Response to Rep. Bishop, et al. October 11, 2022
Representatives Bishop, Bourdeaux, Johnson, McBath, Scott, and Williams:
Thank you for your letter concerning the impending closure of Wellstar Atlanta Medical Center (AMC) and its effect on access to healthcare in the Metro Atlanta Region. At such a pivotal time when we should be working together to find solutions for our constituents, it is deeply disappointing to see members of Georgia's Congressional delegation perpetuating falsehoods in an effo1t to advance a misguided political narrative. Despite the claims in your letter, Wellstar stated unequivocally that Medicaid expansion "would not have changed this outcome." The truth is that Medicaid has expanded in Georgia, and the "full" expansion so often pitched as a panacea would shift a significant number of Georgians away from private coverage, only exacerbating the financial challenges faced by hospitals, as explained below.
My administration recognizes these truths and thus acted promptly in response to the AMC closure to support the Atlanta area hospital network. I am confident in this plan and in the many great strides Georgia has made over the past four years to improve our state's healthcare system. I am especially thankful to the leaders from Fulton County, DeKalb County, and the City of Atlanta for their collaboration in mitigating the consequences of this closure.
I was proud to stand with Fulton Chairman Rob Pitts and DeKalb CEO Michael Thurmond to announce we will allocate $130 million in American Rescue Plan funds to Grady Health System, which "'rill be utilized to expand capacity at Grady Memorial Hospital by more than 185 beds. This increase will more than cover AMC's average patient census. The state is also moving a 24-bed temporary unit to Grady to address immediate increased demand as permanent beds are added over the coming weeks and months. The additional capacity, made possible by these funds, will be combined with significant philanthropic support to provide critically needed functionality to cover the patients whom AMC currently serves.
In addition, this past summer the state announced additional funding to both Grady Health System and Augusta University Health Center through the implementation of a new value based, hospital directed payment program called Georgia's Advancing Innovation to Deliver Equity (GA-AIDE). By committing to achieving quality of care metrics, both health facilities are eligible to receive reimbursement rates that approach commercial rates for their Medicaid population. The Department of Community Health (DCH) has delivered the first of three scheduled payments to Grady in additional reimbursements for care provided this fiscal year, meaning those funds can be fully applied by Grady to any of its priorities. The amount of the first payment is approximately $133 million (more details on the GA-AIDE program are included below). This reimbursement payment, along with the American Rescue Plan fund allocation and temporary medical unit, will allow Grady to absorb the impact from AMC's closure and continue providing quality care to new and existing patients.
As the hospital itself confirmed, traditional or "full" Medicaid expansion would not have saved AMC. In 2018, former State House Minority Leader Stacey Abrams boldly proclaimed that if elected Governor, she would expand Medicaid in Georgia to "cover nearly 500,000 more Georgians." In my tenure as Governor, we have added over 500,000 individuals to Medicaid due in pa1t to the federal COVID public health emergency.
When I took office in January 2019, 2,125,014 Georgians were on Medicaid. As of June 2022, 2,718,866 Georgians were enrolled in Medicaid. That is an increase of nearly 600,000 people now covered, more than Abrams said traditional Medicaid expansion would have added. Thus, Medicaid expansion alone would not have saved AMC because Georgia is already covering more individuals under Medicaid than "full" expansion would have purported to cover.
Furthermore, traditional Medicaid expansion - covering Georgians up to 138% of the Federal Poverty Level (FPL) - would have potentially caused more problems for AMC and other hospitals, significantly limited access to care for patients across our state, and exacerbated health disparities across the population. If Georgia fully expanded Medicaid to 138% of FPL, more than 200,000 Georgians with private insurance would lose access to federal tax subsidies that they use to buy coverage and instead be forced into Medicaid coverage. It would hurt both patients and providers because, as you know, healthcare providers actually lose money when they serve Medicaid patients.
For example, hospitals are currently reimbursed at 85.6% of the cost of outpatient services by Medicaid compared to roughly 130%-140% of costs by commercial insurance. Therefore, full Medicaid expansion would reduce reimbursements for hospitals serving any of these 200,000 patients currently on private insurance. A reduction in the number of Georgians on private insurance is not a long-term strategy for addressing facility closures across our state.
We also do not have enough Medicaid providers in our state. While my administration and the General Assembly have made historic investments in health education, infrastructure, and workforce to tackle this problem, there is still more to do.
Currently, only 64% of providers accept Medicaid, and only 60% of providers are accepting new Medicaid patients. Only 58% of providers in Fulton accept Medicaid, and only 56% of providers in DeKalb accept Medicaid. In Dade and Madison counties, only 50% and 40% of providers accept Medicaid, respectively. Private insurance carriers, on the other hand, have far more robust networks available to consumers. Forcing 200,000 Georgians to forfeit private healthcare coverage for an already strapped provider network will limit access not only for those individuals, but dramatically disadvantage the most vulnerable Georgians for which Medicaid primarily exists. We cannot, in good conscience, transfer 200,000 people from private insurance to Medicaid when existing recipients - those with intellectual or developmental disabilities, pregnant women, young children in low-income families, and the elderly who need around-the-clock care - already struggle to get necessary appointments and treatment.
Fortunately, innovative solutions exist beyond placing additional burden on our existing Medicaid program. With the support of my colleagues in the General Assembly, my administration has proactively addressed coverage gaps since my first day in office. During the 2019 legislative session, we championed and passed the Patients First Act, which authorized Georgia to submit two waivers - first, a demonstration waiver under Section 1115 of the Social Security Act called Georgia Pathways to support partial expansion of Medicaid for able-bodied but low-income Georgians under 100% FPL; and second, a Section 1332 waiver under the Patient Protection and Affordable Care Act called Georgia Access for private insurance coverage. Federal regulators approved both waivers in 2020.
Georgia Pathways charts a common-sense approach for uninsured, able-bodied, and low income adults aged 19 to 64 to secure safety-net coverage through Medicaid. Georgia Pathways will voluntarily expand Medicaid to tens of thousands of otherwise-ineligible Georgians if they take measurable steps towards improving their communities by conditioning coverage on beneficiaries meeting, and continuing to satisfy, a minimum number of "qualifying hours" earned through work, job training, education, volunteering, and similar activities. Right now, our state healthcare team estimates that there are 345,000 Georgians eligible for Georgia Pathways if they were to pursue coverage and comply with the program parameters. Inexplicably, however, in the midst of the global COVID-19 pandemic, the Biden administration illegally rescinded core elements of the program, causing a significant delay in implementation. Through this delay, President Biden wrongly deprived as many as 345,000 Georgians of innovative healthcare coverage for over a year for purely political reasons. At my behest and with Attorney General Chris Carr's support, Georgia sued the federal government, and in August, we prevailed in federal district court, with a judge finding the Biden administration's recission unlawful and allowing implementation to move forward. The state is now moving expeditiously to implement Georgia Pathways and to extend safety-net coverage to more families.
A key distinction between traditional Medicaid expansion and the Georgia Pathways and Georgia Access waivers is that traditional Medicaid expansion does nothing to provide relief or assistance to Georgians purchasing private healthcare insurance through the individual market. On November 1, 2020, the state received federal approval to implement Georgia Access, which is designed to address the needs of those Georgians and support the overall state healthcare system through two key components. Part I establishes "reinsurance" - essentially, state and federal funding to stabilize high costs of care for Georgians with serious or preexisting medical conditions - for five years beginning in the current Plan Year 2022. The program reimburses claims at different percentages based on a three-tiered geographic structure designed to ensure for greater premium relief in regions with the costliest plans and encourage more carriers to participate in underserved areas. Part II addresses the barriers which Georgians currently encounter when attempting to enroll in healthcare coverage on healthcare.gov, which remains poorly designed and exceedingly difficult to navigate. Despite billions of dollars in federal tax subsidies over the years, more than 800,000 Georgians eligible for subsided insurance at reduced cost, little cost, or no cost at all, remain uninsured. Our waiver offers a new, state-operated model where individuals enroll in coverage through private carriers and web-brokers, which are better equipped to advise customers on options and walk them through enrollment. Unfortunately, these efforts are paused due to political gamesmanship by the Biden administration, which improperly suspended Part II in August despite thousands of man hours and millions of dollars spent to move the project forward.
The Georgia Access Waiver's reinsurance program has already proven to be extremely successful in its first year. Premiums have decreased 12% statewide, representing $850 in annual savings for Georgia families shopping on the individual marketplace. In rural counties where premiums are highest, reinsurance has reduced premiums from 25% to over 30%. For a 50-year-old Georgian buying a silver plan on the marketplace, this reduction amounts to annual savings of $2,500 to over $4,300. Georgia Access has also increased coverage options. In 2019, Georgia had only four insurance carriers offering plans on the individual market. Today, we have nearly tripled that number with eleven carriers in the market. Back in 2019, only 26% of Georgia's counties had more than one carrier offering insurance on the individual market. Now, 98% of all counties have more than one carrier, which means dramatically greater access in rural and underserved areas of the state.
Reduced premiums and expanded choice resulting from Georgia Access have led to increased enrollment in the individual market: 278,446 more Georgians enrolled in individual market commercial plans-from 373,049 in 2019 to the current enrollment of 651,495-during my first term.
In addition to the innovative Pathways and Access Waiver programs, over the course of my first term in office, Georgia has made many historic improvements and investments in healthcare:
- Mental Health: During the 2022 session, I signed several major reforms regarding mental health into law, including HB 1013, known as the Mental Health Parity Act, led by House Speaker David Ralston to ensure Georgians suffering from behavioral health issues have access to necessary care. Additionally, I signed legislation creating co-responder teams across the state, licensure for additional residential and therapy facilities for adults with mental illness, and a pathway for patients to maintain psychiatric advanced directives to express his or her mental healthcare treatment preferences.
- Postpartum Medicaid Coverage: I approved an extension of postpartum Medicaid coverage from six months to twelve months by signing SB 338 and included an appropriation of an additional $83.5 million in the FY 2023 budget ($28.2 million in state funds). This further increases Georgia's initial extension of coverage for up to six months postpartum currently in place by legislation passed in 2020 and supp01ted by $59.7 million in new funding in the FY 2021 budget ($19.7 million in state funds).
- Georgia Healthcare Workforce Commission: My administration created this Commission earlier this year to address ongoing staffing challenges at healthcare facilities across the state. The Commission will issue a final report at the end of this year.
- FY2023 Budget Highlights:
- $252.9 million ($85-4 million in state funds) to bring equity to Medicaid provider rates and support existing physicians through the elimination of attestation and reimburse all providers at enhanced rates for all 108 procedure codes;
- $124.3 million for the implementation of the state reinsurance program to reduce insurance premiums statewide, pursuant to the Patients First Act (2019 Session);
- $116.9 million ($39-4 million in state funds) to increase access to Medicaid for children receiving SNAP/TANF benefits through express lane enrollment, pursuant to the passage of HB 163 (2021 Session);
- $83.5 million ($28.2 million in state funds) to extend postpartum Medicaid coverage from six to 12 months, effective upon Centers for Medicaid and Medicare Services approval;
- $47 million ($15.9 million in state funds) for the state match for Disproportionate Share Hospital payments to increase reimbursement rates for private deemed and non-deemed hospitals to offset the cost of uncompensated care and improve financial stability of small and rural hospitals;
- $31.6 million ($10.7 million in state funds) to provide for Medicaid reimbursement of therapeutic services;
- $12.3 million in state funds for a 5% rate increase for providers serving Georgians with intellectual or developmental disabilities (NOW/COMP waivers);
- $4.7 million ($1.6 million in state funds) for Medicaid reimbursement of psychiatric and behavioral health care management services;
- $4 million in state funds for 199 new residency slots in primary care medicine;
- $3 million in state funds for equipment and operating grants for nursing programs with wait lists and additional student capacity;
- $1.5 million ($475,603 in state funds) for a 10% reimbursement rate increase for long-term acute care hospitals (LTAC) and inpatient rehabilitation facilities (IRF);
- $2 million ($653,773 in state funds) for a 10% increase in two dental extraction codes and a 7% increase for 17 select dental restorative codes; and
- $1 million in state funds to Mercer School of Medicine to address rural physician shortages
- FY 2020 - FY 2022 Investments:
- Medicaid Growth: $1.5 billion from FY 2020 to FY 2022 in the Medicaid benefits programs
- Rate enhancement and increases:
- $76.5 million ($19.6 million in state funds) for a 10% rate increase for home and community-based service providers;
- $21.4 million ($7.1 million in state funds) for rate increases for prima1y care and OB/GYN codes;
- $7.2 million ($2.4 million in state funds) for an increase for 108 primary care codes;
- $1.8 million ($575,455 in state funds) for a $150 per diem add-on payment for hospital-based swing bed units;
- $1.2 million ($401,524 in state funds) for an increase in the personal needs allowance; and
- $528,268 ($172,321 in state funds) for supplemental payments to general acute care hospitals with inpatient child and adolescent behavioral health units to achieve a $750 per diem
- Disproportionate Share Hospital Payments: $105.6 million increase from FY 2020 to FY 2022 to ensure private hospitals benefit from the federal Disproportionate Share Hospital (DSH) program
- Skilled Nursing Facilities:
- Over $135 million for skilled nursing facility rate increases, updates, enhancements, and hold-harmless allowances;
- $38 million for a Quality Improvement program for skilled nursing facility providers;
- $2 million for ventilator reimbursements in nursing homes; and
- $250,000 for portable radiography and mobile imaging in long-term care facilities
- Patients First Implementation: $76.3 million in state funds for Patients First Act implementation for developing and implementing Georgia Pathways and Georgia Access
- Maternal Health: $60.1 million to increase post-partum Medicaid coverage from 90 days to six months as well as investment in lactation care for Medicaid enrollees
- New Benefits/Services: $21.5 million for Medicaid reimbursement for new benefits such as gene therapy and silver diamine fluoride
- HCBS Waivers: $18.2 million for new NOW/COMP waivers and case management
- Rate enhancement and increases:
- Workforce enhancements: Placing a priority on increasing Georgia's health care workforce, including:
- $48.5 million to revise IPPS and add new residency slots in primary care medicine, pediatrics, obstetrics and child psychiatry; and
- $9.7 million for new Medicaid providers (LTACs and IRFs); and
- $1.2 million for new programs including planning funds for two new graduate medical education programs, a gynecological oncology fellowship, a primary care residency track, and start-up funds for a rural psychiat1y residency program
- Medicaid Growth: $1.5 billion from FY 2020 to FY 2022 in the Medicaid benefits programs
- GA-AIDE Program: On July 27, 2022, the Georgia Department of Community Health (DCH) announced final federal approval of a value-based, hospital directed payment program aimed at improving health outcomes called Georgia's Advancing Innovation to Deliver Equity (GA-AIDE). Under the program, Grady Memorial Hospital, Georgia's largest single provider of Medicaid services, and Augusta University Medical Center, Georgia's state-owned academic medical center, w:ill benefit from an increased Medicaid payment rate on services provided to Medicaid members through Georgia's managed care program. The program targets new Medicaid funding to improve quality of care for patients through directed payments to eligible safety-net providers, with a portion of the payments being dependent on achieving defined quality metrics. AB a result, it is expected to increase provider funding of critical services for the Medicaid population by a total of $344,633,479 in FY 2023 (State Funds: $116,391,341; Federal Funds: $228,242,138). Not only will GA-AIDE serve as a model for OCH to evaluate improvement statewide and demonstrate measurable impacts on reducing health inequities, it is also expected to free up more than $100 million in Disproportionate Share Hospital funding that can be redirected to other hospitals in the state.
- Other First Term Highlights:
- $143.2 million ($47.9 m:illion in state funds) investment to extend Medicaid coverage to postpartum mothers to improve access to health care services for this population and address maternal mortality.
- The net increase in base budget for OCH from FY 2020 to FY 2023 is $2,554,044,030, $840,108,087 of that total in state general funds ($887,797,015 in total state funds). 99% of all DCH state general funds are budgeted to Medicaid.
- OCH Total Funds:
- FY 2023 $18,203,136291
- FY 2020 $15,649,092,261
- OCH State General Funds
- FY 2023 $3,793,032,160
- FY 2020 $2,952,924,073
- OCH State Funds
- FY 2023 $4,460,399,657
- FY 2020 $3,572,602,642
- OCH Total Funds:
The abrupt closure of AMC was not anyone's preference. Notwithstanding, through working with our state partners and local leaders in Fulton and DeKalb counties, we have announced and deployed a plan to increase bed capacity at Grady Memorial Hospital that will more than cover AMC's regular patient counts. Unfortunately, some continue to use the AMC closure as an opportunity to push the false political narrative that Medicaid expansion would have saved AMC and addressed all our other healthcare challenges. AB demonstrated above, this is untrue.
Now more than ever, our nation's leaders should be focused on delivering real financial relief - not just parroting political talking points - to American households. Rising inflation and reckless spending are jeopardizing our economic prosperity, disproportionally harming blue collar workers and middle-class families. But Georgia cannot wait on D.C. Democrats to do what's right. Despite this political obstructionism by President Eiden and Congressional leaders, Georgia Republicans continue to put our money where our mouth is.
Instead of pursuing failed one-size-fit-none policies, my administration has worked diligently to adopt proactive and Georgia-centric solutions to increasing access and lowering costs in healthcare; including Georgia Pathways and Georgia Access, a far better approach to increasing healthcare coverage than "full" Medicaid expansion. During my first term in office, we have developed innovative solutions to address the healthcare challenges facing our state. By championing legislative proposals and making strategic budget investments, we have expanded access, lowered costs, and provided more healthcare options to Georgians. Through real leadership instead of political rhetoric, I have demonstrated my commitment to achieving healthier communities across the Peach State, and I remain dedicated to improving healthcare in every zip code. You should do the same.