A big threat gone, but bigger threat looms

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James M. Berklan
James M. Berklan

One must always remember when speaking with Mark Parkinson that he is a lawyer. And a former state governor, and a master debater before that.

That means you get a measure of reserve even with the best of news. It explains Parkinson's controlled manner Monday afternoon when he told many of the American Health Care Association's most influential members that the Trump administration had decided to rescind federal efforts to ban pre-dispute arbitration agreements.

“It appears to be not terribly burdensome,” the AHCA president and CEO told a record crowd at the group's annual Congressional briefing in Washington. “But we're not going to conclude anything until we read it more carefully and talk to some members who use arbitration agreements.”

The next morning, Parkinson admitted his whirlwind schedule still hadn't allowed him to delve much further into the new proposal. But the association's attorneys had and things were looking good, he told me.

“We're obviously and absolutely glad they've repealed the ban,” he said. “I believe 99% of members using arbitration clauses arbitration clauses are probably meeting all the requirements OK.”

The only hesitation, he added, was that the association wants to make sure no precedent is set so that the Centers for Medicare & Medicaid Services later can say that it can, in fact, create policy. That's why the AHCA is likely to go to District Court and ask for a stay in its lawsuit against the federal government. Once a new rule is in place and everything comes out to its liking, then AHCA would drop the suit altogether, Parkinson said. Currently, there's a 60-day comment period underway, which is typically followed by a roughly 60- to 90-day internal rewriting period.

Parkinson says there's an “almost 100% chance” that arbitration agreements will be OK.

“What it does for the everyday operator is it eliminates what I would call an existential threat of extinction,” he explained. Arbitration won't cut the number of lawsuits brought, he added, but it should curb the “risk of a runaway jury verdict” that could draw a $5 million judgment for “fairly minor claims.”

It's one less thing that operators have to stay awake late at night thinking about, Parkinson said, quickly adding, “There's still plenty to worry about.” 

Which brings us to the other, more substantial threat — potential Medicaid reductions. [Unnamed AHCA reps and McKnight's both would like to remind some of the more, shall we say, ideologically driven individuals out there that huge cuts are precisely what was passed by the House: a healthcare bill that would cut planned Medicaid increases. Crying “fake” when it's news you don't want to hear is simply a red herring.]

Democrats, and many Republicans, in the Senate have openly criticized the House bill as being too harsh on Medicaid funding. AHCA lobbying efforts this week focused on telling GOP Senators in particular to craft something kinder to Medicaid, and the sector.

Parkinson said his “best guess” was that the Senate wouldn't be able to pass a bill of its own, partly because so many lawmakers have openly said they disagree with what's been proposed so far. His top lieutenant, AHCA Vice President for Governmental Affairs Clifton Porter II, said he expected the Senate would deliver something more palatable.

“I feel confident we'll have a decent outcome, but if we have to rumble, we'll rumble,” he said.

The stakes couldn't be higher, both leaders emphasized. The House bill calls for more than $800 billion reduced over a 10-year period. If anything near that is signed into law, it could be devastating for providers.

“If Medicaid is cut in a material way, it overwhelms any other positive thing that we can achieve for members,” Parkinson told us.

Medicaid is far and away the top payer of nursing home services in the country, even though it reimburses providers below the actual cost of care.

“It's quite interesting that we're fighting to preserve the status quo when we're [already] losing $25 per patient day,” Porter mused in a general session on Monday.

“As we get closer to [Congress'] August recess, it's going to get ugly,” he predicted. “It's going to get messy.”

Parkinson and Porter agreed that no matter what happens before or after the break, efforts to substantially reform Medicaid will not go away.

“I think we're at a high degree of risk for at least the next two years for fundamental Medicaid reform,” Parkinson confided.

By 2020, he says, new pay models for both Medicare and Medicaid should be in place and the aging demographic “will help us.”

“These are tough and challenging times,” he admits — again, in reserved fashion, “but for folks who want to throw in the towel, I think it's a little too soon for that.”

Follow James M. Berklan @JimBerklan. Email him at jim.berklan@mcknights.com.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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