CEO Message

CEO Message: Budget Proposal Is Another Blow Hospitals Can’t Take

Now is the time to call your state assemblymember and senator to tell them the following:

  1. Hospitals need financial relief now.
  2. Reject the Governor’s budget proposal that would cut managed care payments to hospitals for inpatient care.

Embedded in the state’s latest budget proposal, as the administration looks to make up for the massive losses to state coffers driven by the COVID-19 pandemic, is a recommendation that would upend the way Medi-Cal managed care plans are paid.

While on paper this would be a small savings for the state, the bottom line for hospitals is a loss of $500 million annually and a change that would bring about a 180-degree shift in the way hospitals that contract with these plans are reimbursed for health care services.

The proposal prohibits Medi-Cal insurers from paying more than non-contracted rates, removing incentives to coordinate care among providers and plans. In other words, this proposal would create a barrier to value-based managed care contracting and has the potential to negate years of progress that has made California a national leader in the value-based care movement.

This is a cut that hospitals simply can’t absorb and one that will directly affect Medi-Cal patients who rely on hospitals to work within longstanding networks of providers to get their care. 

All of this comes at a time when hospitals are reeling from nearly $14 billion in short-term revenue losses caused by the pandemic and facing the prospect of depressed revenue for a lengthy period of time as patients have been slow to return to hospitals for the health services they need.

These concerns have been shared with a key Senate budget subcommittee, and there are signs legislators are listening. Even with a condensed agenda for this legislative year, the Senate budget subcommittee chair has shared his concerns about this proposal with the administration. 

The fight to stave off this $500 million annual loss is happening at the same time the push for an immediate $1 billion financial lifeline for hospitals is heating up. There are about two weeks left before the budget is finalized, and the pressure is on the Legislature to protect hospitals now.

The coming days will be critical to the future of hospitals’ financial stability and play an important role in determining how hospitals will be able to care for Californians in the coming months and years. We’ll continue to keep you informed as these conversations progress.

~ Carmela

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Regulations

CHA News Article

CMS Finalizes Medicare Advantage and Part D Policies for Contract Year 2021
For CEOs, CFOs, government relations staff

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule updating Medicare Advantage (MA) and Part D programs for contract year 2021. In addition to policy changes, the final rule codifies longstanding policies on the MA and Part D programs that have been previously adopted through sub-regulatory guidance, such as the annual Call Letter and other guidance documents.

CHA News Article

HHS Extends Deadline Related to COVID-19 Funding by 45 Days
For CEOs, CFOs, COOs

The U.S. Department of Health and Human Services (HHS) has announced a 45-day deadline extension for providers who are receiving payments from the Provider Relief Fund (CARES Act and the Paycheck Protection Program and Health CareEnhancement Act) to accept the terms and conditions.

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Human Resources

CHA News Article

Department of Fair Employment and Housing Offers Free Anti-Sexual Harassment Training
For in-house counsel, human resources executives

The California Department of Fair Employment and Housing (DFEH) has finalized its free anti-sexual harassment training for non-supervisory employees. The online training can be used to meet the requirement that, by Jan. 1, 2021, employers with five or more employees must provide at least one hour of classroom or other effective interactive training and education regarding sexual harassment prevention to all non-supervisory employees in California.

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CMS News Roundup

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Education

Publication

CHA Education Events

For more information about CHA education programs, visit www.calhospital.org/education.

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