-risk-assessment-act-2023</a> 11&nbsp;<a class="ck-anchor" href="/lettercomment/2023-08-10-aha-letter-support-mapping-americas-pharmaceutical-supply-chain-or-maps-act-2023" id="/lettercomment/2023-08-10-aha-letter-support-mapping-americas-pharmaceutical-supply-chain-or-maps-act-2023">/lettercomment/2023-08-10-aha-letter-support-mapping-americas-pharmaceutical-supply-chain-or-maps-act-2023</a> 12&nbsp;<a href="/lettercomment/2023-08-10-aha-letter-support-pharmaceutical-supply-chain-risk-assessment-act-2023">/lettercomment/2023-08-10-aha-letter-support-pharmaceutical-supply-chain-risk-assessment-act-2023</a>&nbsp;</div></div> Wed, 14 May 2025 12:04:36 -0500 Testimony AHA Statement to House Committee on Ways and Means on Concurrent Resolution on the Budget for FY 2025, H. Con. Res. 14 /testimony/2025-05-13-aha-statement-house-committee-ways-and-means-concurrent-resolution-budget-fiscal-year-2025-h-con-res-14 Statement of the �� Association for the Committee on Ways and Means of the U.S. House of Representatives “Concurrent Resolution on the Budget for Fiscal Year 2025, H. Con. Res. 14” May 13, 2025On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) appreciates the opportunity to provide comments on legislative proposals under consideration before the Ways and Means Committee.&nbsp;We would like to provide feedback on sections of legislative proposals to comply with the reconciliation directive included in Section 2001 of the Concurrent Resolution on the Budget for Fiscal Year 2025, H. Con. Res. 14.&nbsp;<h2>RURAL EMERGENCY HOSPITALS&nbsp;</h2>The AHA appreciates the committee’s intent to build on the rural emergency hospital (REH) designation in Section 111201. Expanding the definition of REH will allow additional facilities to better serve their communities, and we look forward to working with the committee to strengthen the REH designation.<h2>“CHOICE” ARRANGEMENTS&nbsp;</h2>The AHA welcomes the provisions in Sections 110201-110203 that would allow for greater health plan choice for employees and alleviate administrative burden on employers through Custom Health Option and Individual Care Expense (CHOICE) arrangements.&nbsp;<h2>TRANSPORTATION FRINGE BENEFIT&nbsp;</h2>The AHA has concerns regarding Section 112024, which would increase the unrelated business taxable income of tax-exempt organizations by including the amount paid or incurred for any qualified transportation fringe benefit. The administrative burden this provision would create for tax-exempt organizations, including hospitals with tax-exempt status, would far outweigh any revenue generated.&nbsp;<h2>PARTIAL DEDUCTION FOR CHARITABLE CONTRIBUTIONS&nbsp;</h2>The AHA appreciates the provisions in Section 110112, which would create a temporary deduction for non-itemizing taxpayers up to $150 for single filers ($300 for married filing jointly) for charitable cash contributions for tax years 2025 through 2028. This provision will incentivize more individuals to make donations to tax-exempt charitable organizations.&nbsp;<h2>TAX INCENTIVES&nbsp;</h2>Sections 112003, 112004, 112009, and 112015 would phase out and eliminate several tax incentives from the Inflation Reduction Act that are available to hospitals for energy-efficient construction and clean energy vehicles.&nbsp;<h2>CONCLUSION&nbsp;</h2>Thank you for your consideration of the AHA’s comments on these legislative proposals. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities. Tue, 13 May 2025 15:05:45 -0500 Testimony AHA Statement on the House Energy & Commerce Full Committee Markup of Budget Reconciliation Text /testimony/2025-05-13-aha-statement-house-energy-commerce-full-committee-markup-budget-reconciliation-text On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) writes to share comments on Budget Reconciliation Text that is to be considered by the Energy and Commerce Committee.&nbsp;Medicaid is the largest single source of coverage in the United States, providing health care to more than 72 million Americans. These include children and babies, people with disabilities, the elderly and nursing home patients. In addition, it is a program upon which so many hard-working people depend.&nbsp;The following comments are specific to Subtitle D of the Committee Print providing for reconciliation pursuant to H. Con. Res. 14, the Concurrent Resolution on the Budget for Fiscal Year 2025.&nbsp;Section 44132. Moratorium on new or increased provider taxes.&nbsp;States can finance the non-federal share of the Medicaid program by applying health care-related taxes, often referred to as provider taxes, fees or other assessments. States can implement these taxes through various approaches, including determining which providers to tax (e.g., hospitals and health systems, nursing facilities, managed care organizations) and on what basis to apply the tax (e.g., per admission or bed, share of net revenue, flat taxes). Forty-nine states and the District of Columbia imposed at least one health care-related tax in fiscal year 2024. Provider taxes currently must be below the threshold of 6% or less of net patient revenues. States and providers rely on provider taxes to fund essential services and provide care for Medicaid beneficiaries. States use these funds to support Medicaid coverage, such as children’s behavioral health services, maternal care and rehabilitative services, as well as to offset low Medicaid payment rates.&nbsp;This section freezes, at current rates and amount, states’ provider taxes in effect as of the date of enactment of this legislation and prohibits states from establishing new provider taxes. No federal matching funds would be allowed for state provider taxes imposed after the date of enactment, or any provider taxes that were increased (in amount or rate) after the date of enactment. The legislation also includes a provision that prohibits states from increasing the tax base by expanding items or services, or expanding the tax base to include providers that were previously not included. Our understanding is this would effectively cap provider taxes at the dollar amount in place on the date of enactment.&nbsp; &nbsp; &nbsp;AHA Position:&nbsp;The AHA is greatly concerned about the significant disruption this policy change will have on states’ ability to fund their Medicaid programs. We believe the proposed restrictions on provider taxes fail to recognize the critical role they play in closing significant gaps in the cost of care for essential services. By freezing the taxes, the proposal ignores circumstances that drive increased health care costs including inflation, increased labor and drug costs, increased utilization and increased population demand for services. The Committee’s proposal, based on our reading of the text, does not simply freeze provider percentage tax rates — it also appears to lock in the amount of dollars raised as of enactment of the law into perpetuity. Over time, the restrictions on this legitimate, vital funding tool will lead to diminished critical resources to support Medicaid beneficiaries.&nbsp;There are significant variations among the Medicaid programs, and this policy change will impact each state differently. We also are concerned that the Committee does not include any alternate funding mechanisms to replace the loss of federal support in the states due to the proposed restrictions placed on provider taxes.&nbsp;It is our belief that most states would be unable to close this financing gap created by further limiting their ability to tax providers; and as a result, they may need to make significant cuts to their Medicaid programs, including reducing eligibility, eliminating or limiting benefits and further reducing the chronic Medicaid underpayment rates for providers. In addition, states could address financial losses by limiting or eliminating non-mandatory benefits for all Medicaid beneficiaries, such as prescription drug coverage, clinic services, certain behavioral health services, home and community based services (HCBS), and physical and occupational therapy. We are committed to preserving hospital and health systems ability to care for Medicaid beneficiaries. We urge the committee to consider the long-term impact of this policy that will pull resources away from essential services upon which everyone in the community relies, including emergency, trauma, maternal and behavioral health care services.&nbsp;Section 44133. Revising the payment limit for certain state directed payments (SDPs).&nbsp;States may direct managed care plans to make additional payments to providers to pursue a state’s overall Medicaid program and quality goals. The 2024 Medicaid managed care final rule established new requirements for SDPs, including defining the requirements for SDP evaluation plans and setting the average commercial rate (ACR) as the upper payment limit for SDPs for inpatient and outpatient hospital services.&nbsp;This section directs the Department of Health and Human Services (HHS) to revise current regulations to limit SDPs for services furnished on or after the enactment of this legislation from exceeding the total published Medicare payment rate. This limit applies to SDP programs that were not in place on the date of enactment but does allow for SDP preprints that are in process with HHS to qualify at higher levels. Approved SDPs that are in place on the date of enactment are not subject to the limit, but states could not increase the SDP, and states would be required to submit a preprint for new or modified SDPs, and program renewals, for approval by the Centers for Medicare &amp; Medicaid Services (CMS).&nbsp;AHA Position:&nbsp;Supplemental payments are a longstanding, vital tool that states can use to mitigate the chronic underpayments caused by low base rates for services provided to Medicaid patients. SDPs are used to support essential hospital services in our communities, including behavioral health and obstetrical services, and to create incentives to improve quality and health outcomes. They are particularly important in rural areas, where hospitals are sometimes the sole source of care in a community.&nbsp;Setting limits on the amount that can be paid for SDPs into perpetuity will impact the delivery of care for both Medicaid beneficiaries as well as the larger communities served by our hospitals and health systems. Under this policy, funding for essential Medicaid supplemental payments will be frozen in time and will not keep up with year-over-year increases in health care costs. It is important to note that even when supplemental payments are included, Medicaid still pays less than the cost of providing care to Medicaid patients. For example, excluding supplemental payments, Medicaid fee for service payments paid less than 58 cents for every dollar hospitals spent caring for Medicaid patients in 2023, and Medicaid MCOs paid less than 65 cents over the same period. The Medicaid shortfall in hospital payments was $27.5 billion in 2023.<h2>OTHER KEY PROVISIONS&nbsp;</h2><h3>PART 1—MEDICAID&nbsp;</h3>Subpart A—Reducing Fraud and Improving Enrollment Processes&nbsp;Section 44101. Moratorium on implementation of rule relating to eligibility and enrollment in Medicare Savings Programs (MSPs).&nbsp;This section would rollback requirements in the “Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment” final rule, including those that: 1.) automatically enroll certain Supplemental Security Income (SSI) recipients in the Qualified Medicare Beneficiary (QMB) eligibility group of the MSP program; 2.) use data from the low-income subsidy program as an application for MSPs and align the family size definitions between the MSP and LIS programs; and 3.) accept self-attestation for certain types of income and resources.&nbsp; &nbsp;AHA Position:&nbsp;While the rule has not taken effect, the AHA is concerned about the potential loss of coverage and increase in uncompensated care that may result from delaying implementation.&nbsp;Section 44102. Moratorium on implementation of rule relating to eligibility and enrollment for Medicaid, CHIP, and the Basic Health Program.&nbsp;The legislation delays until Jan. 1, 2035, the implementation of the final rule, “Medicaid Program; Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes.” The final rule addressed several key barriers to accessing and maintaining coverage for eligible individuals, including individuals who are Aged (65+), Blind, or Disabled (ABD), dually eligible individuals, the medically needy, people receiving Long-Term Services and Supports (LTSS) or Home and Community Based Services (HCBS) and children with disabilities. Provisions of the rule included streamlining verification processes, limiting renewals to no more frequently than every 12 months for high-risk individuals (non-MAGI populations), and establishes minimum timelines for applicants to provide needed information. States must be in full compliance with the provisions of the rule by June 2027, and, therefore, several key provisions have not yet been implemented.&nbsp;This section prohibits HHS from implementing the rule for 10 years.&nbsp;AHA Position:&nbsp;While the rule has not taken effect, the AHA is concerned about the potential loss of coverage and increases in uncompensated care that may result from delaying implementation.Section 44108. Increasing frequency of eligibility redeterminations for certain individuals.&nbsp;This section requires states to conduct eligibility determinations for expansion population adults every six months. Current law currently requires such determinations to occur every 12 months.&nbsp;AHA Position:&nbsp;The AHA is concerned about the cost and additional administrative burden to the health care system, as well the potential loss of legitimate coverage, that may result from the policy change.&nbsp;Section 44110. Prohibiting federal financial participation (FFP) under Medicaid and CHIP for individuals without verified citizenship, nationality, or satisfactory immigration status.&nbsp;This section prohibits federal financial participation for Medicaid and CHIP enrollees in a reasonable opportunity period unless the individual successfully verifies their citizenship or immigration status. It is optional for states to provide coverage during the verification period.&nbsp;AHA Position:&nbsp;The AHA supports verification of citizenship and immigration status to qualify for Medicaid benefits, but we are concerned about the potential for a delay in coverage and care for individuals who would otherwise be eligible for the program.&nbsp;Section 44111. Reducing expansion FMAP for certain states providing payments for health care furnished to certain individuals.&nbsp;Federal funds for care provided to undocumented individuals is available in limited circumstances only. States can cover refugees and asylum seekers upon entering the U.S. (and being designated as such) for up to seven years. Additionally, states can reimburse hospitals for emergency care provided to individuals who meet other Medicaid eligibility requirements, but who do not have eligible immigration status.&nbsp;This section reduces by 10% the Federal Medical Assistance Percentage (FMAP) for Medicaid expansion states that use their Medicaid infrastructure or another state-based program to provide health care coverage to those who are not qualified aliens otherwise lawfully residing in the U.S. (i.e., undocumented immigrants), reducing the 90% match for a state’s expansion population to 80%.&nbsp;AHA Position:The AHA is concerned that lower FMAP for expansion states covering undocumented immigrants — with their own state funds — would have a substantial impact on hospitals, as it would lead to more uncompensated care and potentially lower provider payments in the affected states. It is important to note that hospitals are required to treat patients regardless of immigration status under EMTALA.&nbsp;<h3>Subpart B—Preventing Wasteful Spending&nbsp;</h3>Section 44121. Moratorium on implementation of rule relating to staffing standards for long-term care facilities under the Medicare and Medicaid programs.&nbsp;The “Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting” final rule established minimum nurse staffing requirements for long-term care facilities (LTCFs) of at least 3.48 hours of nursing care a day, including at least 0.55 hours of care from a registered nurse and 2.45 hours of care from a nurse aide, as well as the availability of a registered nurse onsite at a facility 24 hours a day, seven days a week. The rule goes into effect for urban facilities in 2027 and for rural nursing homes in 2029.&nbsp; &nbsp;On April 7, the U.S. District Court for the Northern District of Texas vacated the 2024 CMS minimum staffing standards for long-term care facilities.&nbsp;This section prohibits HHS from implementing the rule for 10 years.&nbsp;AHA Position:&nbsp;The AHA supports the rescission of this rule as it does not consider existing workforce shortages and could lead to additional challenges for hospitals to discharge patients to LTCFs. The AHA filed a friend-of-the-court brief in the case and last year urged CMS not to finalize the mandate but instead develop more patient- and workforce-centered approaches focused on ensuring a continual process of safe staffing in nursing facilities.&nbsp;Section 44122. Modifying retroactive coverage under the Medicaid and CHIP programs.&nbsp;Current statute requires that states cover Medicaid state plan services at least three months (90 days) prior to the month that the eligible individual applies for Medicaid coverage. Individuals must have been determined eligible for Medicaid at the time that they received the services within the retroactive coverage period. States can reduce or eliminate the retroactive coverage period through the Section 1115 demonstration waiver. This section limits retroactive coverage in Medicaid to one month prior to an individual’s application date.&nbsp;AHA Position: Limiting the scope of retroactive coverage would impact both patients and providers. We are reviewing this policy to better understand what implications it may have for patients’ access to care.&nbsp;<h3>Subpart C—Stopping Abusive Financing Practices</h3>Section 44131. Sunsetting eligibility for increased FMAP for new expansion states.&nbsp;The American Rescue Plan Act (ARPA) provided an opportunity for states to receive an additional five percentage point increase for their traditional FMAP if they choose to expand. The additional match would be in effect for two years after the state expanded. There was no set expiration for the FMAP increase. At the time ARPA was enacted, 12 states had not expanded Medicaid. Since then, two states, Missouri and Oklahoma, expanded Medicaid and received the full eight quarters of the FMAP increase, and two states are currently receiving the FMAP increase — North Carolina and South Dakota. There are 10 states that have not yet expanded their Medicaid program. This section sunsets the temporary 5% enhanced FMAP but would apply the policy prospectively, to not impact states currently receiving an enhanced federal match under this authority.&nbsp;AHA Position:&nbsp;The AHA has supported incentives for states to expand their Medicaid programs. It is unclear whether additional states will be using this incentive in the short term.&nbsp;Section 44134. Requirements regarding waiver of uniform tax requirement for Medicaid provider tax.&nbsp;This section modifies the requirements regarding uniformity of provider taxes and, specifically, whether a state’s tax is considered “generally redistributive.” Under the draft legislation, a tax is not considered generally redistributive if:&nbsp;<ul><li>Within a permissible class, lower Medicaid volume health care entities are taxed at a lower rate than higher Medicaid volume health care entities.</li><li>Within a permissible class, high Medicaid volume health care entities are taxed more heavily than non-Medicaid health care entities.</li><li>The tax excludes or imposes a lower tax rate on health care entities based upon Medicaid participation status, whether the term “Medicaid” is mentioned.&nbsp;</li></ul>AHA Position:&nbsp;We are concerned this policy change will undermine state Medicaid financing arrangements and could have implications for coverage disruption.&nbsp;<h3>Subpart D—Increasing Personal Accountability&nbsp;</h3>Section 44141. Requirement for states to establish Medicaid community engagement requirements for certain individuals.&nbsp;Under the prior Trump administration, many states sought to require some populations to demonstrate that they are working as a condition of eligibility for Medicaid. As of April 2025, Georgia is the only state to implement community engagement requirements as approved by CMS, although three states (Arizona, Arkansas, and Ohio) have waivers pending with the agency.&nbsp;This section establishes community engagement requirements for certain Medicaid beneficiaries. Beginning Jan. 1, 2029, states are required to establish community engagement requirements for non-exempt expansion adults aged 19-64. Individuals must work or engage in qualifying activities (e.g., community service, educational programs, job training) for not less than 80 hours/month. Mandatory exceptions include specified excluded individuals (e.g., caretakers, disabled veterans, medically frail individuals), individuals under the age of 19, pregnant or post-partum women, individuals enrolled in Medicare part A or part B, and institutionalized individuals. Optional exceptions for short-term hardship events include individuals receiving inpatient hospital services, nursing facility services, or inpatient psychiatric services; individuals in disaster zones; and individuals in areas with high unemployment. Compliance is verified during the initial eligibility determination, as well as part of subsequent eligibility redetermination, or more frequently as determined by the state. States may use data sources like payroll data to verify compliance. If the state is unable to verify that the individual has met the community engagement requirements, the individual will have 30 days to demonstrate compliance before they are disenrolled. States must determine whether an individual would qualify for Medicaid under other eligibility pathways before disenrolling. If an individual is eligible for Medicaid but is disenrolled due to not meeting community engagement requirements, that individual is not eligible for premium tax subsidies in the health care marketplace. The legislation provides $100 million in grants in fiscal year 2026 for system development.&nbsp;AHA Position:&nbsp;We appreciate that the Committee provided thoughtful criteria regarding those who should be subject to this provision.&nbsp;We are, however, concerned about the implementation challenges of reporting requirements and the option for states to conduct more frequent compliance checks than during the redetermination period. We would encourage more opportunities for beneficiaries to come into compliance before termination. In addition, we are concerned about the provision that those who are disenrolled due to failure to meet community engagement requirements would not be eligible for premium tax credits and, therefore, would not be able to afford coverage through their state’s marketplace.&nbsp;Some analysis indicates that community engagement requirements as a condition of coverage for the Medicaid population could result in loss of coverage. This also could result in additional uncompensated care for hospitals.&nbsp;Section 44142. Modifying cost sharing requirements for certain expansion individuals under the Medicaid program.&nbsp;Currently, states have the option to set cost-sharing requirements for certain enrollees above 100% of the federal poverty level (FPL). The maximum allowable deductible and copayment amounts are set by CMS, and can be applied to institutional care, non-institutional care, non-emergency use of the emergency department and prescription drugs services and supplies. For inpatient hospital care, for example, the maximum allowable copayment is $75 at 100% FPL, 10% of the cost the agency pays for 100150% FPL and 20% of the cost the agency pays for those who are above150% FPL. No out-of-pocket costs may be imposed for emergency services, family planning services, preventive services for children and pregnancy services. Out-of-pocket costs are capped at 5% of family income.&nbsp;This section requires states to impose cost sharing requirements at an amount greater than $0 and not exceeding $35 on Medicaid expansion enrollees. Total cost sharing may not exceed 5% of family income. States may allow providers to require payment as a condition of providing services, though providers may waive cost-sharing requirements on a case-by-case basis. The legislation would not permit cost-sharing on primary care, prenatal care, pediatric care, or emergency room care (except for nonemergency care provided in an emergency room).&nbsp;AHA Position:&nbsp;The AHA is concerned about the challenges providers face in collecting cost-sharing from low-income patients. We also are concerned that cost sharing requirements are both a burden on low-income patients and can be a significant barrier to coverage, particularly when consequences, such as potential loss of health care services, are applied for failure to pay.&nbsp;<h2>PART 2—AFFORDABLE CARE ACT&nbsp;</h2>Section 44201. Addressing waste, fraud, and abuse in the ACA exchanges.&nbsp;This section codifies most of the proposed policies in the 2025 Marketplace Integrity rule, including: shortening the Health Insurance Marketplace open enrollment period, removing the low-income special enrollment period, changing the premium adjustment percentage methodology, allowing insurers to require that enrollees pay past-due premiums before renewing coverage, implementing more stringent eligibility verification processes, disallowing DACA recipients to receive premium tax credits or cost-sharing reductions and prohibiting gender-affirming care as an essential health benefit. The draft legislation does not include the proposal that would improve transparency of agency, broker, and web-broker behavior, and varies in its language regarding the de minimus range, which impacts the value of coverage within each metal tier. The provisions within this section would take effect for plan years beginning on or after Jan. 1, 2026.&nbsp;AHA Position:&nbsp;The AHA is concerned that this section would codify parts of the rule that could impact coverage, including shortening the Health Insurance Marketplace open enrollment period, removing the low-income special enrollment period, changing the premium adjustment percentage methodology, allowing insurers to require that enrollees pay past-due premiums before renewing coverage and implementing more stringent eligibility verification processes. Coverage loss associated with these policies, combined with additional changes to the Medicaid program resulting in coverage loss, would have substantial consequences for patient access to care as well as the financial stability of hospitals, health systems and other providers.&nbsp;<h2>PART 3—IMPROVING AMERICANS’ ACCESS TO CARE&nbsp;</h2>Section 44302. Streamlined enrollment process for eligible out-of-state providers under Medicaid and CHIP.&nbsp;For purposes of improving access to necessary out-of-state care for children enrolled in Medicaid and CHIP, this section requires states to establish a process through which qualifying pediatric out-of-state providers may enroll as participating providers without undergoing additional screening requirements.&nbsp;AHA Position:&nbsp;The AHA supports efforts to improve access to care for Medicaid and CHIP beneficiaries.&nbsp;Section 44303. Delaying DSH reductions.This section delays the Medicaid Disproportionate Share Hospital (DSH) reductions, currently $8 billion reductions per year that are set to take effect for fiscal years 2026 through 2028, to instead take effect for fiscal years 2029 through 2031. This section also extends funding for Tennessee’s DSH program, which is set to expire at the end of this fiscal year, through fiscal year 2028.&nbsp;AHA Position:&nbsp;The AHA supports a delay in the start of the remaining DSH cuts.&nbsp;Section 44304. Modifying update to the conversion factor under the physician fee schedule under the Medicare program.&nbsp;This section applies a new single conversion factor for Physician Fee Schedule services under the Medicare program starting in 2026 (as opposed to the two distinct ones scheduled for implementation under current law: one for physicians participating in alternative payment models and another for those who are not). For 2026, the update to the single conversion factor would be 75% of the percentage increase in the Medicare Economic Index (MEI), for 2027 it would be 10% of the percentage increase in the MEI. This provision would not be retroactive.&nbsp;AHA Position:&nbsp;The AHA supports the Committee’s efforts to address payments for our nation’s physicians.&nbsp; Tue, 13 May 2025 13:58:44 -0500 Testimony AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 /testimony/2025-03-11-aha-statement-house-ways-and-means-subcommittee-health-hearing-march-11-2025 <div class="container"><div class="row"><div class="col-md-8"><h2>Statement of the �� Association for the Committee on Ways and Means Subcommittee on Health of the U.S. House of Representatives “After the Hospital: Ensuring Access to Quality Post-Acute Care” March 11, 2025</h2>On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and our 2,425 post-acute care members, the �� Association (AHA) appreciates the opportunity to submit this statement for the record to the Ways and Means Subcommittee on Health on the value of post-acute care and how Congress can better support patients’ access to these critical services.<h2>General Policy &amp; Regulatory Challenges</h2>Post-acute care is provided to patients who have been discharged from an acute-care hospital but still require services such as close medical supervision, nursing care, therapies and other support. Long-term care hospitals (LTCHs) act as a pressure relief valve for high-acuity patients needing extended hospital stays, thereby easing the burden on intensive care units (ICUs). Inpatient rehabilitation facilities (IRFs) assist patients recovering from life-changing illnesses like brain injuries, spinal cord injuries and amputations. Skilled nursing facilities (SNFs) offer rehabilitation therapy services aimed at strengthening patients and making them more independent before they return home. Home health agencies (HHs) enable seniors to remain independent by providing medical or non-medical care in their homes. Each of these facilities plays a crucial role across the continuum of care.While each specific post-acute sector faces unique challenges, there are several policy and regulatory issues that are universal.<h3>Medicare Advantage</h3>Medicare Advantage (MA) plans are an increasingly popular choice for older Americans, and measures must be taken to ensure that patients who require post-acute care services are able to access them in a timely manner. Perhaps the biggest challenge facing post-acute care providers and their patients is the ongoing restrictions that MA plans place on access to care. The issue has been well documented by providers as well as by Department of Health and Human Services Office of Inspector General and congressional investigations.<a href="#fn1">1</a>,<a href="#fn2">2</a> The prior authorization process used by MA plans places significant administrative burden on both acute-care hospitals and post-acute care providers. Perhaps more importantly, it is directly harmful to Medicare beneficiaries — at best delaying their care and at worst outright denying medically necessary treatment.MA plans’ practices have directly contributed to the growing discharge delay problems plaguing acute-care hospitals. While all beneficiaries have faced these delays, the increase in length of stay for MA beneficiaries seeking post-acute care has increased twice as much compared to Traditional Medicare beneficiaries. Specifically, the average length of stay (ALOS) prior to discharge to post-acute care settings has grown by 11.3% for MA patients between 2019 and 2024. However, for patients in Traditional Medicare, the ALOS has grown by only 5.2%, according to industry benchmark data from Strata Decision Technology, LLC.Despite steps taken by the Centers for Medicare &amp; Medicaid Services (CMS) in recent years, providers have seen little to no meaningful change in MA plan behavior and no increased access for beneficiaries. Additionally, post-acute care providers still face challenges with MA plans listing them within their networks. CMS should conduct regular audits to ensure that MA plans include robust post-acute care options with sufficient bed spaces and resources to provide the in-network care that patients need. As MA enrollment continues to grow, it is imperative that Congress continue to rein in these harmful practices to ensure that beneficiaries are not denied the care to which they are entitled.<h3>Ongoing Workforce Challenges</h3>The U.S. health care system is facing unprecedented workforce shortages, with the Bureau of Labor Statics estimating there will be 193,100 openings for nurses in each of the next 10 years.<a href="#fn3">3</a> For physicians, there could be a shortage of between 37,800 and 124,000 physicians by 2034 for both primary and specialty care.<a href="#fn4">4</a> Since mid-2020, post-acute care providers have seen a significant number of patient care technicians, registered nurses, and respiratory therapists, among other vital professionals, shifting employment to other organizations. Some post-acute care providers in rural areas have experienced significant challenges in filling open positions, sometimes going months without receiving an application for open registered nurses, licensed practical nurses, certified nursing assistants or key leadership roles. Staffing challenges jeopardize the ability of seniors to access the care they need and deserve.To ensure residents and families have access to high-quality care close to home, meaningful, long-term solutions and investments in workforce development must replace stop-gap measures, reimbursement cuts and punitive regulations. The AHA encourages Congress to pass the Conrad State 30 and Physician Access Reauthorization Act (S.709/H.R.1585) and the Healthcare Workforce Resilience Act, as well as support visa recapture initiatives and continue support for the Health Resources and Services Administration’s (HRSA) health professions and nursing workforce development programs.<h2>Sector Specific Comments</h2><h3>Long-Term Care Hospitals</h3>LTCHs play a unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. LTCHs offer an intensive, hospital-level of care that may not be available in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in LTCHs on average for at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care and extended stays. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened ICUs and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.In 2016, Congress put in place a dual-rate payment system under the LTCH prospective payment system (PPS) for Traditional Medicare beneficiaries.<a href="#fn5">5</a> This fundamental change in the payment system and other coinciding market factors dramatically reshaped the landscape of both LTCHs and the beneficiaries they serve. Since implementation of the dual-rate payment system, the volume of standard LTCH cases has fallen by approximately 70% from its peak under the legacy payment system and the number of LTCH providers also has decreased by 20%. At the same time, the average acuity of LTCH patients has risen by 20% or more in that same period, and these patients are increasingly consolidated into a limited number of Diagnosis-Related Groups (DRGs).<a href="#fn6">6</a> In addition, approximately one-third of all Medicare LTCH discharges nationally are paid the inpatient PPS-equivalent rate. However, these reimbursements fall well short of the cost of care. AHA’s analysis shows that as of fiscal year 2020 reimbursement for these cases totaled only 46% of the cost of care.<a href="#fn7">7</a> Finally, the growth of MA has further shrunk the patient population for LTCHs as MA plans routinely inappropriately deny access to LTCHs.The smaller, sicker patient population and dwindling reimbursement has created many challenges for LTCHs, as evidenced by the closure of so many of these facilities. The remaining patient pool is notably more acute and costly to treat, resulting in cases increasingly qualifying for high-cost outlier (HCO) payments to compensate for lack of precision in the DRGs as so many cases are consolidated into a limited number of DRGs. In 2016, the fixed-loss amount (FLA) for HCO cases, which is the amount of financial loss an LTCH must incur before qualifying for an HCO payment, was $16,423. Since that time, the FLA has risen by more than 300% to $77,048. This unsustainable figure puts LTCHs in the untenable position of having to lose tens of thousands of dollars in order to care for some of the sickest patients. Unfortunately, CMS has been unable to deviate from its current methodology to provide relief from this policy due to a congressional mandate to cap total outlier payments at 8% of total payments.<a href="#fn8">8</a>The AHA appreciates this Subcommittee’s awareness of the need to provide relief to the LTCH sector and supports efforts to provide additional flexibility and funding for HCO cases, and additional flexibility to provide care for different types of patients through the standard payment system.<h3>Inpatient Rehabilitation Facilities</h3>IRF patients are typically admitted directly from an acute-care hospital following a serious accident or illness such as stroke, brain injury, amputation or others that have resulted in serious functional deficits and medical complications. IRFs provide hospital-level care, which means they are closely supervised by a physician who also oversees patients’ overall rehabilitation. The intensive course of rehabilitation provided in IRFs must include a minimum of 15 hours per week of intensive therapy services involving multiple therapy disciplines, as well as around-the-clock specialized nursing care. This level of care is critical for debilitated patients who are stable enough to be discharged from the acute-care hospital to begin intensive rehabilitation but are at risk for medical complications without continued close medical management.The AHA continues to hear from IRFs regarding their concerns with CMS’ IRF Review Choice Demonstration (RCD). CMS initially created the IRF RCD to “assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud.” However, the agency never provided credible evidence to support its belief that there may be high rates of fraud in the IRF field — it only cited its improper payment rate for IRFs, which, as it knows, is not the same as fraud. Since being operationalized by the Biden administration in 2023, CMS has not subsequently provided any evidence that the IRF RCD has revealed or assisted in uncovering any fraud. Specifically, the demonstration currently subjects 100% of IRF claims to review in both Alabama and Pennsylvania. Yet, according to CMS’ <a href="https://www.cms.gov/files/document/irf-rcd-stats-fy-2024.pdf" target="_blank" title="CMS: Review Choice Demonstration for Inpatient Rehabilitation Facility Services (IRF RCD) Quarterly Updates. Fiscal Year 2024 (Oct 2023 – Sept 2024).">most recent data</a> collected during fiscal year 2024, approximately 90% of all claims reviewed have been approved. Of those, more than 95% were approved on the initial submission. Despite this high affirmation rate and lack of evidence of any fraud, CMS says it still plans to continue its expansion of the demonstration to more than half of all states and territories, subjecting hundreds of thousands of IRF claims annually to the burdensome manual medical review process. It has become clear that this demonstration is burdensome, diverts valuable clinical resources, and is not achieving its stated objective of uncovering or preventing fraud in the Medicare program.Therefore, the continued need for the IRF RCD remains highly dubious, and the AHA continues to encourage CMS and Congress to end this program.<h3>Skilled Nursing Facilities</h3>SNFs play another critical role for many hospitalized patients who need continued care after discharge. However, hospitals have faced increasing difficulty discharging patients to post-acute care settings, including SNFs. This challenge has largely been due to staffing shortages and the associated reduced capacity of SNFs and other providers. These shortfalls then place additional burden back on hospitals, including the need for hospitals to board patients until a discharge location can be found. Therefore, it is vital for the entire continuum of care, including for acute-care hospitals, that SNFs are properly resourced.The AHA and its members are committed to safe staffing to ensure high-quality, patient-centered care in all health care settings, including long-term care (LTC) facilities. Yet, the process of safely staffing any health care facility is about much more than achieving an arbitrary number set by regulation. It requires clinical judgment and flexibility to account for patient needs, facility characteristics, and the expertise and experience of the care team. The Biden administration’s one-size-fits-all minimum staffing rule for LTC facilities creates more problems than it solves and could jeopardize access to all types of care across the continuum, especially in rural and underserved communities that may not have the workforce levels to support these requirements.The AHA supports the Protecting America’s Seniors Access to Care Act (H.R. 1683) to prohibit the Department of Health and Human Services from implementing the provisions of the minimum staffing rule. We have recommended to CMS specific alternative strategies that take more patient- and workforce-centered approaches to ensuring LTC facilities have a strong foundation of policies and processes to continually assess, reassess and adjust their staffing levels. These strategies constitute starting points for further standards development, which we would encourage CMS to engage in with the assistance of patients and the entire health care continuum. Not only would these proposed alternatives support more timely and effective action by LTC facilities to address staffing challenges, but they also would be more consistent with modern clinical practice. Thus, repealing the Biden-era mandate would both protect patient access to care and allow for the development of more effective and clinically appropriate strategies to improve LTC patient outcomes.<h3>Home Health Agencies</h3>Approximately one in five hospitalized Medicare beneficiaries are discharged to HH.<a href="#fn9">9</a> These services alleviate pressure on hospitals, other post-acute care sites and caregivers, who would otherwise be responsible for these patients. HH agencies also can prevent rehospitalization by safely providing needed interventions at home thus avoiding potential complications and accidents.Over the last few years, the AHA has seen a strain on HH operations — along with other post-acute care providers — due to financial challenges, creating ripple effects throughout the continuum of care. Hospitals have seen the length of stay for patients being discharged to HH increase as they face increasing difficulty finding placements for these patients.<a href="#fn10">10</a> This has been due in large part to the reductions in reimbursement to HH providers put in place by CMS since its implementation of the new Medicare fee-for-service payment system in 2020. CMS determined it must permanently cut HH payments from between 4% to 8% annually in order to meet statutory budget neutrality requirements. In addition, CMS has indicated that it intends to recoup billions more in temporary reductions in the coming years. These payment reductions, paired with staffing shortages, and other administrative burdens and costs will continue to have serious implications for access to services for Medicare beneficiaries. The AHA is thankful for the Committee’s ongoing support of home health agencies.<h2>Conclusion</h2>Thank you for your leadership on these important issues and for the opportunity to provide comments. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.<hr><ol><li id="fn1">HHS, Office of Inspector General (OIG); Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (April 2022) (<a href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" target="_blank">https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a>).</li><li id="fn2"><a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a>.</li><li id="fn3">3<a href="https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6" target="_blank">https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6</a>.</li><li id="fn4">4<a href="https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage" target="_blank">https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage</a>.</li><li id="fn5">Bipartisan Budget Act Of 2013 (P.L. 113–67).</li><li id="fn6"><a href="/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries" target="_blank">/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries</a>.</li><li id="fn7"><a href="/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf" target="_blank">/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf</a>.</li><li id="fn8">Section 15009(b) of the 21ST Century Cures Act added section 1886(m)(7) to the Act.</li><li id="fn9">MedPAC; July 2024 Data Book; Section 8, Pg. 107 (<a href="https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf</a>).</li><li id="fn10"><a href="/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule" target="_blank">/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule</a>.</li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf" target="_blank" title="Click here to download the AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 PDF.">Download the Testimony PDF</a></div><a href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf"><img src="/sites/default/files/inline-images/Page-1-AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.png" data-entity-uuid="ef5df51a-efdf-417b-bd24-197ee16b5607" data-entity-type="file" alt="AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 page 1." width="695" height="900"></a></div></div></div> Tue, 11 Mar 2025 12:52:15 -0500 Testimony AHA Statement on Legislative Proposals to be Considered Before Energy and Commerce Committee On Sept. 18 /testimony/2024-09-18-aha-statement-legislative-proposals-be-considered-energy-and-commerce-committee-sept-18 <div class="container"><div class="row"><div class="col-md-8">On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) appreciates the opportunity to provide comments on legislative proposals that are to be considered before the Energy and Commerce Committee on Sept. 18.We would like to provide feedback on sections of H.R. 7623 as amended (H7623-FC-AINS_01.XML) and H.J. Res. 139.<h2>H.R. 7623, TELEHEALTH MODERNIZATION ACT</h2>The AHA supports two-year extensions for key telehealth flexibilities before they expire on Dec. 31, 2024, to maintain patients’ access to quality virtual care. We appreciate the committee’s commitment to ensuring that essential telehealth flexibilities are extended so that patients continue to receive access to high-quality care. The expansion of telehealth services has transformed care delivery, expanded access for millions of Americans and increased convenience in caring for patients, especially those with transportation or mobility limitations.In addition, the AHA supports Section 104 which would require dissemination of best practices to support individuals with limited English proficiency in accessing telehealth services, and Section 105, which would enable patients to receive in-home telehealth care for cardiac rehabilitation services administered from hospitals or hospital outpatient departments.AHA supports Section 102 to extend the hospital-at-home waiver for five years, through the end of 2029. Over the past few years, hospitals and health systems have expressed the need for long-term stability within the H@H program. Standing up a H@H program requires logistical and technical work, with an investment of time, staff and money. In addition to being approved for the federal waiver, some providers must navigate additional regulatory requirements at the state level. For some, this whole process could take a year or more to complete before the first patient can be seen at home.However, the AHA opposes Section 404 which would require a separate identification number and an attestation for each off-campus outpatient department of a provider.The AHA urges the committee to strike this section which would require that each off-campus hospital outpatient department (HOPD) be assigned a separate unique health identifier. Hospitals and other providers bill according to federal regulations, which require them to bill all payers — Medicare, Medicaid and private payers — using codes that indicate the location of where a service is provided. As a result, this provision would impose an unnecessary and onerous administrative burden on providers and needlessly increase Medicare program administrative costs.This section also would require that as a condition of payment, hospitals submit an attestation of compliance with the Medicare provider-based regulations for each of their off-campus HOPDs within two years of enactment. Given hospitals’ experience with review and approval of similar attestations in the past, we are concerned that this requirement would be extremely burdensome for hospitals and Medicare contractors and therefore urge the committee to reject this provision.H.J.Res.139, PROVIDING FOR CONGRESSIONAL DISAPPROVAL UNDER CHAPTER 8 OF TITLE 5, UNITED STATES CODE, OF THE RULE SUBMITTED BY THE CENTERS FOR MEDICARE &amp; MEDICAID SERVICES RELATING TO "MEDICARE AND MEDICAID PROGRAMS: MINIMUM STAFFING STANDARDS FOR LONG-TERM CARE FACILITIES AND MEDICAID INSTITUTIONAL PAYMENT TRANSPARENCY REPORTING”The AHA supports H.J.Res.139 for Congress to disapprove of this rule and prohibit the Secretary of Health and Human Services from implementing or enforcing this rule. The AHA and its members are committed to safe staffing to ensure high-quality, equitable and patient-centered care in all health care settings, including long-term care (LTC) facilities. Yet, the process of safely staffing any health care facility is about much more than achieving an arbitrary number set by regulation. The Centers for Medicare &amp; Medicaid Services’ (CMS) one-size-fits-all minimum staffing rule for LTC facilities creates more problems than it solves and could jeopardize access to all types of care across the continuum, especially in rural and underserved communities that may not have the workforce levels to support these requirements.We believe this final rule could exacerbate the already serious shortages of nurses and skilled health care workers across the care continuum. The agency estimates that 79% of LTC facilities would have to increase staffing to meet the proposed standards, including the new standard requiring 24/7 RN staffing. Considering the massive structural shortages described by recent studies, it is unclear from where this supply of nurses will come, and it is inconceivable that LTC facilities will be able to meet these standards without detrimental effects on workforce availability throughout the care continuum. Strengthening the health care workforce requires investment and innovation, not inflexible mandates.<h2>CONCLUSION</h2>Thank you for your consideration of the AHA’s comments on these legislative proposals. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.</div><div class="col-md-4"><a href="/system/files/media/file/2024/09/aha-statement-on-legislative-proposals-to-be-considered-before-energy-and-commerce-committee-sept-18-testimony-9-18-2024.pdf"><img src="/sites/default/files/inline-images/cover-aha-statement-on-legislative-proposals-to-be-considered-before-energy-and-commerce-committee-sept-18-testimony-9-18-2024.png" data-entity-uuid data-entity-type="file" width="654" height="849" alt=" AHA Statement on Legislative Proposals to be Considered Before Energy and Commerce Committee On Sept. 18 page 1."></a></div></div></div> Wed, 18 Sep 2024 00:06:14 -0500 Testimony AHA Statement to House Committee on Education and the Workforce for Markup Hearing Sept. 11, 2024 /testimony/2024-09-11-aha-statement-house-committee-education-and-workforce-markup-hearing-sept-11-2024 <div class="container"><div class="row"><div class="col-md-8">On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) appreciates the opportunity to provide comments on legislation to be considered during the committee’s executive session on Sept. 11, 2024. The AHA is providing feedback on the Healthy Competition for Better Care Act (H.R. 3120) and the Transparent Telehealth Bills Act of 2024 (H.R. 9457).<h2>Healthy Competition for Better Care Act (H.R. 3120)</h2>The AHA opposes the Healthy Competition for Better Care Act (H.R. 3120), which would lead to fewer choices for patients and further limit access to care, particularly for patients in urban, rural and other vulnerable communities.This bill includes harmful contracting provisions that would prevent doctors and hospitals from negotiating reasonable agreements with commercial health insurance plans. These contracting restrictions — known as tiering or steering — would allow insurers to make it more difficult for patients to choose their own doctors and hospitals by steering them to the providers the insurers own or favor. If passed, this bill would limit patient’s choice and ability to seek care with their preferred providers and hospitals in their communities.This bill also would allow large commercial insurers to make financially driven decisions about which hospitals in a network are under contract, enabling them to avoid hospitals serving vulnerable communities or those that serve sicker patients with serious or chronic conditions.The AHA is concerned that this bill could cause patients in underserved communities, including rural areas with high poverty rates, to lose access to care and health care coverage as insurers could decide the providers in a hospital network to avoid contracting with those in areas the insurer finds less financially desirable. Because providing health care in rural areas is typically more costly than in other areas, an insurer could force rural patients to go elsewhere for services. Forcing patients to travel long distances for care will lead to delays or missed medical attention.Additionally, this bill may increase rural hospital closures. If insurers are allowed to prevent rural patients from receiving services in their communities, local providers will be unable to cover high fixed operating costs. The resulting financial strain will lead to less access to care and fewer coverage options as insurance plans would not cover the local doctors and hospitals in those rural and high-poverty areas.Congress should not force providers to agree to unfair tiering and/or steering restrictions, which would allow commercial insurers to further undermine providers’ efforts to coordinate high-quality care. Commercial insurers cannot be allowed to profit from contracts premised on the provider’s capacity to serve its patients while simultaneously undermining them by encouraging patients to go elsewhere for care. These restrictions are unnecessary because studies show that the vast majority of health insurance marketplaces are highly concentrated. With commercial insurers already having such significant market power, they do not need Congress to grant them additional advantages through these contracting restrictions that will ultimately harm many patients’ access to quality care.<h2>Transparent Telehealth Bills Act of 2024 (H.R. 9457)</h2>The AHA opposes the Transparent Telehealth Bills Act of 2024 (H.R. 9457), which would cut hospital reimbursements since payment (including facility fees and any additional services) would be capped for facility-based providers at non-facility rates. Facility fees are for the direct and indirect costs that allow a hospital to continue to provide services to patients and serve the needs of their community. They support the high acuity and 24/7 standby capacity that only hospitals provide and for which payers do not cover the full cost.The cost of care delivered in hospitals and health systems recognizes the unique benefits they provide to their communities, which are not provided by other sites of care. This includes investments made to maintain standby capacity for natural and man-made disasters, public health emergencies and unexpected traumatic events, and delivering 24/7 emergency care to all who come to the hospital, regardless of ability to pay or insurance status. In addition, hospital facilities also must comply with a more comprehensive scope of licensing, accreditation and other regulatory requirements compared to other sites of care. These costs can amount to over $200 per patient, resulting in hospitals losing money when providing certain services.This is especially true for telehealth services. The expansion of telehealth over the past few years has transformed care delivery, improved access for millions of Americans and increased patient convenience. Given the current health care challenges across sites of care, including major clinician shortages, telehealth holds tremendous potential to leverage geographically dispersed provider capacity to support patient demand. The telehealth value propositions of improving access for geographically dispersed patients and maximizing provider capacity apply equally to facility settings (including hospitals and hospital outpatient departments) and non-facility professional settings. We are deeply concerned that reducing reimbursement for facility-based providers by establishing payment thresholds not to exceed the non-facility rates, will further limit the administration of virtual services for patients and communities.The originating site facility fee supports reimbursement for staff time (for nurses or other clinical staff to set up the video visit/equipment and proctor the visit), facility space and technology. For example, a patient physically located at a rural health clinic may require a specialty consult from a remote hospital-based provider, in which case the rural health clinic would be able to bill for the originating facility site facility fee to help cover the costs of the technology used in the visit (like secure software), the overhead for facility space (and therefore not available for other in-person appointments) and staff time to support the visit.Imposing these cuts would endanger the critical roles hospitals and health systems play in their communities, including providing access to care for patients.<h2>Conclusion</h2>Thank you for your consideration of the AHA’s comments on these legislative proposals. We look forward to working with you on these important issues.</div><div class="col-md-4"><a href="/system/files/media/file/2024/09/AHA-Statement-to-House-Committee-on-Education-and-the-Workforce-for-Markup-Hearing-Sept-11-2024.pdf" target="_blank" title="Click here to download the AHA Statement to House Committee on Education and the Workforce for Markup Hearing Sept. 11, 2024, PDF."><img src="/sites/default/files/inline-images/Page-1-AHA-Statement-to-House-Committee-on-Education-and-the-Workforce-for-Markup-Hearing-Sept-11-2024.png" data-entity-uuid="19fe0da6-b875-4a00-a74b-52318a9fd505" data-entity-type="file" alt="AHA Statement to House Committee on Education and the Workforce for Markup Hearing Sept. 11, 2024, page 1." width="692" height="900"></a></div></div></div> Wed, 11 Sep 2024 06:00:00 -0500 Testimony AHA Senate Statement for the Record on Health Care Transparency: Lowering Costs and Empowering Patients /testimony/2024-07-11-aha-senate-statement-record-health-care-transparency-lowering-costs-and-empowering-patients Statement of the �� Association for the Special Committee on Aging of the United States Senate “Health Care Transparency: Lowering Costs and Empowering Patients” July 11, 2024On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) writes to share the hospital field’s comments on health care costs and transparency.<h2>OVERVIEW OF NATIONAL HEALTH SPENDING</h2>America’s hospitals and health systems — physicians, nurses and other caregivers — understand and share concerns regarding the high cost of health care and are working hard to make care more affordable by transforming the way health care is delivered in our communities. Real change will require an effort by everyone involved, including providers, the government, employers and individuals, device makers, drug manufacturers, insurers and other stakeholders.The AHA’s most recent “<a href="/system/files/media/file/2024/05/Americas-Hospitals-and-Health-Systems-Continue-to-Face-Escalating-Operational-Costs-and-Economic-Pressures.pdf" target="_blank" title="Cost of Caring Report">Cost of Caring</a>” report provides greater details on the challenges hospitals face with respect to treating patients with higher acuities while dealing with financial instability. The issues include workforce shortages and increasing supply chain costs, coupled with inadequate reimbursement from government payers and increased administrative burden related to commercial insurance efforts to reduce compensation. Taken together, these factors create an environment of financial uncertainty in which many hospitals and health systems are operating with little to no margin.For this statement, we highlight two of the cost drivers incurred by hospitals and health systems: commercial insurer operating methods and prescription drug costs.<h3>Commercial Insurer Practices</h3>To truly reduce health care costs, we urge Congress to address practices by certain commercial health insurers. For example, additional oversight is needed to ensure that Medicare Advantage (MA) plans can no longer engage in tactics that restrict and delay access to care while adding burden and cost to the health care system.While MA plans were designed to help increase efficiency in the Medicare program, data from the Medicare Payment Advisory Commission (MedPAC) found that MA plans will be responsible for $88 billion in excess federal spending this year, due in part to inappropriate upcoding practices, whereby plans report enrollees as having more health conditions and being sicker than they are to receive higher reimbursements. At the same time, health insurance premiums continue to grow — in fact, annual insurance premiums increased nearly twice as much as hospital prices over a 10-year period.1Additionally, inappropriate denials for prior authorization and coverage of medically necessary services remain a pervasive problem among certain MA plans. A 2022 report from the Department of Health and Human Services (HHS) Office of Inspector General found that MA plans are denying at a high rate medically necessary care that met Medicare criteria.2 The report highlights that 13% of prior authorization denials and 18% of payment denials met Medicare coverage rules and therefore should have been approved. In a program this size — covering more than half of all Medicare beneficiaries — improper denials at this rate are unacceptable. However, because the government pays MA plans a risk-adjusted per-beneficiary capitation rate, there is a perverse incentive to deny services to patients or payments to providers to boost profits.These practices delay access to care for seniors and add financial burden and strain on the health care system through inappropriate payment denials and increased staffing and technology costs to comply with plan requirements. They also are a major burden to the health care workforce and contribute to provider burnout. To address these issues, the AHA supports regulatory and legislative solutions that streamline and improve prior authorization processes, including the Improving Seniors’ Timely Access to Care Act (S. 4532), which would codify many of the reforms in the Interoperability and Prior Authorization Final Rule.Though issues with denials are often felt most acutely with MA and Medicaid managed care plans, these practices also are followed by other commercial payers, where claims denials increased by 20.2% in 2023. Moreover, the time taken by commercial payers to process and pay hospital claims from the date of submission increased by 19.7% in 2023, according to data from the Vitality Index. For hospitals and health systems, these practices, which require hospitals to divert dollars away from patient care to instead focus on seeking payment from commercial insurers, result in billions of dollars in lost revenue each year.3 Without further intervention, these trends are expected to continue and worsen. National expenditures on the administrative costs of private health insurance spending alone are projected to account for 7% of total health care spending between 2022 and 2031 and are projected to grow faster than expenditures for hospital care.4<h3>Prescription Drug Prices</h3>Congress also should address the high costs of prescription medications, given the regular increases in costs, as this impacts expenses for all providers, including hospitals. For instance, a report from earlier this year noted pharmaceutical companies raised list prices on 775 brand name drugs during the first half of January 2024, with a median increase of 4.5%, though the prices of some drugs rose by 10% or higher.5 These increases were higher than the rate of inflation, which was 3.4% in December. A report by the HHS Assistant Secretary for Planning &amp; Evaluation (ASPE) found that between 2022 and 2023 drug companies increased drug prices for nearly 2,000 drugs faster than the rate of general inflation, with an average price hike of 15.2%.6Moreover, recent drug shortages also have fueled further expense growth. An ASPE report found up to a 16.6% increase in the prices of drugs in shortage; in many cases, the increase in the price of substitute drugs were at least three times higher than the price increase of the drug in shortage.7 The costs incurred as a result of drug shortages are compounded by staff overtime needed to find, procure and administer alternative drugs, to manage the added challenges of multiple medication dispensing automation systems and changing electronic health records and to undergo training to ensure medication safety using alternative therapies.8<h2>MEDICAL DEBT</h2>Hospitals and health systems are very concerned about patients’ medical debt, which is a consequence of patients not paying some or all their health care bills. While health insurance is intended to be the primary mechanism to protect patients from unexpected and unaffordable health care costs, for too many that coverage is either unavailable or falling short.Trends in health insurance coverage that are driving an increase in medical debt include inadequate enrollment in comprehensive health care coverage, growth in high-deductible and skinny health plans that intentionally push more costs onto patients and misleading health plan practices that confuse patients’ understanding of their coverage. These gaps in coverage leave individuals financially vulnerable when seeking medical care. The primary causes of medical debt are:<ul><li>There are still too many uninsured Americans. Affordable, comprehensive health care coverage is the most important protection against medical debt. While the U.S. health care system has achieved higher rates of coverage over the past decade, gaps remain.</li><li>High-deductibles subject many Americans to cost-sharing they cannot afford. High-deductible plans are designed to increase patients’ financial exposure through high cost-sharing in exchange for lower monthly premiums. Yet many individuals enrolled in high-deductible plans find they cannot manage their portion of health plan expenses. A Federal Reserve report found that 37% of adults would not be able to afford a $400 emergency,9 an amount $1,000 less than the average general annual deductible for single, employer-sponsored coverage.</li><li>Certain health plans provide inadequate benefits and frequently lead to surprise gaps in coverage. Short-term, limited-duration health plans and health sharing ministries cover fewer benefits and include few to no consumer protections, such as required coverage of pre-existing conditions and limits on out-of-pocket costs. Patients with these types of plans often find themselves responsible for their entire medical bill without any help from their health plan, including for critical services such as emergency medical and oncology care. These denials can lead to an accumulation of significant medical debt.10</li><li>Complex health plan benefit design and misleading marketing can expose patients to unexpected costs. Many health plans have complex benefit designs that are not transparent to patients, such as what is covered pre-deductible, the interaction between point-of-service copays, coinsurance and deductibles and poor communication and education about what the plan covers. For example, a recent National Association of Insurance Commissioners report found significant gaps and inconsistencies with the way that insurers share information about pre-deductible, no cost-sharing preventive services with their members, resulting in a “meaningful barrier to effective understanding and use of preventive service benefits.”11</li></ul>Hospitals are the only part of the health care sector that provide services to patients regardless of their ability to pay. They underscore that commitment by offering financial and other assistance, including helping patients qualify for federal and state health care programs, such as Medicaid. In doing so, patients can receive regular preventive care, not just episodic care for serious injuries or illness. In addition, hospitals absorb billions of dollars of losses for patients who are unable to pay their bills, mainly due to inadequate commercial insurance coverage; in 2020, the latest figure available, hospitals provided more than $42 billion in uncompensated care.12This is why hospitals are staunch supporters of ensuring everyone is enrolled in some form of comprehensive coverage. However, we appreciate that closing the remaining coverage gaps may be a longer-term solution and that more immediate steps can be taken. To that end, the AHA has routinely developed patient billing guidelines to help prevent patients from incurring medical debt. The AHA’s Board of Trustees adopted the most recent <a href="/standardsguidelines/2020-10-15-patient-billing-guidelines" target="_blank">set of guidelines</a> in 2020, which reaffirm the hospital field’s commitment to:<ul><li>Treating all people equitably, with dignity, respect and compassion.</li><li>Serving the emergency health care needs of all, regardless of a patient’s ability to pay.</li><li>Assisting patients who cannot pay for part or all the care they receive.</li></ul>Notably, several of the guidelines directly address medical debt, including encouraging hospitals to forego adverse credit reporting of medical debt. So far, nearly 2,800 hospitals and health systems have affirmed their commitment to the guidelines, and the AHA revisits them regularly for updating.<h2>PRICE TRANSPARENCY REQUIREMENTS</h2>We appreciate Congress’ ongoing interest in hospital price transparency to provide consumers with the price information they need specific to their course of treatment.Hospitals and health systems have invested considerable time and resources to comply with the Hospital Price Transparency Rule, which requires online access to both a machine-readable file and a list of shoppable services. Recent data from Turquoise Health shows that 93.4% of hospitals have met the requirement to post a machine-readable file.We are concerned, however, with recent legislative efforts to no longer recognize price estimator tools as a method to meet the shoppable services requirement. This change would both reduce access to a consumer-friendly research tool and unfairly penalize hospitals that have spent significant capital to comply with the regulation. These facilities would instead need to develop and maintain a shoppable services spreadsheet, which may be difficult for consumers to navigate and will not reflect the different policies that their insurer may apply to determine the final price for a service. Price estimator tools offer consumers an estimate of their out-of-pocket costs based on their insurance benefit design, such as cost-sharing requirements and prior utilization, as well as the patient’s annual deductible. This is an important feature of these tools that is not available from a shoppable services spreadsheet. Eliminating the use of price estimator tools as a method to meet the shoppable services requirement of the Hospital Price Transparency Rule would therefore reduce price transparency for patients. We urge Congress to reject this potential change.As Congress seeks to make statutory changes to price transparency standards, it is important for legislators to take into consideration the adjustments to the Hospital Price Transparency Rule made by the Centers for Medicare &amp; Medicaid (CMS) on a regular basis. These include changes related to standardization, new data elements, file accessibility, an accuracy and completeness affirmation, as well as changes to CMS’ monitoring and enforcement processes. Most notably, CMS now requires hospitals to use a standard format to comply with the machine-readable file requirement, which includes new data elements such as negotiated rate contracting type or methodology, an accuracy and completeness affirmation and (as of January 1, 2025) an “estimated allowed amount.” CMS also now requires that hospitals’ price transparency information be more easily found on their websites.Regarding compliance and enforcement, hospitals may be required to have an authorized hospital official certify the accuracy and completeness of the hospital’s machine-readable file during the monitoring and enforcement process. CMS also can require hospitals to provide additional documentation at the agency’s request, including contracting documentation needed to validate the hospital’s negotiated rates and verification of the hospital’s licensing status.In addition, CMS increased its efforts to publicize hospital-specific information on all compliance assessment and enforcement activity, which it now updates regularly on a public website. This includes details related to CMS’ assessment of hospital compliance, any compliance actions taken against a specific hospital, the status of the compliance action(s) and the outcome of the action(s). A list of the civil monetary compliance notices and fines issued to date is available on the CMS website.13 The fines vary in scope, from $55,000 to nearly $1 million, for those hospitals that have been deemed out of compliance with the Hospital Price Transparency Rule. CMS clearly has the authority and willingness to enforce compliance with the rule and assess significant fines, regardless of statutory activity.<h2>CONCLUSION</h2>Thank you for your consideration of the AHA’s comments on issues related to health care expenditures. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.__________1 <a class="ck-anchor" id="https://www.medpac.gov/wp-content/uploads/2023/10/MedPAC-MA-status-report-Jan-2024.pdf" href="https://www.medpac.gov/wp-content/uploads/2023/10/MedPAC-MA-status-report-Jan-2024.pdf">https://www.medpac.gov/wp-content/uploads/2023/10/MedPAC-MA-status-report-Jan-2024.pdf</a>&nbsp; 2 <a class="ck-anchor" id="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf">https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a> 3 <a class="ck-anchor" id="https://www.ama-assn.org/practice-management/prior-authorization/health-systems-plagued-payer-takeback-schemes-110000#:~:-%20text=authorization%E2%80%99s%20financial%20impact-,Prior%20authorization%E2%80%99s%20financial%20impact,an%20increase%20of%2067%.%E2%80%9D" href="https://www.ama-assn.org/practice-management/prior-authorization/health-systems-plagued-payer-takeback-schemes-110000#:~:-%20text=authorization%E2%80%99s%20financial%20impact-,Prior%20authorization%E2%80%99s%20financial%20impact,an%20increase%20of%2067%.%E2%80%9D">https://www.ama-assn.org/practice-management/prior-authorization/health-systems-plagued-payer-takeback-schemes-110000#:~:-%20text=authorization%E2%80%99s%20financial%20impact-,Prior%20authorization%E2%80%99s%20financial%20impact,an%20increase%20of%2067%.%E2%80%9D</a>&nbsp; 4 AHA analysis of NHE projections of 2022-2031 expenditures. 5 <a class="ck-anchor" id="https://www.wsj.com/health/pharma/drugmakers-raise-prices-of-ozempic-mounjaro-and-hundreds-of-other-drugs-bdac7051" href="https://www.wsj.com/health/pharma/drugmakers-raise-prices-of-ozempic-mounjaro-and-hundreds-of-other-drugs-bdac7051">https://www.wsj.com/health/pharma/drugmakers-raise-prices-of-ozempic-mounjaro-and-hundreds-of-other-drugs-bdac7051</a>&nbsp; 6 <a class="ck-anchor" id="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs" href="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs">https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs</a>&nbsp; 7 <a class="ck-anchor" id="https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs" href="https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs">https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs</a>&nbsp; 8 <a class="ck-anchor" id="https://link.springer.com/article/10.1007/s13181-023-00950-6#:~:text=Shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D." href="https://link.springer.com/article/10.1007/s13181-023-00950-6#:~:text=Shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D.">https://link.springer.com/article/10.1007/s13181-023-00950-6#:~:text=Shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D.</a>&nbsp; 9 <a class="ck-anchor" id="https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm" href="https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm">https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm</a>&nbsp; 10 <a class="ck-anchor" id="https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/" href="https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/">https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/</a>&nbsp; 11 <a class="ck-anchor" id="https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented" href="https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented">https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented</a>&nbsp; 12 <a class="ck-anchor" id="/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf" href="/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf">/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf</a> 13 <a class="ck-anchor" id="https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/enforcement-actions" href="https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/enforcement-actions">https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/enforcement-actions</a>&nbsp; Thu, 11 Jul 2024 13:11:00 -0500 Testimony AHA Senate Statement on What Can Congress Do to End the Medical Debt Crisis in America /testimony/2024-07-10-aha-senate-statement-what-can-congress-do-end-medical-debt-crisis-america Statement of the �� Association for the Committee on Health, Education, Labor &amp; Pensions of the United States Senate “What Can Congress Do to End the Medical Debt Crisis in America?” July 11, 2024 &nbsp;On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) writes to share the hospital field’s comments on medical debt. While we appreciate Congress’s interest in addressing medical debt, we encourage policymakers to do more to prevent patients from incurring this type of debt, rather than focusing on credit reporting and alleviating acquired debt.<h2>OVERVIEW OF MEDICAL DEBT</h2>More Americans than ever are dealing with medical debt, a consequence of patients not paying some or all their health care bills, despite benefiting from the highest levels of insurance coverage in history. Unlike other types of debt, medical debt can be unexpected, due to an accident or illness. These debts can impact patients’ abilities to pay for necessities, including food, clothing and household items, and can result in patients using savings or loans to address their medical debt. Recent polling by the KFF found that “41% of adults have health care debt according to a broader definition, which includes health care debt on credit cards or owed to family members.”1 The survey also showed that:<ul><li>U.S. residents owe at least $220 billion in medical debt.</li><li>Approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt.</li><li>About three million people (1% of adults) owe medical debt of more than $10,000.</li></ul>Hospitals and health systems are very concerned about patients’ medical debt. While health insurance is intended to be the primary mechanism to protect patients from unexpected and unaffordable health care costs, for too many that coverage is either unavailable or insufficient. Trends in health insurance coverage that are driving an increase in medical debt include inadequate enrollment in comprehensive health care coverage, growth in high-deductible and skinny health plans that intentionally push more costs onto patients and misleading health plan practices that confuse patients’ understanding of their coverage. These gaps in coverage leave individuals financially vulnerable when seeking medical care. The primary causes of medical debt include the following.<ul><li>There are still too many uninsured Americans. Affordable, comprehensive health care coverage is the most important protection against medical debt. While the U.S. health care system has achieved higher coverage rates over the past decade, gaps remain.</li><li>High deductibles subject many Americans to cost-sharing they cannot afford. High-deductible plans are designed to increase patients’ financial exposure through high cost-sharing in exchange for lower monthly premiums. Yet many individuals enrolled in high-deductible plans find they cannot manage their portion of health plan expenses. A Federal Reserve report found that 37% of adults could not afford a $400 emergency, an amount $1,000 less than the average general annual deductible for single, employer-sponsored coverage.2</li><li>Certain health plans provide inadequate benefits that frequently lead to surprise gaps in coverage. Short-term, limited-duration health plans and health-sharing ministries cover fewer benefits and include few to no consumer protections, such as required coverage of pre-existing conditions and limits on out-of-pocket costs. Patients with these types of plans often find themselves responsible for their entire medical bill without help from their health plan, including critical services such as emergency medical and oncology care. These denials can lead to an accumulation of significant medical debt.3</li><li>Complex health plan benefit design and misleading marketing can expose patients to unexpected costs. Many health plans have complex benefit designs that are not transparent to patients, such as what is covered pre-deductible, the interaction between point-of-service copays, coinsurance and deductibles, and poor communication and education about what the plan covers. For example, a recent National Association of Insurance Commissioners report found significant gaps and inconsistencies in how insurers share information about pre-deductible, no-cost-sharing preventive services with their members, resulting in a “meaningful barrier to effective understanding and use of preventive service benefits.”4</li></ul><h2>HOSPITALS AND HEALTH SYSTEMS ADDRESSING DEBT</h2>Hospitals are the only part of the health care sector that provide services to patients regardless of their ability to pay. They underscore that commitment by offering financial and other assistance, including helping patients qualify for federal and state health care programs, such as Medicaid. In doing so, patients can receive regular preventive care, not just episodic care for serious injuries or illnesses. In addition, hospitals absorb billions of dollars of losses for patients who cannot pay their bills, mainly due to inadequate commercial insurance coverage; in 2020, the latest figure available, hospitals provided more than $42 billion in uncompensated care.5This is why hospitals are staunch supporters of ensuring everyone is enrolled in some form of comprehensive coverage. However, we appreciate that closing the remaining coverage gaps may be a longer-term solution and that more immediate steps can be taken. To that end, the AHA has routinely developed patient billing guidelines to help prevent patients from incurring medical debt. The AHA’s Board of Trustees adopted the most recent <a href="/standardsguidelines/2020-10-15-patient-billing-guidelines" target="_blank">set of guidelines</a> in 2020, which reaffirm the hospital field’s commitment to:<ul><li>Treating all people equitably, with dignity, respect and compassion.</li><li>Serving the emergency health care needs of all, regardless of a patient’s ability to pay.</li><li>Assisting patients who cannot pay for part or all the care they receive.</li></ul>Tax-exempt hospitals are also subject to a federal statute that requires written financial assistance and debt collection policies. These hospitals must wait at least 120 days after sending the initial bill to initiate extraordinary collections actions, notify the patient at least 30 days before taking the collections action and allow patients to submit financial aid applications for up to 240 days following the initial bill.Several of the AHA’s guidelines directly address medical debt, including encouraging hospitals to forego adverse credit reporting of outstanding patient bills. So far, nearly 2,800 hospitals and health systems have affirmed their commitment to the guidelines, and the AHA revisits them regularly for updates.Some hospitals are taking additional steps to help all eligible patients afford their medical bills, including using programs originally intended for the uninsured. These “presumptive eligibility” endeavors include proactively screening patients for financial assistance eligibility, regardless of insurance coverage or whether a patient has completed a financial aid application. The goal is to limit the need for hospitals to seek repayment by reducing patients’ financial liability to a more affordable amount.<h2>FEDERAL OVERSIGHT OF MEDICAL DEBT</h2>Policymakers at the federal level have acted to address the burden of medical debt through statutory changes, such as collection practices of tax-exempt hospitals, as well as those made through the Fair Debt Collection Practices Act, as overseen by the Consumer Financial Protection Bureau (CFPB), which impact how medical debt is displayed on credit reports. Recently, CFPB issued medical debt payment products and medical debt collection practices requests for information and a proposed rule to ban credit reporting agencies from incorporating medical debt when calculating credit scores.While hospitals and health systems are assisting patients with their bills, policymakers must do more to prevent them from incurring these debts. Rather than focusing on debt relief grants or putting additional administrative burdens on providers, Congress must ensure patients can access comprehensive, affordable health insurance products.Some of these suggested changes include:<ul><li>&nbsp;Restricting the sale of high-deductible health plans to only those individuals with the demonstrated means to afford the associated cost-sharing.</li><li>Prohibiting the sale of health-sharing ministry products and short-term limited-duration plans that go longer than 90 days.</li><li>Lowering the maximum out-of-pocket cost-sharing limits.</li><li>Eliminating the use of deductibles and co-insurance, and instead relying solely on flat co-payments which are easier for patients to anticipate and for providers to administer.</li><li>Removing providers from the collection of cost-sharing by requiring health plans to collect directly from their enrollees the cost-sharing payments they impose. This approach would eliminate most patient bills from providers altogether.</li></ul>Congress could also do more to improve health literacy by funding health navigators, community health workers and financial advisors to assist patients in selecting appropriate health insurance products.<h2>CONCLUSION</h2>Thank you for your consideration of the AHA’s comments on issues related to medical debt. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.__________1 <a class="ck-anchor" id="https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/" href="https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/">https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/</a>&nbsp; 2 <a class="ck-anchor" id="https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm" href="https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm">https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm</a> 3 <a class="ck-anchor" id="https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/" href="https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/">https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insurance-regulators/</a>&nbsp; 4 <a class="ck-anchor" id="https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented/" href="https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented/">https://healthyfuturega.org/ghf_resource/preventive-services-coverage-and-cost-sharing-protections-are-inconsistently-and-inequitably-implemented/</a>&nbsp; 5 <a class="ck-anchor" id="/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf" href="/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf">/system/files/media/file/2020/01/2020-Uncompensated-Care-Fact-Sheet.pdf</a>&nbsp; &nbsp; Wed, 10 Jul 2024 12:11:44 -0500 Testimony AHA House Statement on “Improving Value-Based Care for Patients and Providers” /testimony/2024-06-26-aha-house-statement-improving-value-based-care-patients-and-providers �� Association for the Committee on Ways and Means Subcommittee on Health of the U.S. House of Representatives “Improving Value-Based Care for Patients and Providers” June 26, 2024On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) appreciates the opportunity to provide feedback on the transition to value-based care.<h2>THE ROLE OF ALTERNATIVE PAYMENT MODELS IN VALUE-BASED CARE</h2>Our members support the U.S. health care system moving toward the provision of more outcomes-based, coordinated care and are continuing to redesign delivery systems to increase value and better serve patients. Over the last 14 years, many of our hospital and health system members have participated in a variety of alternative payment models (APMs).While the movement to value holds tremendous promise, the transition has been slower than anticipated and more needs to be done to drive long-term system transformations.There are principles that we believe should guide the development of APM design to make participation more attractive for potential participants. These include:<ul><li>Appropriate On-ramp and Glidepath to Risk. Model participants should have an adequate on-ramp and glidepath to transition to risk. They must have adequate time to implement care delivery changes (integrating new staff, changing clinical workflows, implementing new analytics tools, etc.) and review data prior to initiating the program.</li><li>Adequate Risk Adjustment. Models should include adequate risk adjustment methodologies to account for social needs and clinical complexity. This will ensure models do not inappropriately penalize participants treating the sickest, most complicated and underserved patients.</li><li>Voluntary Participation and Flexible Design. Model designs should be flexible, incorporating features such as voluntary participation, the ability to choose individual clinical episodes, the ability to add components/waivers and options for participants to leave the model(s).</li><li>Balanced Risk Versus Reward. Models should also balance the risk versus reward in a way that encourages providers to take on additional risk but does not penalize those that need additional time and experience before they are able to do so. A glidepath approach should be implemented, gradually migrating from upside only to downside risk.</li><li>Guardrails to Ensure Hospitals Do Not Compete Against Their Own Best Performance. Models should provide guardrails to ensure that participants are not penalized over time when they achieve optimal cost savings and outcomes performance. Participants must have incentives to remain in models for the long-term.</li><li>Resources to Support Initial Investment. Upfront investment incentives should be provided to support organizations in their transition to value-based payment. For example, to be successful in such models, hospitals, health systems and provider groups must invest in additional staffing and infrastructure to support care delivery redesign and outcomes tracking.</li><li>Transparency. Models’ methodology, data and design elements should be transparently shared with all potential participants. Proposed changes should be vetted with stakeholders.</li><li>Adequate Model Duration. Models should be long enough in duration to truly support care delivery transformation and assess the impact on outcomes. Historically, models have been too short and/or have had multiple, significant design changes even within the designated duration, making it difficult for participants to self-evaluate and change course when necessary.</li><li>Timely Availability of Data. Model participants should have readily available, timely access to data about their patient populations. We would encourage the dedication of resources from the Centers for Medicare &amp; Medicaid Services (CMS) (staff and technology) to provide program participants with more complete data as close to real-time as possible.</li><li>Waivers to Address Barriers to Clinical Integration and Care Coordination. This entails waiving Medicare program regulations that frequently inhibit care coordination and work against participants’ efforts to ensure that care is provided in the right place at the right time.</li></ul><h2>POLICIES TO SUPPORT HOSPITAL TRANSITIONS TO VALUE-BASED CARE</h2>Extension of Advanced APM Incentive Payments. The bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was also intended to support the transition to value-based care. MACRA provided advanced incentive payments (5%) for providers participating in advanced APMs through 2024. These payments were designed to assist with the provision of non-fee-for-service programs like meal delivery programs, transportation services, digital tools and care coordinators which promote population health, among other services.However, MACRA statute only provided the advanced APM bonuses through the calendar year (CY) 2024 payment period. We appreciate Congress acting through a provision in the Consolidated Appropriations Act (CAA) of 2023 to extend the advanced APM incentive payments at 3.5% for the CY 2025 payment period and again in the CAA of 2024 to extend through 2026 at 1.88%.While lower than the current 5% incentive payment rate, the incentive provides crucial resources. Because participation in the advanced APM program has fallen short of initial projections, spending on advanced APM bonuses has fallen well short of the amount the Congressional Budget Office projected when MACRA was originally scored. Repurposing the spending shortfall for APM bonuses in future years will serve to accelerate our shared goal of increasing APM adoption. We urge the extension of these incentive payments.Eliminate Low-Revenue/High-Revenue Qualifying Criteria. Congress also should urge CMS to eliminate its designation of ACOs as either low- or high-revenue. The agency has used this label as a proxy measure to, for example, determine if an organization is supporting underserved populations and/or if the organization is physician-led to qualify for advance investment payments. Yet, there is no valid reason to conclude that this delineation, which measures an accountable care organization’s (ACO) amount of “captured” revenue, is an accurate or appropriate predictor of whether it treats an underserved region. In fact, analysis suggests that critical access hospitals, federally qualified health centers and rural health centers are predominantly classified as high-revenue. Further, both low- and high-revenue ACOs are working to address health equity as part of their care transformation work; assistance investing in these efforts would help across the board. We urge the removal of problematic high/low revenue thresholds that preclude rural and critical access hospitals from obtaining necessary resources for infrastructure investment.Support Investment in Resources for Rural Hospitals. Congress should encourage CMS to continue its resources and infrastructure investment to support rural hospitals’ transition to APMs. According to a Government Accountability Office report, only 12% of eligible rural providers in 2019 participated in the advanced APM program; of those that participated, just 6% of rural providers participated in two or more advanced APMs, compared to 11% of those not in rural areas. These models are often not designed in ways that allow broad rural participation, and the AHA supports continued efforts to better support rural hospitals’ migration to advanced APM models. In particular, the AHA since 2021 has supported the establishment of a Rural Design Center within the Center for Medicare and Medicaid Innovation (CMMI), which would focus on smaller-scale initiatives to meet rural communities’ needs and encourage participation of rural hospitals and facility types. A Rural Design Center would help develop and increase the number of new rural-focused CMMI demonstrations, expand existing rural demonstrations and create separate rural tracks within new or existing CMMI models.We support the Value in Health Care Act (H.R. 5013/S. 3503), which would extend incentive payments, remove revenue distinctions and improve financial benchmarks to ensure participants are not penalized for success.<h2>RECENT CENTER FOR MEDICARE AND MEDICAID INNOVATION (CMMI) MODELS</h2>Proposed Transforming Episode Accountability Model. On April 10, as part of the inpatient prospective payment system (PPS) proposed rule, the CMMI proposed a new mandatory payment model — Transforming Episode Accountability Model (TEAM) — that would bundle payment to acute care hospitals for five types of surgical episode categories: coronary artery bypass graft, lower extremity joint replacement, major bowel procedure, surgical hip/femur fracture treatment and spinal fusion. It would make acute care hospitals responsible for the quality and cost of all services provided during select surgical episodes, from the date of inpatient admission or outpatient procedure through 30 days post-discharge.The AHA has significant concerns with the TEAM payment model. We are supportive of the Department of Health and Human Services Secretary’s goal of moving toward more accountable, coordinated care through new APMs. However, CMS is proposing to mandate a model that has significant design flaws, and as proposed places too much risk on providers with too little opportunity for reward in the form of shared savings, especially considering the significant upfront investments required. If CMS cannot make extensive changes to the model, it should not implement it at this time. To do so would make TEAM no more than a thinly disguised payment cut, as it fails to provide hospitals a fair opportunity to achieve enough savings to garner a reconciliation payment.The proposal does not align with the principles we outlined above. For example, we have previously commented on the necessity for waivers to support care coordination, more gradual glidepaths to two-sided risk and reasonable discount factors to ensure financial viability. If anything, TEAM is a step backward with fewer waivers, shorter timelines to assume downside risk and more aggressive discount factors that make cost savings more challenging.Moreover, the tremendous scope of this rule and its aggressive 60-day comment period made it challenging to fully evaluate and analyze the proposal and its significant impact on hospitals and health systems. The five types of surgical procedures proposed for inclusion in TEAM comprise over 11% of inpatient PPS payments in 2023 — a staggering amount that does not even include the outpatient payments that would be at risk as part of the model. While the AHA worked closely with our hospital and health system members to assess the potential impact of TEAM on the important work they do in caring for their patients and communities, the incredibly short comment period severely hampered our ability to provide comprehensive comments.We strongly recommend that CMS make TEAM voluntary, lower the 3% discount factor and make several changes to problematic design elements.Proposed Increasing Organ Transplant Access Model. Just four weeks after TEAM was proposed, CMS proposed another mandatory payment model for kidney transplants. The Increasing Organ Transplant Access (IOTA) model would test whether performance-based incentives or penalties for participating transplant hospitals would increase access to kidney transplants for patients with end-stage renal disease while preserving or enhancing quality of care, improving equitable access to kidney transplant care and reducing Medicare expenditures. The model would run for six years, beginning Jan. 1, 2025. Hospitals eligible for participation would include non-pediatric transplant facilities conducting at least 11 kidney transplants during a three-year baseline period. It is anticipated that 90 hospitals would be required to participate.While we appreciate CMMI’s goals of increasing access to kidney transplants, we are again left questioning the model design elements and are concerned that the model as written may have unintended consequences by focusing so heavily on volume (namely sub-par matches). Also, as mentioned above, implementation of complex payment models requires significant time, resources and staffing on the part of hospital participants. But CMMI has proposed a start date of Jan. 1, 2025. Given the transformation that is already occurring nationally under provisions of the Organ Procurement and Transplantation Network Act, this aggressive timeline is untenable. Additionally, we are concerned that CMMI is again proposing mandatory participation. As mentioned in our principles, it is critical that organizations can assess whether models are appropriate to best serve the needs of their patients and communities. Therefore, participation should be voluntary.<h2>CONCLUSION</h2>The APM model design principles we outlined above would support more organizations’ abilities to provide accountable and coordinated care. The AHA urges Congress to extend APM incentive payments, for CMS to remove problematic high- and low-revenue thresholds that preclude rural and critical access hospitals from obtaining necessary resources for infrastructure investment, and for CMMI to make models such as TEAM and IOTA voluntary.The AHA appreciates your efforts to examine these issues, and we look forward to working with you. Wed, 26 Jun 2024 15:38:30 -0500 Testimony