How civil disobedience could benefit hospitals

With the government shuttered, you'd think my email inbox would get a temporary reprieve from something like this: Rep. Diane Black berating insurer Community Health Alliance's offer of smartphones to people who purchase its coverage through Tennessee's insurance exchange.

It turns out the smartphones are configured to make it far easier for enrollees to communicate with their caregivers. They also provide specific information on less pricey after-hour alternatives to emergency rooms, such as urgent care sites. To get a smartphone, an enrollee would have to enter a wellness program and visit a primary care doctor within six months of purchasing coverage.

I estimated if every fifth CHA enrollee avoids an ER visit or hospitalization once a year, the phones would pay for themselves.

Black, a nurse by training who is married to a physician, apparently crunched different numbers. "This is an absurd abuse of taxpayer money and a reminder of just how pathetic of a program (the Affordable Care Act) is," she insisted in her statement.

I spoke briefly with Tom Flanagin, Black's media liaison, to ascertain where taxpayer money comes into play, as the CHA made clear enrollee premiums were paying for this program. Flanagin said he'd get back to me.

I presume Flanagin was furloughed not long after he hung up the phone, because he hasn't responded to my subsequent calls and emails.

Black's opining came just a day after a heartbreaking New York Times story noting that the states rejecting Medicaid expansion--Tennessee included--are home to nearly 70 percent of the nation's poor uninsured African-Americans. Many earn far too little to qualify for tax subsidies to purchase coverage on the insurance exchanges, which means they're shut out from the ACA entirely.

Although the Volunteer State has the most generous income eligibilities for Medicaid in the Deep South, a single person earning $10,000 a year won't qualify for subsidies. By contrast, someone earning $11,491 could purchase subsidized insurance for $19 a month. In some other states, the subsidized premiums would be as low as $1 a month.

But residents of most other Southern states aren't even this fortunate. Willie Charles Carter, a resident of Mississippi, earns $3,000 a year--poverty-level wages as far back as the 1960s. But since he has no dependent children, he doesn't qualify for Medicaid coverage at all. "You got to be almost dead before you can get Medicaid in Mississippi," he told the Times.

This can't be heartening news for the state's hospitals, which aside from operating in the nation's poorest state, are also facing DSH-related Medicare and Medicaid cuts totaling $4.2 billion over the next decade.

Residents of Alabama, Louisiana and Texas enjoy similar eligibility guidelines, while its hospitals are facing the same DSH cuts. Little wonder the American Hospital Association wants to put them off for a couple of years.

The Times, to its credit, probed the role of race in these policy decisions--an issue woefully underreported to date.

"If you look at the history of Mississippi, politicians have used race to oppose minimum wage, Head Start, all these social programs. It's a tactic that appeals to people who would rather suffer themselves than see a black person benefit," Aaron Shirley,  M.D., a physician who practices in the state, told the Times

So, what's to be done?

Katherine Hempstead, a program officer with the Robert Wood Johnson Foundation, suggested the possibility of having hospitals form arms-length charitable groups to supplement the incomes of some of the sickest people in these states in order to help them qualify to purchase subsidized insurance. "It just came to me," Hempstead told me after a presentation she made last week in Southern California where she put forth this proposal.

However, Hempstead and other experts also warn this could violate Stark anti-kickback guidelines without close legal vetting--and no doubt a court fight. This would make such an approach unlikely to occur for years, if at all.

There could also be a legislative solution to close the current coverage gap in the Medicaid opt-out states. However, given the ACA-driven lunacy that currently reigns in the House, that is not going to happen until at least 2015, and only if the mid-term elections break for supporters of healthcare reform.

There remains a third option: Civil disobedience by those disenfranchised from the ACA.

What would happen, for example, if someone like Willie Charles Carter applied for insurance on his state's exchange and reported he expects to earn $11,491 next year? He'd get coverage, and it's possible he could even scrape up the premiums--perhaps with the help of a local charity.

Willie Charles Carter might not even be breaking any laws, as the Internal Revenue Service is only asking for income estimates for exchange applicants during this first enrollment period, not hard figures. And while some people might face tax penalties for underestimating their income, there is no apparent penalty for overestimating it.

What if, say, 100,000 people throughout the states that refused to expand Medicaid--only about 1.4 percent of those currently barred from coverage--did exactly the same?

It would be an interesting to watch the federal and state governments try to yank away health insurance from all these people because they thought 2014 would be a monster year for them and they expected to earn nearly $12,000. Maybe some hardline prosecutors would try to put them in jail for fraud (where, ironically, the government would have to provide them access to healthcare services).

Of course, hospitals would almost certainly be violating federal kickback laws if they encouraged this kind of conduct. However,it would certainly benefit them directly. 

It might be time for the nation's civil rights leaders to discuss this kind of strategy. And in this era where healthcare delivery is rapidly mashing up with social media, tablets and even smartphones, perhaps they could even create an app for that.
- Ron (@FierceHealth)

Related Articles:
ACA expansion leaving out millions of blacks, single moms, poverty-level workers
AHA pushing for 2-year delay in DSH cuts
Shutdown enters Day 4 with no end in sight


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