Last Monday, the American Hospital Association and the Catholic Health Association of the United States wrote a letter to HHS Secretary Kathleen Sebelius imploring the secretary to make it clear that HHS is not discouraging hospital-affiliated charitable foundations from subsidizing premiums for health insurance marketplace policies.
In theory, hospital-affiliated charities can pay part of the health plan premium for plans sold on the marketplace. This helps out needy consumers, and of course, makes it more likely that hospitals will be paid for all the services they deliver. But with a new communication from CMS leaving it unclear what kind of cost-sharing the agency will allow — which CMS issued in March — hospitals aren't sure what to rely on at this point.
"The uncertainty created by HHS's actions is limiting our ability to [assist Americans in obtaining health coverage] to the detriment of many Americans who would benefit greatly from the services made possible with insurance coverage," according to the joint letter from AHA president and CEO Rich Umbdenstock and CHA president and CEO Sister Carol Keehan.
So where are we now?
The issue of subsidizing health insurance market premiums has a complicated history. The first shot was fired on November 4 of last year, when HHS said it had "significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third-party payments. HHS intends to monitor this practice and take appropriate action, if necessary."
As is often the case with emerging regulations, things seem to have taken a few turns in recent months. While guidance issued by CMS on February 7 included a Q&A clarifying that it was not discouraging such subsidies from charitable foundations, things seem to have gotten hazier by March.
On March 14, CMS issued an Interim Final Rule which requires issuers of health marketplace plans, including stand-alone dental plans, "to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other federal and state government programs that provide premium and cost-sharing support specific individuals, and Indian tribes, tribal organizations and urban Indian organizations."
Notice, Michael Strazzella told Healthcare Dive, that the language doesn't mention hospital affiliated or other charitable foundations. And when it comes to regulations, what's not mentioned can be as important or more as what is, says Strazzella, Group Practice Leader, Federal Government Relations at Buchanan Ingersoll & Rooney's D.C. office.
"Hospitals need clear guidance to ensure that they are not in violation of anti-kickback statutes," Strazzella said. "The concern could be that a hospital would make a payment to ensure that an individual is insured to receive what can be considered as an [elective procedure], thus providing financial gain to a hospital."
As the AHA and CHA see it, CMS has made it difficult for hospitals to know which direction to turn on this issue. And this is a major problem given the desire of hospitals to help more patients obtain health insurance, they say. Michael Rogers, CHA Senior Vice President of Advocacy and Policy, underscored the importance of premium payments to ensuring that individuals not only acquire health insurance, but also retain it:
"CHA supported the Affordable Care Act because it provided insurance coverage and health security to millions of people. Subsidizing premium payments is one way to help make sure people are able to keep the coverage they recently obtained," said Rogers.
What happens next?
As of now, HHS has not responded to the hospital associations’ request for clarification. Given the organization’s changes in direction over the last few months, few hospitals are going to be willing to risk committing themselves to a strategy that might come back to bite them. In the short term, anyway, it seems likely that hospitals will tread very carefully with premium subsidies until they receive some firm guidance.