Health Care Policy Forum: The American Recovery & Reinvestment Act of 2009

1. Health Care Policy Forum: The American Recovery & Reinvestment Act of 2009 Illinois Maternal & Child Health Coalition Sargent Shriver National Center on Poverty Law March 6, 2009

2. The American Recovery and Reinvestment Act of 2009 (ARRA): Health care provisions • FMAP and DSH • COBRA • Community based health centers • Medical technology • Comparative Effectiveness Research

3. FMAP Source: http://recovery.illinois.gov/ • All states receive minimum 6.2% increase in FMAP rate for 27 months (increased if state’s unemployment rate high) • Requirements for state to receive funds: • May not have Medicaid eligibility or procedures more restrictive than were in effect 7/1/08 • Must promptly pay doctors, hospitals, nursing homes providing Medicaid services

4. FMAP Source: http://recovery.illinois.gov/ -- Maintenance of effort applies to procedural requirements in addition to eligibility levels -- E.g., two pay stubs instead of one for income verification; asset limits; immigrant restrictions -- Prompt payment rule is that most “clean” claims must be paid within 30 days, and this applies to more providers than normal Medicaid -- Illinois borrowed significant funds in late December and can now access enhanced FMAP for them

5. FMAP Source: http://recovery.illinois.gov/ Illinois expects to receive $2.9 billion of Medicaid funds over next 9 quarters; of that, $2.2 billion for FY2009 & 2010 IL FMAP rate increased from 50.32% to 60.48% for 9 fiscal quarters, dating back to 10/1/08 (adjusted for IL’s unemployment rate) $470 million recently allocated for FFY 09

6. DSH Source: Larry Joseph, Voices for Illinois Children • FMAP increase does not apply to the Medicaid Disproportionate Share Hospital (DSH) program • ARRA provides 2.5% increase in DSH allotments for FY 2009 & 2010 • IL will receive approx. $16 million

7. COBRA COBRA: federal law requiring employers with 20+ employees to provide group continuation coverage State law requires employers of any size to provide group continuation coverage Normally, an employee who loses group coverage & elects continuation, pays the entire health insurance premium plus 2%

8. ARRA & COBRA • ARRA provides a subsidy that reduces by 65% the cost of COBRA & other state group continuation coverage for up to nine months (applies to both fed & state laws, to group health plans of all sizes) • Eligibility for subsidized coverage under ARRA: • Lost group health coverage due to involuntary termination between 9/1/08 & 12/31/09 • Income must be < $125,000 (individual) or < $250,000 (married, filing jointly)

9. ARRA & COBRA Subsidy will be applied to premiums for the first period of coverage beginning 3/1/09 (is prospective; not retroactive) Former employees will only be required to pay 35% of the group coverage continuation premium; former employers initially pays the 65% but government later reimburses through reduction in payroll taxes COBRA Coverage ends 18 months from when former employee first became eligible for COBRA; state law provides for up to 9 months of coverage

10. COBRA: Signing up for Subsidy Employers must send forms to former employees so that they may elect to continue group coverage & receive subsidy Former employees have 60 days after receiving the forms to enroll Ineligible: after 9 months of subsidy or if become eligible for new group health coverage or Medicare or if regular coverage period expires

11. Community Based Health Centers (CHCs) ARRA provides $2 billion for CHCs $1.5 billion for infrastructure & construction projects $500 million for services and operating fund Funds will be distributed by Health Resources and Services Administration (HRSA) to CHCs ARRA requires HRSA to prepare a plan for spending the funds within 90 days (May 2009) & to report to Congress every 6 mos. thereafter 11

12. Community Based Health Centers (CHCs) Illinois’ approximate 5% share: $125 million Illinois has 44 FQHC or FQHC look-alike orgs, with over 300 clinic sites: 50%: Medicaid, FamilyCare or All Kids 32%: uninsured 80% at or below 100% FPL 95% at or below 200% FPL 12

13. Community Based Health Centers (CHCs) Eligible for HIT funds Programs that “work in concert” with CHCs also receive funding: National Health Services Corps: $300 million Programs to train primary care docs: $200 million Prevention & Wellness Fund: $1 billion: $300M for CDC’s 317 immunization programs $700M to combat chronic disease rates & reduce infections 13

14. Medical Technology (HIT) • ARRA provides $19 billionfor health information technology (HIT) and research on comparative effectiveness of health care tests and treatments • 5% estimate for Illinois: $950 million • Law takes effect immediately; however, CMS and state Medicaid agencies will need time to establish protocols • Goals: • grow jobs in health care sector (projection: 200,000 jobs) • improve the quality of health care for all Americans • down payment on broader reform • slows growth in health care costs

15. Medical Technology: HIT • Office of National Coordinator of HIT: • created in 2004 by G. Bush. • ARRA codifies the Office and gives it specific jobs • National Coordinator of HIT: • Set standards for technology systems used to store and maintain medical records to ensure: • confidentiality for patient & • ease of information sharing between patient & docs • will support docs & hospitals as they transition to electronic records

16. Medical Technology: HIT • ARRA requires health providers to be “meaningful users” of HIT by 2015: have an electronic records system • approx. 90% of docs & 70% of hospitals would adopt & use electronic records within next decade, • saving government > $12 billion and generating additional savings through improving quality of care, care coordination, and reducing medical errors & duplicative care [source: CBO]

17. HIT & The Health Insurance Portability and Accountability Act (HIPAA) • Medical records privacy currently protected by HIPAA • HIPAA supersedes contrary provisions of state law unless that law is more protective • ARRA provides protections by making funding contingent upon a series of privacy & HIT security provisions • Amends HIPAA to strengthen its protections and enforcement provisions

18. HIT provisions & HIPAA • ARRA limits the sale of records & the use of records for marketing & fundraising (patient must now authorize) • ARRA gives patients the ability to learn who has viewed their record & when it has been accidently or purposely disclosed (patient must be notified within 60 days) • ARRA extends HIPAA to everyone who handles medical records (business entities covered now) • Government will NOT • have any influence over doctors’ and patients’ decisions on their medical care and treatment; • have access to individual patient’s electronic medical records

19. Medical Technology: Comparative Effectiveness Research (CER) • CER: Compares clinical outcomes (the “clinical effectiveness”) of alternative therapies for the same condition i.e. “what works and what doesn’t work” • CER’s Benefits: • Helps patients & docs make better health care decisions together, improving quality of care & efficiency, thereby saving money • Promotes and funds unbiased research (no drug-company-sponsored research) • Government is prohibited from making any coverage decisions based on this research or from issuing guidelines; rather, will disseminate research to public

20. Contact John Bouman, President johnbouman@povertylaw.org Andrea Kovach, Staff Attorney andreakovach@povertylaw.org