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04/14/2014

Weekly E-Bulletin


Investigative Report Targets Lavish Hospital Spending

Many hospitals may not need the fiscal benefits of providing and reporting charity care, according to an investigative report out last week. U.S. hospitals claim to provide $13 billion in charitable care benefits but provide little tangible or transparent data of what constitutes those benefits, the report says. “Many large not-for-profit hospitals are throwing grand parties, collecting pricey art, paying their executives private-sector wages, making loans to high-ranking employees, sponsoring football teams, extending their global reach and stashing cash overseas,” the article said, suggesting that such practices contributed to higher healthcare costs. Click here for the story.

Key Senator Pushes IRS on Nonprofit Hospital Accountability

The IRS has failed to update lawmakers on the agency’s progress in enacting accountability measure for nonprofit hospitals, according to a letter sent last week by Sen. Chuck Grassley (R-IA). Grassley asked IRS Commissioner John Koskinen for an update on standards for the tax exemption of non profit hospitals and other measures that were enacted as part of the Affordable Care Act. Click here to read Grassley’s letter.

OIG: $2 Billion in Home Health Service Claims Should Not Have Been Paid

A review of Medicare home health services by the HHS Office of Inspector General has found that 32 percent of claims did not document the required face-to-face encounters, resulting in $2 billion in payments that should not have been made. In addition, OIG concludes that oversight of the face-to-face requirement by CMS is minimal. Click here for the OIG report.

Americans Are Ready To Turn Health Care Economy Upside Down

Americans are ready to forgo traditional sources of care for new, at-home, more affordable options, according to a major survey released last week. More than half of respondents said they would likely use a do-it-yourself diagnostic like a strep test rather than visit the doctor, for example. A similar portion would be willing to send a dermatologist a photo of a rash for an opinion rather than go to the office. Such shifts could siphon $64 billion from traditional health care providers. And that number would grow. Click here for the PwC report.

CMS Releases Doc Specific Payment Data: Available Here

Click here to locate your physicians’ Medicare payments data from 2012. Click here for the complete data base from CMS. Click here for the CMS announcement. Click here for a nice, short primer on what this new data means.

NOTE: In six to eight weeks, Medicare will release a database of 2012 payments to hospitals and clinics, the second time this information has been made public for medical institutions, according to CMS. The agency released information about a year ago showing that hospitals often charge prices that can vary by thousands of dollars for the same procedures, even within the same towns. Hospitals questioned the disclosure, saying their prices don’t reflect what they’re paid by Medicare or other insurers.

A Handful of Physicians Skewed the Medicare Payment Numbers

The two highest-paid doctors listed in the Medicare data are already under government review because of suspected improper billing. They include an ophthalmologist in the retiree haven of West Palm Beach, Fla., who topped the list by taking in more than $26 million to treat fewer than 900 patients. That is 61 times the average Medicare payout of $430,000 for an ophthalmologist. A Florida cardiologist received $23 million in Medicare payments in 2012, nearly 80 times the average amount for that specialty. One California doctor was in the top 10 nationwide: a Newport Beach oncologist who was paid $11 million that year. The overwhelming majority of doctors billed the government very modest amounts. Click here for the LA Times report.

Small Percentage of Physicians Received A Quarter of the Payments

About 2 percent of doctors account for about $15 billion in Medicare payments, roughly a quarter of the total, according an analysis of the data. Click here for this NY Times story. Click here to see a breakdown of payments by physician specialty and payments to other providers, such as hospice. Physicians were not happy about the release. Click here. Click here for the AMA’s response.

Consumer, Industry Groups Target Drug Prices Again

US drug prices are coming under the scrutiny of industry and consumer groups, again. The release last week of Medicare data showed some doctors charging millions to the public health-care program. Doctors claimed these charges largely covered the cost of expensive drugs administered to patients — costs Medicare has little control over. In December, Gilead Sciences released Sovaldi, a breakthrough hepatitis C drug that costs $84,000 over 12 weeks (one pill per day, at $1000 each). In response, pharmacy benefit manager Express Scripts threatened to stop buying the drug once equally effective competitors arrive in the market in 2015, and some state Medicaid agencies now refuse to cover the drug. Click here for the report.

RAND Report: Employer-Sponsored Health Care Booming

There’s one Obamacare number that stands out above the rest this past week — 8.2 million. That’s how many people have taken up employer-sponsored insurance since September, and most of them were previously uninsured, according to a Rand Corp. survey issued last week. The Rand survey attributes the drop in the uninsured rate over the past six months mostly to gains in employer coverage. Click here for the summary. Click here for the complete report.

New Study Sheds Light on Early Obamacare Enrollees

A study of the first to sign up for coverage through the new marketplaces suggests that they were more likely to face serious health problems than those who receive coverage through their employers. Click here for the news report. Click here for the actual study.

More Representatives Pushing Repeal of 96-Hour Rule on CAHs

50 House members are now cosponsors on the bill that would stop the 96-hour rule for Critical Access Hospitals, an increase of 15 in the last two weeks. Click here to see which representatives have signed on. Click here to see which senators are on the bill. Outgoing HHS Secretary Sebelius told Sen. Roberts (R-KS) last week that she would have CMS look into the issue more thoroughly. Click here for the 2 min. video of that exchange.

  • Click here to see the updated list of House cosponsors on the 2-midnight repeal bill. Click here for Senators.
  • Click here to see the latest list of House cosponsors on the RAC reform bill – there are now 205. Click here for Senators.

Sebelius Resigns At HHS; OMB’s Burwell Is In

There’s a big change coming to HHS – a new cabinet secretary. Click here for the story. Many Republicans used the opportunity to criticize her and Obamacare; however one interesting perspective comes from journalist Ezra Klein who says she resigned because Obamacare won. Click here.

Poll: Most Still Oppose Obamacare With Republicans Leading that Opinion by Far

Republicans are more likely than Democrats to say that a candidate’s position on the health law is important to their vote this fall, according to a Pew Research Center and USA Today survey last week. There’s also been little change compared to a month before in how they feel about the law, with half saying disapproving and 37 percent approving. Click here for the Pew report.

Think-Tank Report on Medicaid Outlines Budgetary Challenges

The right-leaning American Enterprise Institute was out last week with a new report on Medicaid, which is projected to gain 30 percent more enrollees in the next decade and is the single largest budget item for states. The report analyzes the program’s rising costs and the issues it’s facing under ACA expansion and proposes reforms. Click here.

CMS Reverses Stance, Will Increase MA Payment Rates

HHS officials last week announced that they boosted planned payments to insurers that run private Medicare Advantage plans, issuing final rates that were higher than the cuts regulators proposed in February. CMS said the final rates—for payments to be made in 2015 for the Medicare Advantage plans—represent a 0.4% increase to insurers compared with this year, while they estimated the earlier proposal had implied a 1.9% cut. Click here for a very good CMS fact sheet.

Study: Payment Adjustments to Hospitals and Health Plans Should Be Replaced

The way Medicare adjusts the billions of dollars it pays health plans and hospitals to account for how sick their patients are is flawed and should be replaced, says a study out last week from Dartmouth. They found that using indices pegged to a region’s poverty rate or overall health of its population, do a better job than explaining mortality rates than the current method. Risk adjusting is critical in how Medicare evaluates hospitals’ readmission rates — which affects their payments — and how it pays Medicare Advantage plans. Click here for the study.

Ratings Agency Says ICD-10 Delay Good for Some Hospitals

The ICD-10 delay for another year – passed unexpectedly by Congress two weeks ago – should help not-for-profit hospitals according to a brief from Fitch Ratings. Click here.

OIG: DME Program Working As Designed

A GAO report on Medicare’s competitive bidding program for durable medical equipment (DME) out last week finds that the program has decreased the use of equipment without hurting seniors’ access to it. The GAO compared the number of items supplied to beneficiaries in each of nine competitive bidding areas to the numbers in similar geographic regions outside the program. Click here for the report.

The Middle Is Dead In Congress

Many of you ask me, “why can’t they just get along in Congress and get something done!” Well, there are many reasons, but perhaps the most illustrative came out in an analysis last week that shows how little ideological overlap there is between the left and the right – compared with just 20 years ago. Click here.

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