Senate Health Care Package Is a Step in Right Direction, Does Not Go Far Enough on Access

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The National Association of Children’s Hospitals (N.A.C.H.) expressed support for children’s health care provisions in the Senate’s health care package unveiled over the weekend. The bill extends the Children’s Health Insurance Program (CHIP) by two years until 2015. However, children’s hospitals are concerned the bill does not go far enough in reducing cuts to supplemental Medicaid payments they receive for providing care to a disproportionate share of low income and uninsured patients.

As health reform legislation has advanced in House and Senate, our biggest concern has been and continues to be that children’s access to care be addressed alongside children’s health care coverage. Coverage without access is meaningless.

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The National Association of Children’s Hospitals (N.A.C.H.) expressed support for children’s health care provisions in the Senate’s health care package unveiled over the weekend. The bill extends the Children’s Health Insurance Program (CHIP) by two years until 2015. However, children’s hospitals are concerned the bill does not go far enough in reducing cuts to supplemental Medicaid payments they receive for providing care to a disproportionate share of low income and uninsured patients.

''The CHIP extension is a positive step and would ensure that more than 10 million children continue to benefit from health care coverage,'' said Lawrence McAndrews, president and CEO of N.A.C.H.

Also included in the extension language is a provision that would call on the Secretary of Health and Human Services to conduct a study of the benefits and cost sharing protections offered through CHIP and the proposed Exchanges.

''We support children moving into the Exchanges with appropriate benefits and cost sharing protections, but we advocate that the study include a review of reimbursement to ensure provider participation,'' said Lawrence McAndrews, president and CEO of N.A.C.H.

Provider participation under Medicaid is a top issue for children’s hospitals. Medicaid’s underpayment of pediatric services contributes to physician shortages in pediatric specialties and creates significant financial shortfalls for children’s hospitals. Children’s hospitals rely on DSH funds to help offset these gaps.

''There is a clear-cut difference between the Senate and House on Medicaid-DSH funding,'' explained McAndrews. ''The House bill does a better job at recognizing the importance of DSH to children’s hospitals, proposing a $10 billion cut over 10 years compared to the Senate’s new number of $19 billion. We hope the House prevails in its position during conference.''

Originally the Senate had proposed $22.4 billion in Medicaid DSH. The original DSH cuts are based on the premise that safety net hospitals would no longer need these funds as more Americans gained health care coverage. This assumption does not apply to children’s hospitals which use DSH cuts to close shortfalls created by Medicaid underpayment versus gaps created by uninsured patients. On average, Medicaid reimburses children’s hospitals 67 percent of the cost of care when DSH is excluded, 76 percent of cost when DSH is included. More than half of children’s hospitals inpatient days are devoted to children covered by Medicaid.

According to the Association, the Senate also missed an opportunity to improve children’s access to care under Medicaid. Children’s hospitals support an amendment filed by Senator Sherrod Brown (S. Amd. 3185) that would ensure Medicaid payments for pediatric care services be no less than 80 percent of what Medicare pays for the same service in 2010, 90 percent in 2011 and 100 percent in 2012 and subsequent years.

''Senator Brown’s amendment is critically important to pediatrics,'' commented McAndrews. ''Increasing Medicaid reimbursements to Medicare levels would improve access to care by encouraging community providers to participate in Medicaid and lowering inappropriate emergency room usage.

“As health reform legislation has advanced in House and Senate, our biggest concern has been and continues to be that children’s access to care be addressed alongside children’s health care coverage. Coverage without access is meaningless. While children are roughly 25 percent of the population they are 100 percent of our future. We look forward to working with Congressional leaders during the conference process to do everything we can to ensure children are able to receive the right care at the right time and in the most appropriate setting,” said McAndrews.

The National Association of Children’s Hospitals (N.A.C.H.) is the public policy affiliate of the National Association of Children’s Hospitals and Related Institutions. Representing more than 140 freestanding acute care children’s hospitals, freestanding children’s rehabilitation and specialty hospitals, and children’s hospitals organized within larger medical centers, N.A.C.H. addresses public policy issues affecting children’s hospitals’ missions of service to the children of their communities, including clinical care, education, research and advocacy.

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Gillian Ray
N.A.C.H.
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