House Introduces Repeal and Replace

Esq. Stephen B. Hanse in Legislative

NYSHFA/NYSCAL received the article below from AHCA/NCAL today.  Please take a moment to review.

House Introduces Repeal and Replace
It Includes Fundamental Changes to Medicaid-
The Changes Pose a Serious Threat to our Funding

At 6 p.m. today, House leadership released the long-awaited "repeal and replace" bill. Unfortunately, it makes Medicaid reform a part of "replace" and presents a serious threat to our sector and the people we take care for. This memo will provide an overview of the bill, summarize our issues and concerns, outline the next steps we expect in the legislative process, and discuss how you can help ensure our success.

A Change to Per Capita Caps

The bill fundamentally changes the federal contribution to states for Medicaid. It switches the federal contribution to a per capita cap. It divides beneficiaries into five categories: aged, disabled, children, Medicaid expansion adults and other adults. We would receive our funding from the federal aged and disabled allocations. Each state would receive a dollar amount for each person in each category in the state. The state would then decide how to spend the funds within the categories. States could spend the funds on long term care facilities, on home health, on acute care or any combination of health care providers, up to the cap.

This represents a challenge to us for two reasons. First, there is no guarantee that states will spend the funds on our services. We would lose the certainty of being a required service under the current Medicaid system.

Second, starting in FY 2020, states will receive less money than they would have under the current system.  The calculation of the state payment for 2020 and beyond works in this manner: The federal government will first look at the average aged beneficiary spend in FY 2016 and then increase it by the medical consumer price index (CPI) for the next three years. That amount then becomes a state's per beneficiary payment in FY 2020, and that number then increases every year by the medical CPI.

This results in lower funding for several reasons. First, the increase that the federal government provides the states is limited to the medical CPI. While that sounds okay, it is not. The cost of care in our settings has traditionally increased at a rate that exceeds this index. Second, because the base rate is FY 2016, it would exclude any increases in federal match that states have had due to a Medicaid rate increase, a new or increased provider assessment, and it may also preclude inclusion of other state financing mechanisms. I say "may" because we are still evaluating the language and the impact on provider fees and IGTs.

We have contracted with the Moran group to provide a state-by-state analysis of the impact of this and expect to have estimates available to you in the next week.


Leadership would like this signed by the President by the time Congress leaves for the Easter recess on April 7. The following is the intended schedule for the bill:

  • Week of March 6----Energy & Commerce and Ways & Means Committees work and approve the legislation
  • Week of March 13---Budget and Rules Committees work and approve the legislation
  • Week of March 20---House Consideration
  • Week of March 27---Senate Consideration

All of this, is of course, open to change.

What Are We Doing and What Can We Do? 

First, we want to provide you resources so you can understand the impact on you and your residents. Those will include:

  1. The previously mentioned Moran analysis that will be distributed promptly once we receive it.
  2. A member-wide webinar that will take place on Tuesday, March 7 at 4:00 p.m. eastern time. You can access the webinar online. If you are attending the AHCA/NCAL Quality Summit in Orlando, or are otherwise unavailable, you will be able to access a recording of the webinar at your convenience. A link to the recording will be emailed to members as soon as possible following the webinar.

Second, while this legislation is disappointing, and we had hoped to stop its introduction, it has a long way to go before it becomes law. We are actively working with Republican leadership and their staffs to determine how we can get changes that will make it acceptable. There is still a window of time to do that and we are pressing 24/7 to make that happen. If Congress won't fix the legislation, there are still opportunities to defeat it. There are multiple constituencies that will have problems with this legislation. Some Republicans don't think it goes far enough, others think that it goes too far. Democrats will uniformly oppose it. The margin for error, particularly in the Senate is very thin. Do not assume for a minute that this is a done deal.

What You Can Do

More than ever we need to come together and make our voices and those of our residents heard. Later this week, we will send out a new CapWiz request and we urge you and your employees to respond in force. For now, if you are not signed up for the Capwiz program, click here to register. We need everyone to participate in the grassroots letter writing campaign via CapWiz so that we can make an impact.   

In addition, we have scheduled a Congressional fly-in for March 21st and 22nd. We expect scores, if not hundreds, of our members to be in town to help us on the Hill. This is currently the scheduled week for the House vote on this bill and just one week before the Senate vote. If you can come to town, please contact Matt Smyth and we will plug you into key meetings on the Hill. If you can't come to D.C. but have a key relationship with a Republican House or Senate member, let us know and we will get you talking points for a call or visit in district.

This is the biggest threat we have faced to Medicaid perhaps in the history of the sector. It comes at a particularly bad time for the sector and our residents. It's not acceptable, but it's also not inevitable. We can create the outcome we need over the next four weeks, but that is only possible if we all get involved.

I know you will respond to our call for help and I believe that collectively we can make it through this enormous challenge.


Mark Parkinson
President & CEO


Stephen B. Hanse, Esq.
President & CEO
518-462-4800 x11