Rural hospitals gird for unwinding of pandemic Medicaid coverage

Millions of people are expected to lose their Medicaid eligibility in the coming months as states return the programs to pre-COVID status. The loss of that revenue is expected to hurt struggling rural hospitals. (Photo by Win McNamee/Getty Images)

Experts say looming change underscores the urgency of Medicaid expansion bill advancing at the General Assembly

Donald Lloyd, CEO and president of St. Claire HealthCare in Morehead, Kentucky, has spent more than a year dealing with higher costs for food and medical supplies for his regional hospital. Now he’s trying to prepare for another financial hit — the loss of Medicaid reimbursements for treating people in rural Appalachia.

“We are all being forced to try to eke out a sustainable margin because of those [inflation] factors,” he said. “And then with the potential loss of reimbursement for those who did qualify, that’s just going to add an additional layer of burden upon rural institutions.”

Lloyd is referring to the unwinding of a policy that began in 2020 as a response to the public health emergency created by COVID-19. The ??Families First Coronavirus Response Act required states to allow Medicaid recipients to stay enrolled even if their eligibility changed. But that requirement ends on April 1, and with states once again able to remove people from the program, health care officials across the country are worried about how the loss of those Medicaid reimbursements will affect the financial health of their hospitals.

The loss of the federal revenue is expected to be particularly hard on rural hospitals that operate in areas with higher poverty rates and serve an older population and people with lower incomes — all factors that contribute to the financial pressure on hospitals, health care officials said. Rural hospitals were already closing at a rapid rate before the pandemic — more than 150 closed between 2005 and 2019, according to the Center for Healthcare Quality and Payment Reform. Without the federal money to prop them up, the Center estimates that 200 rural hospitals across the country are at risk of closing within the next two to three years.

A report released in January from George Washington University found that up to 2.5 million patients of community health centers, which treat both underserved rural and urban communities, could lose coverage as a result of eligibility redeterminations, costing the health centers somewhere from $1.5 billion to $2.5 billion in revenue. The Kaiser Family Foundation estimates that between 5 million and 14 million people will lose their coverage, and that two-thirds could be uninsured for several months up to a year. Read more

White House launches new push to help states remove lead pipes that carry drinking water

U.S. House GOP takes aim at fake pills containing deadly fentanyl sold on social media

Appeals Court to hear arguments on transgender health care ban for state employees

The U.S. Court of Appeals for the Fourth Circuit will hear oral arguments Wednesday in a case in which the state was found to have violated the rights of state employees and their families with a blanket exclusion of gender-affirming care for transgender people under the state health plan.

Last year a federal judge in Winston-Salem ruled the ban violated the Equal Protection Clause of the U.S. Constitution and Title VII of the Civil Rights Act of 1964 through discrimination based on sex and transgender status. That decision came just months after the U.S. Supreme court denied the state’s petition to review a lower court ruling that the state health plan wasn’t entitled to sovereign immunity and could be sued for violating the nondiscrimination provisions of the Affordable Care Act.

Connor Thonen-Fleck, 16, flanked by his parents Alexis Thonen and Jason Fleck at a 2019 press conference announcing the original suit.

In 2019, Lambda Legal and the Transgender Legal Defense & Education Fund (TLDEF) brought the original suit, Kadel v. Folwell, on behalf of eight plaintiffs – current and former state employees and their children – who were denied coverage under the state health plan. Their victory was celebrated by the LGBTQ community, along with a successful suit to allow transgender people born in North Carolina to change the gender marker on their birth certificates without undergoing medical transition. The appeal comes as transgender issues continue to be the focus of national political debates and State Treasurer Dale Folwell, who opposed the coverage from his initial run for that office, is increasingly seen as a likely Republican candidate for governor.

“We are confident that the district court’s decision is going to stand the test of time,” said Tara Borelli, one of the attorneys handling the case for Lambda Legal. “It’s so thorough and so well-reasoned that we don’t believe there is any basis to show reversible error.”

The defendants have never been able to offer any good explanation for excluding care for health care specific to transgender people, Borelli said, and courts across the country have found and continue to find those exclusions discriminatory.

“I don’t think they’ve advanced any argument on appeal that would persuade otherwise,” Borelli said.

As Policy Watch has reported, the board of trustees of the state health care plan voted to begin covering treatments for gender dysphoria at the end of 2016, near the end of Janet Cowell’s term as State Treasurer. The move was necessary to comply with the Affordable Care Act. When Folwell came into office in 2017, he made it clear he opposed the move, calling transition-related care elective and unnecessary.

The plan’s trustees allowed the coverage to expire at the first opportunity — not renewing it for the 2018 plan year or for 2019.

Blue Cross/Blue Shield of North Carolina, the company which until recently administered the state health plan, has recognized dysphoria as a serious medical issue and covered treatments related to transition, including hormone therapy and gender confirmation surgery. Transgender patients and their doctors have testified before the plan’s board of trustees that the treatment is necessary and life-saving.

The American Medical Association and the American Psychological Association recognize gender dysphoria and transition-related care to treat it as medically necessary and potentially life-saving. A myriad of professional medical organizations have called for an end to transgender-focused exclusions in public and private health insurance policies.

Despite that, Folwell continued to describe the care as elective and to concentrate only on surgeries, just one part of transgender health care the blanket exclusion prevented families from accessing. Many transgender people elect not to have any surgery related to their transition. The blanket exemption excludes not just surgical procedures but coverage of all treatment related to gender dysphoria – including things like hormone treatment and even talk therapy. Similar treatments available to patients who are not transgender are covered under the plan.

“Until the court system, a legislative body or voters tell us that we ‘have to,’ ‘when to,’ and ‘how to’ spend taxpayers money on gender reassignment surgery, I will not make a decision that has the potential to discriminate against those who desire other currently uncovered, elective procedures,” Folwell said in the statement shortly after the original suit was filed

The court did issue a clear order, Borelli said, but Folwell’s office continues to fight it.

“The trial court ordered a permanent injunction, requiring the plan to provide the care,” Borelli said. “The defendant sought to stay that order two times, first in the trial court and then again in the appeal court. Both courts rejected that request. So the permanent injunction remains fully in effect and we’re optimistic that injunction will be upheld once all appeals are done.”

Oral arguments begin Wednesday at 10 a.m. at the Lewis F. Powell Jr. Courthouse & Annex in Richmond, Virginia. A livestream of the arguments is available here.


More states are doing what they can to cap insulin costs

This report was first published by Stateline, an initiative of The Pew Charitable Trusts.

North Carolina lawmakers have yet to take action to protect consumers

In her early 20s, Karisa Hunt learned the hard lesson of what happens when someone rations life-preserving medication.

Hunt was diagnosed with Type 1 diabetes as a 4 year old and has been on insulin since then to help control her blood sugar levels. But while in college and feeling guilty for saddling her parents with high copays for the insulin, she started lowering her prescribed dosage. “It was a little less here, a little less there,” she recalled recently.

It proved a life-altering decision, one that resulted in two surgeries in each eye and, ultimately, the complete loss of vision in her left one.

Once she was out of college and on her own health insurance plan, Hunt couldn’t afford the $400 monthly copay. With rationing a no-go, she found another, still less-than-desirable solution: a low-cost, older version of insulin sold at Walmart.

It didn’t control her diabetes nearly as well, and it left her sicker more often. She worried about long-term damage to her kidneys and the nerves in her limbs. Still, it cost her a doable $75 a month. She told herself she had no choice.

“It felt like I was trading away years at the end of my life to stay alive now,” said Hunt, who is now 36, works in marketing and lives in Commerce City, Colorado, just northeast of Denver.

But 2019 brought a welcome change: Colorado became the first state to pass a law that set a $100 limit on the monthly out-of-pocket expenses some diabetes patients would be required to pay for their insulin. All at once, she could afford the optimal insulin for her.

“It felt like it was giving myself years of my life back,” Hunt said.

In response to the steep rise in out-of-pocket costs for insulin over the past two decades — enough to compel many diabetic patients, like Hunt, to ration their use of the medicine — nearly two dozen states have passed measures in the past few years capping the out-of-pocket costs for some patients.

Last year, Louisiana and Maryland became the latest, bringing the total to 22 plus Washington, D.C. Other states are poised to consider similar measures this year, including Nebraska and New Jersey. Read more