WEEKLY E-BULLETIN


Mandatory Post Acute Bundling Legislation Proposed

The biggest surprise last week in health policy developments was the Energy & Commerce Committee release of draft legislation that would mandate post-acute bundling of services beginning in 2016. Services impacted are post-hospital extended care, home health, inpatient rehabilitation, long term acute care, durable medical equipment, outpatient prescription drugs and biologicals, and skilled nursing facility. Click here for an excellent two-page summary from our policy team (a link to the bill is included). Although there was no official budget analysis of the bill, independent reports say it could save Medicare $100 billion over 10 years.

MedPAC Pushes Bundling and Site Neutral Payment Changes

In the same Energy & Commerce Committee hearing, compelling testimony was provided by the Executive Director of the Medicare Payment Advisory Commission. MedPAC advises Congress on Medicare payment policy. Mark Miller testified that bundling of services and site neutral payment policies should be pursued by Congress immediately. Site neutral includes significant reductions to Evaluation & Management and APC payments to hospitals. His testimony is a “must read” if you want to know where government policy is headed. Click here.

2-Midnight, RACs Targeted in Congressional Hearing

The 2-Midnight rule and RACs were the focus of a congressional hearing last week that didn’t find any immediate solutions, but certainly underscored the problems. The current 18-month enforcement delay of the 2-midnight rule could cost the government $5 billion, according to Health Data Insights, an independent Medicare auditing company. Click here for their detailed analysis. The organization representing hospitalists blasted the policy that allows CMS to classify as “outpatients” patients who are hospitalized. Click here for that testimony. Click here for Johns Hopkins Health System insights on its problems with 2-midnight and RACs. Click here for another very good summary of the hearing.

Hospitals Sue HHS Over Appeals, Hearings Delay

Three hospitals and the AHA sued HHS last week over the backlog at the third level of the Medicare appeals process. The suit would compel HHS to meet the deadlines for reviewing an appeal, which at the Administrative Law Judge Level is 90 days. When the delay at the ALJ level is combined with delays at other places in the appeals system, AHA estimates in the lawsuit that hospitals will likely have to wait five years, and possibly longer, to have claims proceed through a system that could otherwise be finished in a year or less. Click here for a copy of the lawsuit.

GAO Says Medicare Improperly Pays Billions To Providers

Medicare issued billions of dollars in improper payments to providers, because CMS doesn’t have a system to examine claims to see if they exceed limits that would prompt further investigation, according to the Government Accountability Office’s healthcare director during another congressional hearing last week. Due to its size, complexity, and susceptibility to mismanagement and improper payments, GAO designated Medicare as a high-risk program. Click here to read all the government testimony.

HHS Delays Some Meaningful Use Requirements

HHS last week issued a new proposed rule that would provide eligible professionals, eligible hospitals, and critical access hospitals more flexibility in how they use certified EHR technology (CEHRT) to meet meaningful use. The proposed rule would let providers use the 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT for the EHR reporting period in 2014 for the Medicare and Medicaid EHR Incentive Programs. Click here for details from CMS.

$110 Million In Innovation Awards Made by CMS

CMS last week awarded 12 organizations $110 million in Health Care Innovation Awards to test new payment and service delivery models to improve care outcomes and lower costs. Additional awards will be announced in the coming months for total round-two funding of up to $1 billion. Click here for the list of awardees.

$370 Million More To Be Awarded to States for Innovations

HHS last week announced it is providing up to $730 million as part of the State Innovation Model initiative to help states design and test improvements to their public and private health care payment and delivery systems. States, territories and the District of Columbia can apply for either a Model Test award to assist in implementation or a Model Design award to develop or enhance a comprehensive State Health Care Innovation Plan. Click here for the details.

Number of Hospital Mergers Drop, Value Increases; Consolidations Debated

The number of hospital merger deals consummated during the first quarter of the year was 12, down from 21 during the first quarter of 2013–a drop of more than 40 percent, according to data released last week from the PwC publication Health Data Insights. However, the value of the deals closed so far this year increased more than 20 percent, reaching $388 million, compared to $320 million a year ago. Click here for the report. The topic of hospital consolidation was the focus of the new Health Affairs issue this month. Click here.

CMS Rules Expand Prior Auth for Some DME

CMS plans to expand the prior authorization for power mobility devices demonstration to build off the success of that program, and also will institute prior authorization demonstrations for hyperbaric oxygen therapy and scheduled non-emergency ambulance trips. The agency also released a proposed rule last week that would establish a prior authorization process for certain durable medical equipment that meet criteria for frequent unnecessary utilization. CMS says the proposed rule is estimated to reduce Medicare spending by $100 million to $740 million over the next 10 years. Click here for the CMS summary. Click here for the new regs.

Why Medical Debt May Be Killing Your Credit Score

Consumers paying off medical debt could be better off if credit bureaus treated it differently than the other bills they service, according to reports last week. Those with medical debt who had lower credit scores paid it off at generally the same rate as those with higher scores, according to a survey of credit histories and scores of 5 million anonymous Americans by the Consumer Financial Protection Bureau. And even if that debt was placed in collections–which damages credit scores– the consumers were likely to pay off all debt anyway. Click here for the Bureau’s report. Click here for the news summary.

Study: Hospital Capacity Decreases as Payments Tighten

When Medicare keeps a tight rein on inpatient hospital payments, hospitals scale back overall capacity, resulting in less hospital use by nonelderly patients—not just elderly patients, according to a study out last week from the nonpartisan, nonprofit National Institute for Health Care Reform. Click here for the study.

ED Visits Up: Emergency Doc Poll

Now that more people are insured under the Affordable Care Act, they’re visiting emergency departments more frequently, according to an online poll of emergency doctors conducted by the American College of Emergency Physicians. Click here for ACEP’s report.

HHS: Foundation Payments to Support Premiums OK for Some Patients

Third-party payments of premiums and cost-sharing made on behalf of exchange-qualified health plan enrollees by private, not-for-profit foundations are permitted—with some safeguards, according to a letter from HHS sent to the American Hospital Association last week. But the funds must only be for patients selected for their “financial status,” not for their health status. Click here for Secretary Sebelius’ letter.

VA Health Care Investigations Widen

As Congress stepped up efforts last week to get to the bottom of the allegations of substandard healthcare services at Veterans Affairs facilities, a Senate committee provided funds for a nationwide investigation and a House panel authorized a subpoena to compel VA officials to appear at a hearing next week. Click here for a good LA Times summary of the growing VA health care scandal. The investigation now involves 26 facilities nationwide, according to officials at the Office of Inspector General at the VA Department. Click here for that report.

Wait Times for Private Docs Increase

While much of the focus on Veterans’ health care has been on wait lists and wait times, it’s important to note that the private sector has its own issues with waiting. According to a survey from Merrit Hawkins, Boston averages the longest time for a first appointment among the 15 cities surveyed: 45 days. That includes 72 days to see a dermatologist for the first time and 66 days to see a family physician. Dallas had the shortest wait times, none of them more than 45 days. Click here for the report.

Some Say 2015 Exchange Premiums Will Increase, Some Say No

States are finalizing dates to release 2015 premium costs under the Affordable Care Act, and their decisions will guarantee a steady flow of news about rate hikes all the way to the November midterm elections. Democrats are bracing for grim headlines that could put the unpopular law back at the forefront of voters’ minds. Premiums are expected to go up in a majority of states. Click here for the story. Not so fast, says a study from the Robert Woods Johnson Foundation. Click here.

More Analysis on 2015 Insurance Rates

Democrats on the House Energy and Commerce Committee have released an analysis of health insurance premiums proposed in the Washington and Virginia exchanges — the first two states to release 2015 rates. Click here for that report. Here’s another perspective on premium increases from the Center for American Progress. Click here.

Study Identifies Plans with Best Competitive Position in Exchanges

According to a new analysis from Avalere Health, Coventry, Humana and WellPoint have the greatest percentage of their plans positioned competitively in the marketplaces. More than half of Coventry’s plans were priced at or below the second-lowest cost silver plan. Click here for the report.

Employer Sponsored Health Care Costs Moderate

Employer-sponsored health care costs for a typical family of four will go up by 5.4 percent this year, according to the 2014 Milliman Medical Index, released last week. That’s the smallest increase in the 14-year history of the index, but’s still the ninth consecutive annual increase of more than $1,100. Click here for the report.

GOP Challenges Treasury on Insurance Subsidies

Following a story last week in the Washington Post, House Ways and Means Republicans want the Treasury Department to stop making unverified payments of ACA subsidies to insurance companies until the federal government can confirm that individuals’ incomes are accurate and make sure the subsidy payments are not erroneous. Click here for the Post story. Click here for the letter from House member to Secretary Lew.

Study Identifies the Newly Insured Under ACA

Who are the newly insured under the Affordable Care Act? Most adults are in the income groups targeted by the ACA’s Medicaid expansion and the exchange subsidies, according to a new analysis from the Urban Institute. Newly insured adults tend to be younger than adults who had coverage for the full year; however, they are more likely to report fair or poor health than full-year insured adults. Newly insured adults often lack a strong connection to the health care system; many do not have a usual source of care and have not had a routine checkup in the past year. Click here for their report.

Largest Insurers See Membership Gains

Five of the seven leading health insurers in the nation realized net membership gains from year-end 2012 to year-end 2013, according to an analysis released last week. As of December 2013, these companies collectively covered 143.6 million members in Commercial, Medicare and Medicaid plans, up from an aggregate of 135.6 million in December 2012. These industry leaders collectively enroll about 55% of all total covered lives in the U.S. health insurance market. Click here.

Xanax Sending More to EDs

From 2005 to 2010, U.S. hospital emergency room treatment for non-medical use of the sedative alprazolam, or Xanax, doubled from 57,419 to 124,902, but leveled at 123,744 in 2011. This is according to a new report from the Substance Abuse and Mental Health Services Administration. Click here for their report.

AHRQ: CHF, Septicemia, Pneumonia Cause Most Readmits

Medicare patients with three conditions had the largest number of all-cause 30-day readmissions in 2011: congestive heart failure (134,500 readmissions), septicemia (92,900 readmissions) and pneumonia (88,800 readmissions). These readmissions resulted in $4.3 billion in hospital costs. Click here for the report from Agency for Healthcare Research and Quality.

FDA Cracks Down on Website Pharmaceuticals

The FDA and other federal agencies took action last week against websites that sell potentially dangerous, unapproved prescription drugs to U.S. consumers. The FDA and the U.S. Customs and Border Protection (CBP) also conducted extensive examinations at U.S.-based international mail facilities, where many packages containing prescription drugs enter the U.S., and found that most of the examined packages contained illegal prescription drugs that had been ordered from online sources. Click here for the FDA report.

Analysis Says Medicare Wasting $1 Billion on Unnecessary Use of Lucentis

CMS’ recently released Medicare physician payment data is providing enough detail for researchers to identify spending patterns that will likely become the focus of federal policy makers. For example, according to one Washington think-tank, one of the highest-volume costs in the database is for Lucentis (at about $2,000 per injection), a drug used to treat agerelated macular degeneration. An alternative drug, Avastin, costs about $50 per injection. Multiple studies have proven that Avastin and Lucentis are equally effective at treating AMD, with no difference in clinical outcomes. If ophthalmologists had treated all of their 2012 cases with Avastin, Medicare would have spent only $32.3 million—saving $926.5 million. Click here for the report.

Drug Plan Costs Vary Widely

There’s wide variation in how much Medicare drug plans cost, according to an analysis out last week from HealthPocket. On average, the highest cost Part D plan in each of the 50 states and D.C. was 109 percent more expensive in combined costs than the lowest-cost plan in the same state. The group looked at the top 50 drugs sold in the U.S. and estimated the amount a senior would pay for premiums and prescriptions. The lowest-cost plan? The AARP MedicareRx Preferred in Arizona. The most expensive was the Health Alliance Medicare Prescription Plan — Basic in Illinois. Click here for their report.

Health Care Execs Pay Examined

Healthcare and insurance executives’ base pay outstrips physician salaries, according to an analysis for The New York Times. Hospital CEOs on average earn a base pay of $386,000 and hospital administrators make an average of $237,000, the analysis found. Surgeons earn an average of $306,000 and general doctors make $185,000, according to the Times.  But the highest earners are top health insurance execs. Aetna CEO Mark T. Bertolini, for instance, earned a salary of $977,000 in 2012 but his total compensation package was more than $36 million. Click here for the report.

Health Care Industry Not Viewed Well by Public

Words like “greedy” and “expensive” appear frequently when voters are asked to describe what comes to mind when they think of hospitals, health insurance companies, prescription drug companies and medical device companies, according to an analysis released last week by Morning Consult. In contrast, those surveyed gave largely positive attributes to care providers and government healthcare programs. Words likes “good” and “needed” are used throughout voter descriptions of what comes to mind when they think of physicians, nurses, Medicare, and Medicaid. Click here for details.