Federation of American Hospitals CEO on Medicaid, Affordable Care Act, and more | Healthy Bottom Line podcast

With a new administration, and a new Congress, the Federation of American Hospitals has a number of priorities in Washington this year.

Chip Kahn, president and CEO of the Federation of American Hospitals, says health systems are worried about the possibility of cuts to Medicaid and the Affordable Care Act.

But Chip Kahn, the organization’s president and CEO, boils his main priority to one word: “Coverage, coverage, coverage.”

Kahn is the guest on the new episode of Healthy Bottom Line, a podcast from Chief Healthcare Executive®. The Federation of American Hospitals represents the nation’s for-profit hospitals and health systems.

In a wide-ranging, 30-minute discussion, Kahn says hospitals are concerned about the prospects of cuts in Medicaid and funding for the Affordable Care Act. Medicaid enables nearly 80 million Americans to get access to healthcare and also provides critical funding to hospitals and health systems.

“The Medicaid program for healthcare and hospitals today is so important for so many lower-income Americans, and it's just critical … that that program be sustained,” Kahn says. “There are various aspects of the program that we know are under potential examination and maybe threat regarding legislative action, or even administrative action to reduce Medicaid, and at least at this point, I think we need to hold our own with it.”

Hospitals in rural America rely heavily on Medicare and Medicaid, in particular, to keep the doors open.

“Those payments generally are under cost and under what they need to be,” Kahn says. “So it's very hard to make ends meet to provide the services in these rural areas.

It's one of the reasons you've seen closures, and closures are horrendous for a town or a county.

“But also, you've seen cutbacks in services, because services that can't pay for themselves have to be cut frequently because there's not the grease in terms of the overall revenues of the hospitals in those areas, to cover all those other services, to cover the any losses they have in those services. That's why you have these OB-GYN deserts in many areas,” he adds.

• Read more: More than 700 rural hospitals, about 1 in 3, could shut their doors

While President Trump has said he won’t abolish the Affordable Care Act, enhanced funding to support the healthcare law is slated to expire at the end of the year.

Kahn says hospitals will be making the case to protect that funding for the exchanges, which provides “a critical path for many, many, many patients, particularly in states that chose not to expand Medicaid.”

“One of the policies that's made a real difference for so many are the tax credits in the exchanges in the individual market,” he says.

“We'd like to see them made permanent, but if that's not possible in the legislative process for our patients, we'll take whatever we can get,” Kahn says.

Hospitals and health systems are worried that if fewer people have coverage under Medicaid or the Affordable Care Act, they will find it harder to get care, he says.

Plus, hospitals will see more uninsured patients in their emergency rooms, and they’ll end up providing more uncompensated care, adding to their financial pressures.

“This is why health insurance is so important, because it allows those who are covered to get the care they need in the right setting,” Kahn says.

“Yes, we are very worried that there'll be a boomerang here, because the people that need the care need the care, and if they're not able to afford health insurance, if health insurance becomes totally unaffordable to them, that doesn't mean they're not going to come back … into the system,” he adds.

Those patients may come back to hospitals with more serious illnesses, needing longer stays, and their care “will end up more expensive than it otherwise would have been,” Kahn says.

The administration and new Congress also have to deal with a federal spending package in the next several weeks. Lawmakers passed a short-term spending bill in late December, but it only funds the government through March 14.

Hospitals are pushing for extended funding for programs to support hospitals dependent on Medicare, as well as those with a low volume of Medicare payments, Kahn says. In addition, health systems are pushing for the extension of telehealth and hospital-at-home programs.

Kahn says he hopes Congress agrees to extend those programs beyond a few months, because such short-term extensions are “not good for health policy.”

Check out the podcast for the entire conversation, which includes the financial health of hospitals, staffing levels, the uptick in denials from insurance companies, prior authorization, and more.