1. 1 Legislative Update

2. 2 National Health Reform Update Senate HELP Bill –Detail missing Senate Finance –Three options papers set the stage –OMB scores “draft” at $1.6 billion; target <$1 Billion –White House involvement House Tri-Committee Bill –Productivity Offsets –No DSH cuts; includes physician self-referral

3. 3 Hospitals Reach Agreement on Health Reform Stakeholders Involved: –White House –Senate Finance Chairman Max Baucus (D-MT) –AHA –Catholic Health Association –Federation of American Hospitals Caps hospital spending cuts to $155 billion over 10 years –AHA estimates that hospitals would see reduced uncompensated care of at least $171 billion over 10 years

4. 4 Key Elements of the Agreement Coverage –Starting in 2013, policies will be implemented to expand coverage to 95% of all Americans, and require a mandatory employer contribution and an individual mandate Hospital Spending Reductions –$155 billion over 10 years Market basket cuts (-1.0% per year over 10 years) No DSH cuts for 5 years –Reductions begin in 2015 –After 10 years – 60% preserved Reduction in payments for Hospital Readmissions –Focus on “ avoidable ” cases –Related to the initial admission

5. 5 Key Elements of the Agreement Public “ Exchange ” –Details to be forthcoming Delivery System Reforms –Value-based purchasing provisions that are budget neutral –Bundling – pilot project –Restrictions on physician self-referral –Medicare-approved slots for physician GME is increased Tax-Exempt Status –Maintains the community benefit standard for hospital tax-exemption No formulas or tests on the amount of charity care provided

6. 6 Kansas “ Health Reform ” Initiatives PASSED: Increased CHIP coverage to 250 percent of the Federal Poverty Level Dental Coverage for Pregnant Women FAILED: Premium Assistance Program STILL AVAILABLE: Statewide Smoking Ban, plus Tobacco Tax Additional Assistance for Small Businesses Health Care Transparency Medical Home Model Expanded Coverage for Adults

7. 7 Implications of the State Budget Revenues continue to plummet –May/June 09 revenues $126 million below projections Governor ’ s July 2009 Actions –$90.6 million in spending cuts (2 percent cuts) –$70 million in new revenues –$700 million in certificates (internal borrowing) Current Environment for KHPA –Increasing backlog of Medicaid applications –Reduction in staff –Lack of resources to implement new policies Further Reductions in KHPA Budget –Unlikely to be absorbed through Medicaid Ops –Decrease in Medicaid provider reimbursement rates?

8. 8 Changes to the KHPA New Leadership –Dr. Andy Allison, Ph.D. as KHPA Executive Director –Dr. Barb Langner, Ph.D. as Medicaid Director Agency Dilemma –Whether to focus solely on the operations of the Medicaid program OR continue providing policy recommendations on health initiatives Legislative Changes to KHPA –Independent vs. Governor-led –Medicaid Operations vs. Health Policy

9. 9 Next Steps … Meet with your Legislator –Invite to hospital –Need help, let KHA know Find the connections –Trustees –Staff –Other community members