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Hospitals must document uninsured care, rethink funding before Obamacare repeal, legal experts say

Ranks of uninsured could swell by millions if the Affordable Care Act is repealed, hospitals must take steps to protect reimbursements, experts say.

Beth Jones Sanborn, Managing Editor

As Donald Trump makes staff decisions and lays out preliminary plans for his first months in office, hospitals should be drilling down on uncompensated care costs, taking greater control of Medicaid and indigent patients, and having discussions about turning tax incentives for the uninsured into direct payments to hospitals, law firm Morgan Lewis said in a Lawflash post.

As Republicans will soon control The White House, House of Representatives, and the Senate, chances are very high at least sections of the Affordable Care Act will be repealed, or at least revised.

The ACA created payment policies for readmissions, value-based purchasing, and hospital-acquired conditions, created a path for accountable care organizations and established the Center for Medicare and Medicaid Innovation. It also is responsible for Medicaid expansion in many states.

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Since healthcare exchanges require substantial government funding because of the tax incentives used to encourage purchasing insurance on the exchanges, and Medicaid expansion also created large financial commitments at the federal and state levels, these provisions are especially vulnerable to scrutiny and possible repeal, the firm said.

The proposals floated as solutions to the above provisions all stand to swell the ranks of the uninsured, which had shrunk significantly in the years following implementation of the ACA, but the firm said "forward-thinking" hospitals can take steps to protect, or potentially increase, reimbursements for treating uninsured patients.

First, even though having more uninsured patients is generally a negative for hospitals, the firm pointed out it will likely spawn an increase in disproportionate share hospital payments, which are directly related to the percentage of the population that is uninsured.

[Also: MACRA will move forward largely untouched when Trump steps in, experts say]

"Hospitals need to make sure that they are properly collecting and reporting their data on uncompensated care costs to ensure that they receive the maximum DSH amounts to which they are entitled, " the firm said.

Second, hospitals should take a hard look at how to create value in state healthcare systems and "take greater control" over the health of Medicaid and indigent patients. Hospitals should take a lesson from the several states who have recently tested Medicaid demonstration programs, often referred to as Delivery System Reform Incentive Payments, or DSRIP, as well as from the experience of participating in ACOs in developing models for treating the uninsured that might be attractive to state leaders, Morgan Lewis said.

"If hospitals can develop well-designed healthcare funding programs with risk-sharing and quality metric features, states will likely champion these programs with CMS, possibly resulting in a payment stream that is even more under hospital control than fee-for-service Medicaid."

[Also: Analyst: Trump, GOP control could mean fast-track for legislation to help rural hospitals]

Finally, the firm suggested hospitals should ask Congress to assign funds previously used for tax incentives to create an "indigent care pool" that would directly reimburse hospitals for the care rendered to the uninsured, or at least get the discussion going amongst their trade associations.

"The work on each of these activities should begin quickly, as it is more advantageous for hospitals to have a say in shaping policy, rather than in simply reacting to it," Morgan Lewis said.

Twitter: @BethJSanborn

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