Four Questions for THA's Craig Becker

The Tennessee Hospital Association, along with the American Hospital Association and most major provider organizations, opposed recent House and Senate plans to repeal and replace the Affordable Care Act. THA President and CEO Craig Becker recently answered questions on where those efforts fell short for Tennessee hospitals and what he would like to see going forward to protect access to care.

NMN: What were the key sticking points for the THA in the recent Senate GOP healthcare reform efforts and how might those issues impact Tennessee hospitals

Becker: THA remained opposed to the BCRA due to its dramatic long-term cuts and structural changes to Medicaid funding and its failure to address the instability in the individual insurance market.

With a major shifting in financial responsibility for Medicaid to individual states starting in 2020, TennCare projected a 10-year cost to the state of roughly $7.1 billion. Having lived through TennCare budget shortfalls in the past, we know all too well the difficult decisions that must be made in these situations - enrollee benefits are eliminated and provider reimbursement is slashed. Our state simply cannot afford to be in such a situation.

The potential for added uncertainty in the individual insurance market because of relaxed benefit requirements for insurers stood to increase premiums for older, sicker adults. The combination of the state impact of Medicaid reform and the changes to the individual market made the plan untenable for many senators.

Lastly, steep cuts to Medicare reimbursement for providers will place additional strain on hospitals and healthcare professionals. Healthcare costs increase at a much more rapid rate than other consumer costs. Although important, Medicaid reform truly is an unrelated issue, which should be dealt with in a separate legislative process.

NMN: How have hospital reimbursements been impacted under ACA, and what impact did not expanding Medicaid have on Tennessee?

Becker: Overall, the Affordable Care Act has dealt a major blow to Medicare reimbursement for hospitals. Much of the costs associated with the ACA are funded through steep reductions in Medicare provider reimbursement, and without Medicaid expansion in Tennessee, there has not been enough new reimbursement revenue to cover the Medicare losses. While there has been a slight reduction in charity care as a result of increased coverage through the insurance exchange, there remains an uncompensated burden of more than $1 billion annually in Tennessee.

Couple this reality with a sicker, older, and more uninsured population in rural communities across the state, and you see facilities in those areas continuing to struggle. It is even more difficult for them to maintain the delicate balancing act of cost efficiency and quality healthcare than their urban counterparts. Since 2013, nine rural hospitals have closed in Tennessee - the second highest closure rate in the nation - and the loss of reimbursement and continued cost of uncompensated care is certainly a big contributor to this trend.

THA data show the state's 61 rural facilities provided more than $292 million in uncompensated care in 2015. That number includes about $124 million in unreimbursed TennCare costs. The challenges and threats to rural hospitals are very real and federal action is needed to begin to provide a path for stabilizing these facilities.

NMN: What are the critical components required for THA to support ACA repeal and/or replace efforts?

Becker: As hospitals, we need to see a plan that provides stability to the individual insurance market and ensures the continuation of coverage for the millions of Americans - and more than 200,000 Tennesseans - who receive coverage through the exchanges. Moreover, if elements of the ACA are repealed, there would need to be meaningful replacements in place at the time of repeal. It is becoming increasingly clear that a bipartisan approach to these challenges is necessary for success.

As for Medicaid reform, hospitals continue to view this as an unrelated task and something that should be addressed more thoughtfully in a separate legislative process.

NMN: Final thoughts?

Becker: Many of Tennessee's rural hospitals are in a tough financial situation, and there is little to think it will get better unless we make efforts to change how we pay our rural hospitals or incentivize how that care is delivered. There needs to be a rethinking of how we provide healthcare in our rural communities and how we make sure there is still a medical presence in those communities. People who live in rural areas deserve the same access to care as those in the urban settings.

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