Leveraging Health Reform’s New Hospital Community Benefit Requirements to Address Unmet Needs Jessica L. Curtis, JD Director, Hospital Accountability Project Community Catalyst November 2010

Overview Welcome Community Benefit: What It Is, Why It Matters, and What the ACA Requires Jessica Curtis, Community Catalyst Best Practices and New Tools: How Hospitals Are Gearing Up for the New Law Indu Spugnardi, Catholic Health Association Integrating Public Health into Community Health Needs Assessment and Planning Julia Joh, National Association of County & City Health Officials Discussion Community engagement and integration of public health priorities are hallmarks of strong hospital community benefit programs. The Affordable Care Act requires non-profit hospitals to conduct regular “community health needs assessments” and to address unmet health needs identified, with input from public health experts and community members. © Community Catalyst 2010

Goals for Today Clear understanding of new ACA requirements for hospitals and the opportunities they present for the communities they serve What is “community benefit”? Why is this an important issue for early implementation of the ACA? What questions remain unanswered that require advocates’ attention? Which communities and populations are of particular concern? Learn about existing best practices and tools from hospitals and public health practitioners How are hospitals and public health experts integrating community perspectives and members into their needs assessments and planning processes? How can advocates and community members become more involved? Begin a dialogue between advocates, hospitals, and public health experts What are areas ripe for better collaboration? Areas of concern? Advocates: are you currently involved in community/hospital work? What are some challenges and successes you have witnessed? Do you see opportunities stemming from these new requirements to improve access to care and address community health needs? If not, why not? © Community Catalyst 2010

Community Benefit Key Concepts New Standards for Hospitals Policy Considerations Who’s Still Vulnerable Now and After Implementation? How Does This Connect to Other Policy Concerns? © Community Catalyst 2010

Our Nation’s Hospitals: Rooted in Charitable Care © Community Catalyst 2010

IRS standard for tax-exempt hospitals: Provision of health = charitable purpose Add at least one factor: ER open to all, regardless of ability to pay Community members on governance board Extra $ goes to facility improvement, patient care, and medical training/education/research Inpatient care for all, including Medicare/Medicaid Open medical staff with privileges available to all qualifying physicians © Community Catalyst 2010

What is “community benefit”? Unreimbursed goods, services, and resources provided by health care institutions offered in response to needs and concerns identified by the community, particularly those of people who are traditionally underserved (Community Catalyst/The Access Project, Community Benefits Workbook for Grassroots Leaders) Flexible - local solutions to local problems Inclusive - wide range of services and programs, so long as tied to community need; also includes all health care institutions serving a community Empowering - community is engaged and involved in planning; particular focus placed on vulnerable, traditionally disenfranchised populations Collaborative – involves leveraging existing resources in planning and implementation (e.g., public health, insurers) © Community Catalyst 2010

Community Benefit Can Include… Charity care (or, financial assistance) Includes reduced-cost care and care to the “medically indigent” For all medically necessary services Health and disease-screening programs that focus on increasing access to primary care and preventive health Medicaid shortfall Health research, training and education programs (provided they are related to identified community health needs) Other services, resources and programs tied to identified community needs - examples from Community Catalyst’s Model Act © Community Catalyst 2010

A Model Community Benefit Process Clearly defined mission statement and board-level commitment Community health needs assessment Solicits comment from community groups, government officials, other providers Incorporates and gathers available public health data Gives community opportunity to review Updated regularly (every 3 years) Community benefits plan Designed to: Increase access for targeted communities, address critical health care needs for targeted communities, OR foster measurable improvements for health Includes other institutions and public health Describes targeted community Clear reporting on process, groups involved, priorities chosen, evaluation mechanisms Public reporting, with opportunities for review and comment - Community Catalyst’s Model Act and Commentary © Community Catalyst 2010

Consumer Values for Community Benefit Collaborative process Between health care institutions and communities they serve Includes other institutions and public health Broadly defined, but tied to community needs Allows for flexibility Requires active, ongoing engagement, discussion, and evaluation Prioritizes unmet needs of vulnerable populations Involved and engaged in decision-making and priority-setting - Community Catalyst’s Model Act and Commentary © Community Catalyst 2010

New Standards for Hospitals Summary of ACA’s requirements for tax-exempt hospitals IRS oversight (Schedule H reporting) Changes in funding for safety-net hospitals An important point: each hospital in a system that qualifies for federal tax-exempt status has to individually meet these requirements. The first three requirements go into effect immediately; the fourth, to conduct a community health needs assessment, is in full effect by March 2012. © Community Catalyst 2010

New Standards for Non-Profit Hospitals Have - and communicate - a written financial assistance and debt collection policy. Say whether you offer free or discounted care List eligibility criteria Describe how to apply Say how you decide charges Explain steps you’d take to collect on a bill Explain how you’ll publicize the policy widely in your community © Community Catalyst 2010

New Standards for Non-Profit Hospitals Limit what you charge for care. No more “gross charges” Added protection for patients who qualify for financial assistance Emergency or medically necessary services only Amounts generally billed to insured patients © Community Catalyst 2010

New Standards for Non-Profit Hospitals 3. Stop unfair billing and collection activity. No “extraordinary collection activity” unless you’ve made a “reasonable effort” to qualify the patient for financial assistance Joint Committee on Taxation: Lawsuits,liens on residences, arrests, body attachments, or similar acts Notification upon admission and in written and oral communications with the patient regarding the patient’s bill, including invoices and telephone calls, before collection action Joint Committee - Congressional committee showing congressional intent. Terms in quotes have yet to be defined. © Community Catalyst 2010

New Standards for Non-Profit Hospitals 4. Conduct a community needs assessment. Must seek input from people who “represent the broad interests” of the hospital’s community, including public health experts Must make assessments available to the public Every three years $50,000 civil fine for failure to comply Effective March 2012 © Community Catalyst 2010

IRS Oversight Mechanisms Annual reporting requirement for tax-exempt hospitals in Schedule H Detailed questions on charity care and community benefit Charity care based on ability to pay, in keeping with the hospital’s policy; no fixed eligibility guidelines Broad range of community benefit or community-building activities Community need must be established (request from community group can be used to demonstrate need) Mix of hard numbers and descriptions, especially in defining a hospital’s community and their needs ACA requires regular review of community benefits Audited financial statements Descriptions of how they are addressing identified community needs Regular IRS review of community benefit Treasury/HHS reports to Congress on bad debt, charity care, community benefit, and means-tested government program costs © Community Catalyst 2010

Schedule H currently includes questions about hospital efforts to enroll in public programs. It’s very likely that Schedule H will be the tool the IRS uses to audit and measure compliance with the new requirements. There are key points in the Schedule that already ask questions that will let us know, to the extent that hospitals self-report it, what they’re doing. Here are examples about the charity care policy and a snippet showing questions about patient education. Note, too, the question circled here: this is an example of how form might go further than the law’s requirements and how this could be used in enrollment efforts down the line. It asks whether hospitals have helped patients enroll in public programs or the Exchange. So as we work to implement reform generally, this is just one example of how we could use community benefits to encourage hospitals to help implement reform in a way that makes sense for communities (e.g., by actively screening patients for eligibility in new programs). © Community Catalyst 2010

Schedule H, Continued Charity care includes: Free, reduced cost, and “medically indigent” Notification of all programs, not just financial assistance Community benefit = document a community need (reduce government burden, direct response to public agency or community group’s request) Reduce government burden (e.g. address health disparities) Public health initiatives, such as violence prevention, removing lead from homes, addressing air quality Build up workforce Medical interpreters Community health advocacy (includes coalition-building) © Community Catalyst 2010

Changes in Safety-Net Funding Medicaid Disproportionate Share Hospital (DSH) funds Federal allocation to be reduced and redistributed starting FY 2014 Biggest cuts to states that don’t target DSH to charity care/Medicaid, have higher numbers of insured, and aren’t low DSH Consideration given to states that have used DSH funds in the past to expand coverage © Community Catalyst 2010

Policy Considerations Who’s Still Vulnerable Now and After Implementation? How Can Community Benefit Address these Unmet Needs? How Does Community Benefit Connect Up to Other Policy Concerns? © Community Catalyst 2010

Vulnerable Populations Uninsured and underinsured People are struggling now with medical debt and finding affordable care Affordability protections after 2014 inadequate for some, particularly low-to-moderate income families Employers shifting more costs to insured employees Enrollment efforts will need to be robust Immigrants Individuals with chronic illness Communities of color These populations are likely to be prime “targets” for community benefits programs and financial assistance in many communities. © Community Catalyst 2010

The Impact on Coverage Nationally The ACA dramatically reduces—but does not eradicate—the number of uninsured. 8% 19% 8% 13% 18% 10% 9% 58% 57% © Community Catalyst 2010

Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage, 1999-2010 $5,791 $6,438* $7,061* $8,003* $9,068* $9,950* $10,880* $11,480* $12,106* Growth in worker contributions $12,680* $13,375* $13,770* * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2010.

Among Firms Offering Health Benefits, Percentage of Firms That Report They Made the Following Changes as a Result of the Economic Downturn, by Firm Size, 2010 Reduced benefits and/or increased cost sharing in employer-sponsored coverage is becoming more prevalent. *Estimate is statistically different between All Small Firms and All Large Firms within category (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2010.

What Does It Mean to Be Underinsured? Commonwealth Fund’s definition Under 200% FPL = out-of-pocket (OOP) spending exceeds 5% of income Over 200% FPL = OOP spending exceeds 10% of income Insurance deductible is 5% or more of income One-third of families run into trouble before these limits are reached Under 200% FPL = 2.5% or less of family income Between 200-400% FPL = 2.5 – 5% of income Over 400% FPL = 5-7.5% of family income Commonwealth Fund definition – NOTE THAT THIS DOES NOT INCLUDE SHARE OF PREMIUMS. The second data set comes from Center for Studying Health System Change (2008, Peter Cunningham). It is sobering to realize that, although the ACA will significantly reduce the number of uninsured, significant numbers of underinsured people may remain. © Community Catalyst 2010

Immigrants Will Need Access to Care Undocumented immigrants Barred from buying Exchange plans at full cost and from getting subsidies Can get exemption from individual mandate (proof) Legal immigrants Eligible for Exchange plans and subsidies Still subject to five-year Medicaid bar Education on the law is crucial Changes to Medicaid DSH funding may have particular impact on immigrant access to services. © Community Catalyst 2010

How Does Community Benefit “Link Up”? CHNA - could look for and report access problems Target vulnerable, underserved populations Collaboration with CHC’s, others Eligibility screening for public programs, Exchange Data collection demonstrating successes and/or continued need for safety net services, better affordability standards Hospital roles in new models of care Public Education Early win for consumers Tested well in 2008 polls © Community Catalyst 2010

Challenges and Opportunities © Community Catalyst 2010

Opportunities for Advocacy and Collaboration Opportunities exist at the federal, state and local level Federal – grants; regulatory actions around DSH and hospital requirements State – pursue options to support primary care and preventive access; state grant funds to help secure monies for CHC expansion; consider strengthening community benefit laws at the state level Local – community outreach and public education on financial assistance; community needs health assessments Begin thinking now about: Public education and outreach Establishing priorities Working with broad set of partners Involving community, hospital and public health partners in strategic planning © Community Catalyst 2010

Local Options Research issues of medical debt in your community. Are charity care and billing practices impeding access to care? Educate community members about hospitals’ new obligations, and train leaders to be involved in monitoring and planning efforts. Build partnerships with new allies whose constituencies may stand to gain from these provisions (providers, vulnerable communities). Approach hospitals and health officials now about working collaboratively on community needs assessments. Begin thinking about strategic approaches and priorities within the community (see Community Catalyst Resources Lists). © Community Catalyst 2010

Challenges Competing priorities Lack of community engagement, or community capacity Compliance vs. mission-driven approach Silos within public health, advocacy, and/or hospital sector Real differences of opinion Tough fiscal climate Regulatory guidance from IRS © Community Catalyst 2010

We Can’t Do It Alone Committed and knowledgeable state and federal policymakers Providers and public health experts who engage the community Informed and empowered consumer advocates Dr. McCoy from the Star Trek Enterprise said it best: “Damn it, Jim, I’m a doctor, not a magician.” Similarly, the law requires collaboration between hospitals, public health experts, and consumer advocates for a reason: each plays a unique role in ensuring that financial assistance and other community benefit programs really fit the community’s needs. We have to work together to get the job done right, and the ACA gives us new tools to do that. © Community Catalyst 2010

Resources http://www.communitycatalyst.org/projects/hap/ Fact sheets for consumer organizations and others Community benefits workbook for grassroots leaders Community benefits/financial assistance model acts Summaries of state laws Case studies http://www.communitycatalyst.org/projects/hap/ Questions? Contact Jessica Curtis at 617-275-2859 jcurtis@communitycatalyst.org © Community Catalyst 2010