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Teaching Hospital Update - December 10-14, 2012


Email Alert

December 14, 2012

By Allison Cohen*

UCLA Medical School Receives $100 Million for Scholarships

LA Times (12/12) reports that David Geffen School of Medicine received a $100-million gift to provide scholarships for thirty-three students starting in 2013. The gift provided by the school's benefactor, David Geffen, will start a scholarship fund in his name to fully fund the medical education of recipients who will be selected based on merit. Geffen's statement indicated that he wanted to support "future innovators, doctors and scientists" pursue their chosen path and receive a world-class medical education without the "fear of crushing debt." Debt concerns can influence career choices and have contributed to provider shortages. More than 85% of medical school graduates have accrued debt. Geffen's gift will help free up financial aid money at the institution so that more students can receive assistance in pursuing their medical school goals to become tomorrow's doctors.

Report: Medicaid Expansion Would Benefit Hospitals and State Economies

American Medical News (12/10) reports that research conducted by the Urban Institute for the Kaiser Commission on Medicaid and the Uninsured showed that as a result of reduced uncompensated care costs, hospital revenues would increase by more than $300 billion over a decade if states choose to expand their Medicaid programs in 2014. The federal government, rather than states, would cover most of the costs of expansion for the first decade. State spending on Medicaid expansion during this period would increase less than 3% and the increased federal spending would generate economic activity in the state. The increased revenue to hospitals would partially offset the impact of another provision in the Affordable Care Act, which requires a $56 billion reduction in disproportionate share hospital payments, which are used to compensate hospitals that frequently treat uninsured and underinsured patients who cannot pay for their own care.

Massachusetts Adopts New Payment Models to Curb Healthcare Spending

LA Times (12/13) reports that thousands of Massachusetts physicians are receiving payment incentives if patients stay healthy and avoid costly medical care. This shift in how healthcare is financed has been adopted in pockets throughout the country, but Massachusetts is taking a leading role. Due to a healthcare reform initiative, about 180,000 Massachusetts seniors will have their care paid for through this new model, which moves away from the traditional fee-for-service payment system and emphasizes preventive care and cost control. Massachusetts also passed state legislation that will move 1.7 million government employees and Medicaid beneficiaries into health plans that also make this shift. It is estimated that in a few years, about half of Massachusetts residents will be enrolled in health plans that adopt this approach to paying for healthcare. While Massachusetts still has the highest medical costs, the state is an innovator in adopting new payment models, such as global payment with pay-for-performance, in order to change this. If this proves to be sustainable and quality of care continues to be emphasized, Massachusetts could again serve as a model for healthcare reform.

Partial Medicaid Expansion Will Not Receive Federal Funding According to HHS

Kaiser Health News (12/10) reports that this week U.S. Department of Health & Human Services Secretary Kathleen Sebelius announced in a letter to state governors that states will not get the federal funding the Affordable Care Act (ACA) provides for Medicaid expansion if they only partially expand their Medicaid programs. States have requested this flexibility since the U.S. Supreme Court made the ACA provision requiring states to expand their Medicaid programs optional. The decision clarifies that states will not get federal funding if they choose to increase Medicaid eligibility, but stop short of expanding the program to anyone earning up to 138% of the federal poverty level. States can seek a waiver in 2017 for a partial expansion, but they will only receive the waiver if they can show they can find a way to provide comparable coverage and benefits as if they had fully expanded Medicaid. The decision will eliminate some uncertainty surrounding Medicaid expansion. To date, nine states say they will not expand Medicaid and seventeen have committed to participate in the expansion. States do not have a deadline, but will receive federal funding only when they have extended eligibility to the required population.

Parties Still Far Apart in Negotiating a Solution to Avoid the Fiscal Cliff

Politico (12/12) reports increased skepticism that lawmakers can reach a deal to avoid the fiscal cliff. On Monday, the White House offered $1.4 trillion in revenue and $600 billion in entitlement cuts. Speaker of the House John Boehner (R-OH) countered with an offer of $800 billion in tax revenue and over $1 trillion in spending cuts. Therefore, there is still a large gap and the two sides remain at an impasse as we approach the January 1 deadline.

*We would like to thank Allison Cohen, JD, LLM (Association of American Medical Colleges, Washington, DC), for providing this week's update.

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