WEEKLY E-BULLETIN


Medicare Rights Groups Attack Hospital Observation Status; NBC News Covers Story

Medicare patients rights groups are stepping up efforts to end hospital observation status. Their primary focus is on patients’ ability to get into a nursing facility after a 3-day hospital stay and have Medicare pay for it. Hospitals may be hearing more from their Medicare patients and families as advocacy groups urge them to challenge observation status. Last week, NBC news covered the story. Click here for that report.

NY Times Also Covers the Observation Story

One of the more confusing aspects of the 2-midnight rule is its possible impact on the the 3-midnight requirement that qualifies a senior for Medicare-covered nursing home stay. The New York Times last week covered the issue from the patient perspective. Click here.

CMS Hosts 2-Midnight Call Tomorrow

CMS is hosting another telephone training session on the medical review criteria for the new 2-midnight rule for inpatient hospital admission and medical review tomorrow, January 14 at 1:30 p.m. EST. CMS will also answer questions on the 2-midnight policy. Participants may register for the call here. CMS held a 2-midnight rule conference call on December 19, click here for a one-page summary of that call.

Maryland Deal Caps Hospital Spending Growth Across the Board

The Obama Administration and Maryland state officials announced a plan Friday that would limit per capita hospital spending growth in Maryland across the board, not just for Medicare. But it requires savings of at least $330 million over that period for Medicare, with various “guardrails” coming into play as the mechanism to enforce that level of savings. A CMS news release said Maryland “will limit all-payer annual per capita hospital [spending] growth, including inpatient and outpatient care, to 3.58 percent, below historical trends.” Click here for the news story. Click here for the more-detailed CMS summary.

State Medicaid Expansion Still Focus Across the Country

State Medicaid expansions continue be the focus of more than half state governments and some states that were reluctant to sign on are reconsidering or negotiating a deal with the federal government. The federal government is offering billions of dollars in grants and incentive payments to states that improve the efficiency of Medicaid. Out of the $1.8 trillion the ACA is projected to cost over the next decade, $10 billion is dedicated to innovation programs. With the majority of the money already disbursed, states will be racing to meet statutory deadlines for completing their reform projects, some as early as 2015. Click here for the report. Click here for an excellent summary infographic. Click here for another very good story on the “two Americas” as states divide on the Medicaid expansion decision.

Senate Bill Would Use Medicare Cuts to Pay for Unemployment Benefits

In what may be an unprecedented move, the Senate will likely vote on a bill today to extend unemployment benefits for the long-term unemployed and pay for it by cutting Medicare payments to providers. To be fair, the cuts would not take effect until 2024, but the proposal could prompt more efforts to use Medicare as the source of funds to support other federal programs. Here’s the Washington Post story, which discusses the Medicare cuts towards the end of the piece.

Docs Says Food Stamp Cuts Will Increase Health Costs

Congress is also on the verge of cutting billions of dollars from the food stamp program and physicians last week opposed the move saying it will increase health care costs. Click here for the story.

Nursing Group Says Hospital Charges Continuing to Rise

Hospital charges continue to rise, with some procedures billed at more than 10 times their cost, according to a statement last week from National Nurses United (NNU). The Institute for Health and Socio-Economic Policy, NNU’s research arm, conducted the research and found:

  • Fourteen hospitals nationwide charge more than $1,000 for every $100 in expenditures, with the widest charge-to-cost ratio (1,192 percent) found at Secaucus, N.J.’s Meadowlands Hospital Medical Center;
  • Hospital charges saw their largest single jump (22 percent) in 16 years between fiscal years 2010-2011 and FY 2012, despite the passage of the Affordable Care Act; and
  • Of the nine most expensive hospitals, six are members of Health Management Associates (HMA) or Community Health Systems.

The data are based on Medicare Cost Reports covering the fiscal year ending in September of 2012. Click here for their report.

Re-Admit Rates:  the High and Low States and Hospitals Identified

At least 20 percent of hospitals in Maryland, New York, Illinois, Massachusetts, New Jersey and Rhode Island have higher readmission rates than the national average, according to new data from CMS. The states with the highest proportion of hospitals with lower readmission rates than average include Hawaii, Idaho, Colorado, Oregon, South Carolina, Utah and Washington, according to Kaiser Health News. Thirteen to 16 percent of hospitals in those states have readmission rates lower than the national average. Click here to see the CMS data. Click here to read the Kaiser report that names specific hospitals.

Medicare Add-On Payment Programs Get New Scrutiny

A number of Medicare’s add-on payment programs are getting renewed congressional attention because they are expiring at the end of March. A House subcommittee held a hearing last week on rural hospital add-on payments, Medicare floor for physician work (GPCI), Medicare therapy caps exceptions process, Medicare ambulance add-ons and Medicare Advantage special needs plans. MedPAC Chairman Glenn Hackbarth, M.D., made numerous recommendations regarding the future of each program. Click here for his testimony and detailed recommendations. Congress usually follows MedPAC’s recommendations on these matters.

HealthCare.gov Contractor Replaced

The Obama Administration has removed CGI Federal as the main IT contractor on HealthCare.gov and replaced it with Accenture, according to press reports over the weekend. The Washington Post said federal officials are unhappy with CGI’s repair efforts on the enrollment website and won’t extend the firm’s contract when it runs out in February. Instead, the administration will sign a one-year, $90 million contract with Accenture that was awarded on a sole-source basis, according to the Post. Click here for the story.

House Passes Changes to HealthCare.gov Program

The House passed legislation last week that would require victims of security breaches through the HealthCare.gov insurance exchanges to be notified within two days. It passed 291-122. Sixty-seven Democrats joined Republicans to vote for the bill. Click here for details.

Generic Drug Costs Rising, Community Pharmacists Want Action

The skyrocketing cost of scores of generic drugs is harming patients and community pharmacies and raises significant questions that deserve to be examined in a congressional committee hearing, according to the National Community Pharmacists Association last week. The association sent a letter to leaders of the Senate Health Education Labor & Pensions Committee and the House Energy and Commerce Committee. Pharmacy acquisition prices for many essential generic drugs have risen by as much as 1,000% or more, according to a survey of more than 1,000 community pharmacists. Click here for details.

Report: States Best Positioned to Transform Health Care

States are the level of government best positioned to transform the United States health care system according to a national report released last week. States administer Medicaid with 70 million enrollees, state employee health care with 3.4 million enrollees, and then the health insurance market places with 10 million enrollees. States also oversee all malpractice and scope of practice laws and insurance regulations. They have a major role in requiring price and quality transparency in the system and thus can influence the level of competition in the health care marketplace. Click here for the report entitled “Cracking the Code on Health Care Costs.”

New CMS Regs Help Medicaid Patients Stay Home

CMS released a final rule Friday that gives states more flexibility to offer care to Medicaid patients in their homes rather than in nursing homes or mental health facilities. The 371-page final rule implements part of the health care law that was developed in a proposed rule in May 2012. Click here for a CMS summary and the rule.

Mental Health Insurance Coverage Expanding

Improvements in insurance coverage for mental conditions and addictions are expected to become more widely available this year as a result of two major steps that the Obama Administration has taken. The Affordable Care Act includes mental health care and substance abuse treatment among its ten “essential” benefits, which means plans sold on the public health care exchanges must include coverage. And rules to fully carry out an older law — the Mental Health Parity and Addiction Equity Act of 2008 — were issued in November, after a long delay. Click here for the summary.

Illinois Significantly Expands Mental Health Coverage Under Medicaid

As Illinois undertakes a major expansion of Medicaid under the national health care overhaul, as many as 120,000 uninsured low-income residents with depression, anxiety, bipolar disorder, schizophrenia, post-traumatic stress and other psychiatric illnesses will qualify for publicly funded health insurance for the first time, according to the National Association of State Mental Health Program Directors. Click here for details.

Poison Control Network Bill Passed by House

The House of Representatives last week passed H.R. 3527, the Poison Center Network Act, by a vote of 388-18. This legislation reauthorizes funding for the operation of the nation’s 57 poison control centers for fiscal years 2015 – 2019. Click here for more.

Health Insurers Start Paying Many New Taxes

A number of new taxes on health insurers started January 1 and insurers are sounding the alarm bells. Insurers will pay $8 billion in a health insurance tax (HIT) this year that will increase to $14.3 billion in 2018. Insurers will also pay $12 billion in a new reinsurance tax that will be redistributed to insures that cover a greater percentage of sicker, costlier patients.  Several other new insurer taxes are also being imposed. The taxes are designed to pay for implementation of the Affordable Care Act. Click here for the details.

Insurers Ask for More Money to Pay for Sicker Exchange Patients

Extra money that the Obama Administration proposed in November to compensate health plans for losses in the new health exchanges needs to be increased, according to the national trade association representing most health insurers. AHIP submitted comments recently on a proposed federal rule designed to take care of concerns by insurers that the people who will sign up for coverage will be sicker and more costly to cover than anyone anticipated. The insurers also said that a broader group of companies should qualify for the additional funds. Click here for the detailed AHIP comments. Click here for the 255-page proposed rule on benefit and payment parameters.

Report: Medicare Beneficiaries Relatively Poor

Half of all Medicare beneficiaries had incomes below $23,500 in 2013, but incomes varied substantially among beneficiaries, according to a new analysis. One-quarter of beneficiaries had incomes below $14,400, while at the other end of the distribution, five percent had incomes exceeding $93,900, including one percent who had incomes exceeding $171,650 in 2013. Click here for the details.

Study: Medigap Plans Increasing Medicare Costs by 22%

A new study out last week says that supplemental Medigap plans substantially increase (by as much as 22%) what Medicare spends on treatment and tests, and gives new ammunition to those who want to restrict these plans. But not all health policy analysts agree. Medigap plans shield millions from Medicare’s deductibles and other out-of-pocket costs. Pay a flat Medigap premium to a private insurer and you might have little or no out-of-pocket expense for doctor visits, hospitalization or other Medicare services. Click here for the 59-page study. Click here for a Kaiser Health News summary.

DOJ Investigates HMA

The U.S. Justice Department is investigating hospital-operator Health Management Associates Inc. for allegedly paying kickbacks to physicians in exchange for referrals to its hospitals, according to a whistleblower case unsealed last week in federal court in Philadelphia. Click here for the Wall Street Journal report.

Confusion Continues for How and When to Rebill Under Part B

Still confused about how and when a provider may rebill a claim under Part B when a Part A hospital inpatient claim is denied for medical necessity? Apparently the confusion is widespread. After months of ongoing comments from hospitals and further analysis from CMS, the waters are still murky in determining the when and what of rebilling. Click here for a very good analysis from the Chief Medical Officer of Executive Health Resources.

Compounding Pharmacies Signing Up Under New Law

A number of U.S. compounding pharmacies have started registering with the FDA under a new law designed to tighten control of the compounders following a deadly outbreak of fungal meningitis linked to a pharmacy in Massachusetts. So far, 11 compounding pharmacies have taken up the option under the Drug Quality and Security Act, a move they hope will give them a marketing edge. Click here for details.

Breast Cancer Meds To Be Covered Later this Year

Starting on September 24, 2014, most health insurance plans must cover medications that reduce the potential of breast cancer for women at high risk for the disease, the Obama administration clarified last week. The medications, such as tamoxifen or raloxifene, must be provided without cost sharing, as recommended by the U.S. Preventive Services Task Force. Click here for the details from CMS.

List of Unnecessary Tests and Procedures Grows

The long list of  tests and procedures that more than a dozen medical specialty societies now say can be unnecessary and cause harm to patients – is continuing to grow. The lists already total 220 items; they address everything from antibiotic prescription for children’s ear infections to ovarian cancer screening in asymptomatic women. Starting last week and continuing well into 2014, each society will release its new list of stuff patients should perhaps avoid — after consultation with their physicians. Click here for the latest from the ABIM Foundation’s Choosing Wisely campaign.

Lung Cancer Incidence Decreasing

Tobacco control efforts are having a major impact on Americans’ health, a new analysis of lung-cancer data suggests. The rate of new lung cancer cases decreased among men and women in the United States from 2005 to 2009, according to a report last week from the CDC. The fastest drop was among adults aged 35-44 years, decreasing 6.5 percent per year among men and 5.8 percent per year among women. Click here for the CDC report.

DOJ and Tobacco Industry Reach Info Dissemination Agreement

The Department of Justice and the tobacco industry have reached an agreement on how tobacco companies will publicize statements correcting decades of disinformation from the industry. The “corrective statements” would have to appear on cigarette packaging and in prime-time television and major newspaper ads as well as on the companies’ websites. A hearing in the case is scheduled for Wednesday, when a federal judge will decide whether to sign off on the agreement or take more time to review it. Click here for a copy of the agreement.

Government Launches Palliative Care for Kids Campaign

A campaign launched last week by the National Institute of Nursing Research aims to increase the use of palliative care — comprehensive treatment of the discomfort, symptoms, and stress of serious illness — for children with serious illness. Click here for details.