South Carolina Hospital Association Newsletter
     
Inside this issue
  Medicaid Expansion  
  The SCHA Advocacy Team worked tirelessly this legislative session to keep you updated on every subcommittee hearing and every debate concerning Medicaid expansion. From the first meeting of the Senate's special Affordable Care Act (ACA) subcommittee in January, to the final Senate vote that ultimately killed Medicaid expansion in late May. So, what did we learn?

We learned that the politics engulfing "Obamacare" are far more impenetrable than we expected, and unfortunately that rhetoric will remain hot this summer as more funding is spent on ads to undermine the ACA. Therefore, we shouldn't expect the intense politics surrounding the ACA to subside before the 2014 legislative session.
 
We learned that human and moral arguments are not going to win the debate for Medicaid expansion in South Carolina. While roughly 300,000 of our most vulnerable South Carolinians stand to gain health coverage that will ultimately improve health and life expectancy; those arguments aren’t going to tug on the heartstrings of conservative state legislators anytime soon. We must continue to focus on the impact to businesses and the negative economic impact it will have on our state as our hospitals bear exorbitant federal cuts and South Carolina dollars subsidize Medicaid expansions across the country.
 
And perhaps most importantly, we learned that we cannot do this alone. SCHA and advocacy groups like the Accept ME SC coalition were the only groups advocating for the hundreds of thousands of South Carolinians who could gain health coverage with the expansion of Medicaid. We must continue to work with our local business community and groups like the South Carolina Chamber of Commerce, the insurance industry and the healthcare community to push for expanded health coverage.
 
As an alternative plan for expanding Medicaid under the Affordable Care Act, both bodies adopted Proviso 33.34 offered by Chairman of House Ways & Means Committee, Representative Brian White (R-Anderson). This plan allocates over $80 million towards investments in South Carolina's healthcare system aimed at supporting the state's rural hospitals and free clinics, and expanding access to medical services through telemedicine. Proviso 33.34 directs the Department of Health and Human Services to implement the following accountability and quality improvement initiatives:
  • Healthy Outcomes Initiative: $35 million for a Medicaid rate increase for hospitals that participate in healthy outcome initiatives to reduce cost and improve outcomes instituted by DHHS;
  • DSH Payment Accountability: require hospitals to submit certain claims data and obtain patient attestations as to their access to affordable health insurance;
  • Rural Hospital DSH Payment: $20 million for rural hospitals' uncompensated care allocated from the existing DSH program to take rural hospital payments up to 100%;
  • Primary Care Safety Net: $14 million to reimburse safety net providers to provide primary care, behavioral health and pharmacy services to qualifying safety net providers (Federally Qualified Health Centers, Rural Health Clinics, Free Clinics, Welvista);
  • Rural Provider Capacity: DHHS must develop incentives for rural physician coverage and capacity by leveraging the GME program and expansion of telemedicine;
  • Community Care Residential Care Optional Supplement; and
  • $8 million for the MUSC Hospital Authority to expand its telemedicine network and partner with rural hospitals to expand access to care
SCHA is working with DHHS to ensure that the directives in the proviso are reasonable and equitable.

While we did not achieve the outcome we hoped for this session, SCHA is encouraged by the progress we made in educating the General Assembly and the public on the importance of Medicaid expansion. Our campaign to reclaim our federal healthcare dollars to provide health coverage to more South Carolinians is far from over. We will continue to engage the Republican leadership on bipartisan solutions to leverage our federal tax dollars to expand health coverage. Thank you for your efforts this session to advocate for Medicaid expansion, and we will count on your support again in 2014 as we fight to keep our healthcare dollars in South Carolina.		  

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  Certificate of Need  
  While the Certificate of Need (CON) program appeared to be on a much friendlier path this year, it ultimately ended up being one of the most controversial issues of the 2013 legislative session.
 
It all started in December 2012 when Governor Haley issued her executive budget for the 2013-2014 fiscal year. Surprisingly, she did not exclude funding for CON, and only asserted that there be “no additional funding for the Certificate of Need process.” This position was upheld by Department of Health and Environmental Control (DHEC) Director Catherine Templeton during early budget hearings for her agency in January when, at the request of Healthcare Subcommittee Chairman Rep. Murrell Smith (R-Sumter), Templeton stated that Governor Haley would not veto the CON program this year. Templeton reported to the committee that the DHEC CON Review Panel was working on statutory recommendations to improve the CON process.
 
In March, a DHEC-supported bill (S.568) to streamline the CON process was introduced by Senators Harvey Peeler (R-Cherokee) and Ray Cleary (R-Georgetown). S.568 received its first subcommittee hearing in early April when Templeton assured the subcommittee that her agency was committed to reforming CON. “We want to keep this bill clean because if one person tries to amend, everyone will try to amend and we would like to see some real reform on this,” said Templeton. Despite concerns over some of the language in the bill, SCHA did not amend S.568 at the behest of Templeton and out of respect to the work of the DHEC CON Workgroup. The SCHA Advocacy Team made attempts to approach senators about S.568 and they were strong in their support of CON, but reluctant to hurry through legislation that was so impactful on the healthcare industry.
 
Fast forward to June 25 when Gov. Haley issued her veto message on the 2013-2014 state appropriations bill with less than 24 hours before the House was set to vote on the vetoes. Gov. Haley vetoed funding for CON citing that the program was overly bureaucratic and political and she wanted to let the free market reign. The SCHA Advocacy Team immediately reached out to House leadership and was told that they would override the veto just as they had done the last two years. However, after a heated caucus meeting the following morning, House leadership reported that the veto would be sustained and DHEC would have to move funding from other sources in the agency. Their goal was to send the Administration a message about unfunded mandates, as the CON Program was still required by law, but the Governor was attempting to remove its funding. Apparently that message was not received as the House intended.
 
On July 1, DHEC suspended the CON program on the grounds that both the executive branch and legislative branch had spoken, and the program would not operate in the current state fiscal year. Following DHEC’s press release, House leadership immediately issued their own press release explaining that suspending the CON program was not their intention. “If the Governor and the agency director wish to unilaterally discontinue the program…then that is a decision that lies exclusively within the executive branch and one which may be contrary to law but is certainly contrary to the will and intent of the House of Representatives,” stated the release from Chairman Brian White and Rep. Murrell Smith.
 
DHEC followed their press release with an immediate petition to the Supreme Court with SCHA and the South Carolina Health Care Association, who represents approximately 150 nursing home facilities in the state, listed as respondents. DHEC is asking the Supreme Court to clarify the future of CON as the law requiring the program is still on the books, but all funding for the program has been eliminated. We are now awaiting further direction from the Supreme Court and receiving legal counsel on how to proceed. And we would suggest that all hospitals do the same. In the midst of the intense media coverage and flurry of press releases, SCHA issued the following statement:
 
“In her veto message, Governor Haley expressed her desire to free up the market by removing CON regulations. But her veto has accomplished exactly the opposite. Since the CON law remains in statute, healthcare facilities must secure DHEC approval before building new facilities, but DHEC will no longer act on their requests. Pending approvals will not be granted, bond financing will be unavailable for major projects, and new applications will not be considered. Instead of freeing up the market, Governor Haley has paralyzed it. Unless the administration acts to resolve the uncertainty it has created in the marketplace, the only avenue available to healthcare facilities will be costly litigation.
 
We are encouraged by the statement released by House leadership stating that it was not their intention to eliminate the CON program. With large economic development projects and jobs now on hold and with the real threat of costly litigation, we strongly urge the Governor and her administration to come together and resolve this issue.”		  

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  Telemedicine  
  Both the House and Senate introduced legislation to define the practice of telemedicine and require insurance companies to reimburse providers for telemedicine consultations. Both bills were supported by SCHA, MUSC, and other stakeholders in the South Carolina healthcare industry. While the House bill did not muster a hearing this session, the Senate bill (S.290) successfully made it out of the Senate, eventually hitting a roadblock in the House Labor, Commerce and Industry (LCI) subcommittee.
 
S.290, the South Carolina Telemedicine Act, was introduced by Senator Ray Cleary (R-Georgetown) in January and immediately met with opposition by the insurance industry in subcommittee. Representatives for the SC Alliance of Health Plans insisted that a pilot needed to be crafted that “measures opportunity for growth, reducing costs, and increasing outcomes.” Supporters of telemedicine countered that telemedicine is nothing new, and that other states have been utilizing telemedicine for years to improve access to care. After the bill was carried over for several subcommittee hearings, both sides agreed to a compromise that allowed the South Carolina Public Employee Benefits Authority (PEBA) to pilot the program with state employees with the hopes of eventually making telemedicine a reimbursable service for all South Carolinians. The legislation was referred to the House LCI subcommittee in April where it remains for the 2014 session.
 
The South Carolina Telemedicine Act as passed by the Senate and currently pending before the House LCI Health Insurance Subcommittee is compromise legislation agreed upon by stakeholders, primarily insurance and healthcare providers. As currently drafted, the bill:
  • requires coverage of telemedicine services by the State Public Employee Benefit Authority;
  • creates a 13 member Telemedicine Advisory Council to study telemedicine outcomes, evaluate reimbursement rates and make recommendations regarding the further development and use of telemedicine; and
  • requires findings be reported to the General Assembly and PEBA by July 15, 2015.
 
The purpose of telemedicine is to increase cost efficiency, improve access to care, and strengthen the quality of care and communication among providers by expanding the practice of medicine to services offered via audio and video telecommunications systems. Telemedicine allows citizens living in underserved areas to access specialists via computer or telephone, and allows healthcare providers to be reimbursed for those services. A more comprehensive piece of legislation is expected to be introduced next year, so it is possible that S.290 may not be the vehicle for telemedicine after all. SCHA will continue to advocate for telemedicine in the 2014 legislative session.		  

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  Enacted Legislation  
  Pulse Oximetry Screening – S.341 (Alexander): The “Emerson Rose Act” requires all birthing facilities licensed by DHEC to perform Pulse Oximetry Screenings on every newborn within 24-48 hours of birth, or as late as possible if being discharged before reaching 24 hours of age. The bill was pushed by the Emerson Rose Heart Foundation, which was established after the tragic death of infant Emerson Rose from a congenital heart defect. SCHA worked with bill sponsor Sen. Thomas Alexander (R-Oconee) to improve the legislation so that DHHS coordinates the pulse oximetry screening program through the SC Birth Outcomes Initiative and provides reimbursement for the screening. S.341 was signed by Gov. Haley and takes effect on 9/11/13. The majority of SC birthing facilities already perform pulse oximetry screenings, but all birthing facilities should be prepared for this new law.
 
Patient Disclosure of Health – S.117 (Hayes): The “Adult Healthcare Consent Act” was signed into law on June 7 and takes effect on January 1, 2014. S.117 amends the Adult Health Care Consent Act to require a provider to include on the patient information form an opportunity for the patient to designate an individual with whom the provider may discuss the patient’s medical condition and treatment. The bill allows, but does not require, that the health care provider may discuss the patient’s medical condition and treatment plan with a designated individual. Patients may be asked in writing, “Do you want to designate a family member or other individual with whom the provider may discuss your medical condition: If yes, whom?” The patient must also be informed that this authorization may be revoked or modified. Again, this is a practice that is already required under federal law and practiced by the majority of SC hospitals. The bill was amended at the request of SCHA so that no new form was required, and facilities can just add the question to existing patient forms. All hospitals should be aware of this new state requirement.
 
Physician Assistant Practice Act – S.448 (Alexander): The “Physician Assistant (PA) Practice Act” expands the scope of practice for PA’s by increasing the number of PA’s that a physician may supervise from 2 to 3, authorizes PA’s to prescribe orally administered schedule II drugs under certain requirements, and increases the supervisory distance between a PA and their managing physician from 45 to 60 miles. S.448 also requires that a licensed physician supervising a PA enters into a supervisory agreement with the PA and notifies the Board of Medical Examiners. The bill was signed into law by Gov. Haley on May 21.		  

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  Bills to Watch in 2014  
  Truth in Health Financing and Responsible Consumer Health Care Act – H.4095 (Crawford): H.4095 creates the “Responsible Consumer Health Care Program" using Medicaid expansion funds provided to SC under the ACA to provide health care access from 2014-2016 for eligible South Carolinians. The bill requires individuals to have medical spending accounts and utilizes Medicaid expansion funds to provide insurance to individuals. SCHA is working with Rep. Kris Crawford (R-Florence) on this worthy alternative to Medicaid expansion. H.4095 is awaiting a hearing in the House Ways and Means Committee.
 
Certificate of Need Reform – S.568 (Peeler): This CON bill is based on the recommendations of the DHEC CON Review Panel to streamline the CON process and make it less onerous on health care providers. As currently pending the Senate calendar, the bill increases the capital threshold from $2M to $5M, eliminates the $600k equipment threshold, imposes a $1.5M threshold on “new and emerging technologies,” and provides a “loser pay” provision for those that apply for CON’s. The fate of S.568 is even more unclear with the recent drama surrounding CON. The bill is currently on the senate floor.
 
Personnel Action Based on Use of Tobacco – S.180 (Bryant): This legislation eliminates the current protection of tobacco users from employment practices and policies. Tobacco-free personnel policies continue to be a top priority for SCHA as we attempt to tackle the escalated health care costs, higher absenteeism and lost productivity resulting from employees’ use of tobacco. S.180 received a hearing this session in the Senate Labor, Commerce and Industry (LCI) subcommittee, but was not reported out favorably despite testimony from SCHA CEO Thornton Kirby and representatives from AnMed Health and Palmetto Health. The bill remains in the Senate LCI subcommittee for the 2014 session.		  

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July 12, 2013