New Medicaid contract provision could help health care unions, but be bitter pill for employers
Efforts to unionize health care workers in Pittsburgh and across the state may be getting a shot in the arm, thanks to a little-noted change the state wants to make in its handling of Medicaid funds. But Republicans and hospitals argue the alteration benefits a well connected union fighting Pittsburgh's largest health care network — and makes pawns of the low-income patients who rely on the Medicaid program.
The provision is included in drafts of contracts that would take effect this July. The state Department of Human Services is negotiating those agreements with managed care organizations, who disburse Medicaid funds to healthcare providers. Under the draft language, the MCO “may not include in its network any Provider with a history of one or more work stoppages during the [previous] five years … unless the Provider is or becomes a signatory to a valid collective bargaining agreement or is or becomes a signatory to a labor peace agreement” with a union seeking to organize its workers.
Supporters say that the provision will ensure that patients don’t have to worry about their continuity of care in the event of a strike, lockout, or other workplace disruption. The goal is “to ensure continuous access to care,” said the DHS in a statement. “This is critical for our most vulnerable patients.”
“This is about making sure that we have stability in our workforce and we don’t allow conflict between employers and workers to cause disruptions in care,” agreed Silas Russell, vice president for politics at SEIU Healthcare PA, the state's largest union for health care workers.
Defenders of the provision say it’s not all that different from other ways in which government uses its purchasing power, like a “prevailing wage” requirement that sets union-scale wages for work on government-funded construction projects.
But critics contend that the language could force a hospital to either come to terms with a labor union or face the loss of Medicaid funds. The Hospital and Healthsystem Association of Pennsylvania says the program accounts for about 15 cents of every dollar the average hospital earns.
“It wouldn’t just be a thumb on the scale of negotiations, but an anvil,” said Jeffrey Bechtel, the association’s senior vice president for health economics and policy at the Hospital Association of Pennsylvania.
Some 3.4 million Pennsylvanians are enrolled in Medicaid, which is jointly funded by the state and federal government. Generally, it covers people with disabilities and low-income households.
“Medicaid consumers face some of the largest challenges in health care in this country,” said Bechtel, who said he didn’t know of any other state that included such a provision in its contracts. Medicaid recipients, he said, should receive care “without entangling them in dispute between unions and providers.”
The state first signaled its intent to include the provision in 2019, when it issued a “request for applications” that featured the language. But controversy around the provision flared up in legislative budget hearings last week, in part because acting Secretary Meg Snead said during a March 9 House Appropriations committee hearing that the provision “was a collaboration between the administration and SEIU.”
That prompted outrage from Republicans, who noted that SEIU (whose membership also includes non-health care workers) has contributed more than $2.3 million to Gov. Tom Wolf’s campaign since 2014.
“You just endangered the lives, for political purposes, of people in Pennsylvania by that agreement with one organization,” fumed House appropriations committee chair Stan Saylor. “That’s just wrong.”
Democrats scoffed at what Emily Kinkead, a Pittsburgh representative who sits on the House appropriations committee, called “political theater” and “pretending like this isn't how we make policy.
“Not that we let stakeholders dictate policy, but we talk to stakeholders. Everybody does," she said. "Having people at the table who can talk about how policy is going to impact things is critical.”
“If we start going down the road of talking about campaign contributions, it's going to be a very dark and long road,” warned Matt Bradford, the Democrats’ leader on the committee, during the March 9 hearing.
The Department of Human Services did not directly respond to a query about SEIU’s role in crafting the provision, but its statement said that “stakeholders engage with the administration (and with the legislature) all the time” and that “Republican grandstanding has become a hallmark of budget hearings. The draft provision was included with the patient in mind.”
Russell notes that the provision doesn’t require outright unionization: Providers could also qualify for the program if they had in place a “labor peace agreement.” Such deals typically involve a commitment by a union not to strike, while the employer agrees not to take steps that make organizing more difficult.
“This is about making sure that we have stability in our workforce and we don't allow conflict between employers and workers to cause disruptions in care,” he said.
GOP legislators said that among their most immediate concerns was the fear that a hospital in a rural area could face a labor stoppage and lose the ability to serve Medicaid recipients.
State Rep. Jesse Topper said that in areas like his own Bedford County-centered district, “there are not that many choices in terms of medical care anyway. And … one fourth I think of what we see are from Medicaid recipients. This seems to me like this could be a problem in terms of access of care.”
Snead assured legislators that if the work-stoppage provision would mean Medicaid patients were left with no options, “we are able to work with them … to ensure access to care is not impeded.”
Indeed, the provision may well be pointed most directly at a provider that does have competition: Pittsburgh-based UPMC, with whom Russell’s union has been locked in a years-long fight.
Asked whether the health care giant was the real target of the provision, Russell said, “Our hospital systems in Pennsylvania are immensely powerful and some of them have a history of utilizing that power that they have in the marketplace to really dictate how people work and have access to care. I think that this provision is a very small step in a direction that rebalances that power.”
UPMC offered a guarded response: “Any provision that restricts access to care for our most vulnerable patients … only serves to exacerbate health inequities across Pennsylvania,” it said in a statement.
Bechtel, of the Hospital Association, said he was "not in a position to comment on the origins of the provision or the politics." But he said the group estimates the provision could affect roughly a dozen hospitals in the state.
Bechtel says that hospitals have contingency plans that allow them to operate safely in the event of work stoppages. Losing Medicaid funding, though, “could be very damaging to the financial standing of individual hospitals and could impact patients and their communities and the employees themselves.”
Bechtel says the association hopes to remove the provision by the time the contracts are finalized by the beginning of April. Otherwise, he said, “We are evaluating our legal options and legal action is certainly a possibility.” The association is also talking to the federal Centers for Medicare and Medicaid Services, which oversees the program, in hopes that it will deem the provision invalid.
That would be too bad, said Antoinette Kraus, who directs the health care consumer-advocacy group Pennsylvania Health Access Network.
“First and foremost, we care about whether people have adequate access to care, and this provision makes sure they do,” said Kraus , whose board includes a former SEIU Healthcare staffer. Workplace unrest “is not the number-one barrier to access. But it does interrupt care.”
And she said she was confident that DHS would apply the rules in a way to guarantee reliable health care. “Work stoppages harm that mission, but we have to make sure there is an adequate network of providers.”