Hackensack Meridian Health Meeting with OMB Request for

Hackensack Meridian Health Meeting with OMB Request for Reconsideration of Impact of 2021 CBSA Delineations on NJ Hospitals and Other NJ Health Care Providers March 16, 2021

AGENDA § Introductions § Background and Overview § Financial and Practical Impact § Requested Solution

Introductions On Behalf of Hackensack Meridian Health: § Sarah Lechner, SVP, Chief of Government Affairs & Advocacy § Kathryn Gibbons, VP, Reimbursement, Budgeting & Revenue Analytics § Billy Wynne, Founder, Wynne Health Group On Behalf of New Jersey Hospital Association: § Sean Hopkins, SVP, Center for Health Analytics, Research & Transformation § Ross Airington, Director of Health Policy, Washington Strategic Consulting

Background and Overview - CMS adopts new CBSA delineations for NJ, provides only a 1 -year transition (5% cap) 2022 - CMS increases payments to low-wage hospitals by reducing payments to all other hospitals 2021 2020 Recent CMS payment policies have resulted in significant, disproportionate payment inequities for New Jersey hospitals and other providers. - Full impact of new CBSAs take effect, resulting in annual payment reductions of more than $220 million; disproportionate impact to providers

Background and Overview New CBSA Delineations: § FY 2021 IPPS Final Rule: four NJ counties – Middlesex, Monmouth, Ocean & Somerset – moved from their previous CBSAs to a newly-created CBSA (New Brunswick-Lakewood NJ). § Middlesex, Monmouth, & Ocean had previously been part of the New York-Jersey City-White Plains, NY-NJ CBA – a higher Wage Index CBSA. § These three counties will experience a nearly 17% decrease in their wage index. § Includes only a 1 -year transition policy; AWI decreases are capped at 5% for FY 2021.

Financial and Practical Implications The new CBSA delineation will result in: § At least $220 million in annual payment reductions to hospitals statewide § At least $120 million in annual payment reductions throughout the HMH network § Reductions much greater when § non acute providers are included in the analysis § adjusted for Medicare Advantage (managed care) The new CBSA is unconventional, in both its proposal and implementation: § Never before has a change of this magnitude occurred in between census data § New Jersey health care providers will fall off a cliff on October 1, 2021 and January 1, 2022

Requested Solution New CBSA: Implementation “Glidepath” § Delays cuts to affected hospitals § Expands and extends the cap on payment reduction for each facility § Caps reductions at 2. 5% in FY 2022; 5% in FY 2023; and 10% in FY 2024 § Budget neutral proposal Fiscal Year Cap on AWI Reductions Current Proposed 2022 No cap 2. 5% 2023 No cap 5% 2024 No cap 10%

Hackensack Meridian Health meeting with OMB QUESTIONS?