CMS Updates Offer to Hospitals on RAC Appeals

Last week, CMS updated its offer of an administrative agreement to hospitals willing to withdraw their pending appeals in exchange for a partial payment of 68 percent of the net allowable amount. Acute care hospitals and critical access hospitals are eligible to submit a settlement request. Those hospitals may not choose to settle some claims and continue to appeal others. Hospitals must file a settlement agreement request by Oct. 31 by printing, signing and scanning the administrative agreement, completing the eligible claim spreadsheet and emailing those documents to CMS. Click here for the written update from CMS. Click here for the settlement instructions.

Illinois’ Biggest System to Grow Larger; Analysts Say Current Merger Mania Is Different from ’90s

Illinois’ largest health system is about to get even bigger. Downers Grove-based Advocate Health Care, one of the largest systems in the country, last week announced plans to merge with NorthShore University HealthSystem to create a health system with 16 hospitals, 4,438 beds and 45,000 employees. Advocate had $4.9 billion in revenue in 2013, compared with $1.8 billion for NorthShore. Click here for the story. Some analysts say current merger mania is different than it was in the ’90s. Click here.

$295 Million Awarded to Health Centers to Expand Primary Care

HHS last week announced $295 million in grants to almost 1,200 community health centers to expand primary care services. The grants will fund an estimated 4,750 new staff positions, longer hours at the clinics, which may also offer a broader range of services including oral health, behavioral health, pharmacy and vision care. The agency estimates the funds will help health centers reach 1.5 million new patients, including 137,000 for oral health services and 38,000 for mental health and substance abuse care. Click here for a state-by-state breakdown of funding, including lists of all recipients.

$60 Million in Navigator Grants Awarded

HHS last week announced $60 million in Navigator grant awards to 90 organizations in states with federally-facilitated and state partnership Marketplaces. These awards support preparation and outreach activities in year two of Marketplace enrollment and build on lessons learned from last year. Click here for a state-by-state list of where the funds are going.

Auto-Enrollment May Not Go So Smoothly

Auto enrollment for those who signed up on Healthcare.gov could prove more difficult than advertised, according to reports over the weekend. Millions of consumers will soon receive notices from health insurance companies stating that their coverage is being automatically renewed for 2015, along with the financial assistance they received this year from the federal government. But consumer advocates and insurers say they see a significant potential for confusion because some of the information will be out of date and misleading on costs and other aspects of coverage. Some people who have been receiving monthly subsidy payments this year could get much less if they stay in their current health plans. Click here for details.

Hospitals Get OK to Collect Unused Rx

The Obama administration announced last week that hospitals, pharmacies and other medical facilities will be authorized to collect unused prescription drugs, a change that authorities hope will keep the pharmaceuticals out of the hands of people who may attempt to abuse or sell them. The new regulations come as the nation is facing an epidemic of opiate abuse: the number of fatal overdoses increased by 118 percent nationwide from 1999 to 2011, mostly driven by powerful prescription drugs. Click here for the story.

Bill Would Create Value Based Insurance

A bipartisan pair of senators last week introduced a bill to establish a demonstration program to study whether “value-based insurance design” reduce cost-sharing and improve health outcomes for seniors with specific chronic conditions in private Medicare Advantage plans. The bill from Sens. John Thune (R-SD) and Debbie Stabenow (D-MI) would test a concept that — that spending can be reduced if health plans encourage people to use effective but less costly treatments, typically by requiring higher cost-sharing on alternatives. Republican Rep. Diane Black and Democratic Rep. Earl Blumenauer have introduced a companion bill in the House. Click here for a copy of the bill.

Medicaid Driving Increased Health Spending; MedPAC Details Provider Spending Growth Rates

Medicaid expansion in just over half the states appears to be driving overall health spending in the United States, according to an analysis released last week. While not surging, as in pre-Obamacare days, health spending is back on the upswing with hospitals leading the way. Click here for the WSJ story. Click here for one of the most interesting U.S. healthcare spending overviews written in the past several months – from Sarah Kliff at Vox. MedPAC last week reported that hospital inpatient and DME Medicare spending over the past 10 years was the slowest, while hospital outpatient and hospice had the fastest growth. Click here for the MedPAC report.

Study: Unhealthy States Cost Medicare More

Another report out last week details how unhealthy states are costing Medicare more and health states cost less. Louisiana ranks as unhealthiest and costliest. Utah is at the other end. Click here.

Lax ACA Enforcement Costs Consumers More

Another study shows that states with the worst ACA enforcement policies (Alabama, Missouri, Oklahoma, Texas and Wyoming) also added the most to the health care costs of their residents — particularly for health insurance coverage. Click here.

Report: ED Use Jumps in Medicaid Expansion States

A new report released last week from the Colorado Health Association found Emergency Department visits jumped 5.6% in Medicaid expansion states in the second quarter of 2014 versus the second quarter of 2013. Non-expansion states saw an increase of only 1.8% over the same time frame. The data comes from 25 states with about half from states with expanded Medicaid. Click here for their report.

Few Kids Have ED Visits

A separate report released last week found the ACA appears to have lowered the number of ED visits for young adults. The study used 2011 data from 3 states – California, Florida and New York – and tracked ED visits for 2 cohorts of young adults: those ages 19-25 and those ages 26-31. Altogether, the researchers extrapolate that American hospitals saw 60,000 fewer ED visits by young adults in 2011 as a result of the legislation. Click here for the study from Health Affairs (subscription required.)

MedPAC Releases New Reports on Pending Policy Issues

The Medicare Payment Advisory Commission (MedPAC) released a series of updates last week on several important issues in Medicare policy discussion. Their updates are in the form of PowerPoint presentations. MedPAC’s reports often drive health policy changes in Washington.

  • A review of the Medicare ACOs, including Pioneers, shows that they are most successful in “high service use” areas of the country. Click here.
  • Medicare margins have averaged 17 percent annually for home health agencies from 2001 thru 2012. Payments cuts have had little effect on accessibility or profit margins. Click here.
  • Hospital observation stays are increasing dramatically since the 2-midnight rule. Should Medicare create a short-stay (1-day) payment policy? How should it be structured? Questions are discussed. Click here.
  • Congress should require providers to purchase Least Costly Alternative drugs for their patients under Part B as a way to reign in pharma costs without decreasing quality. Click here.

Mercer Survey Says Employers Health Benefit Costs Will Increase 3.9% in 2015

A Mercer survey of employers released last week finds that per-employee health benefit cost will rise by an average of 3.9% in 2015. Two-thirds of respondents say they will make changes to their health plans next year to rein in cost growth. Low-cost consumer-directed plans are key strategy – 73% of large employers will offer one within three years. Click here for the Mercer report.

CMS to Delay Terminations of MA, PDP with Low Star Ratings

CMS is delaying, for one year, terminations of Medicare Advantage and prescription drug plans with persistent low performance ratings because it worries that the Star Ratings Program may disadvantage plans with unusually large numbers of poor enrollees, according to an agency memo released last week. The Star Ratings Program calls for terminating plans that score lower than three out of five stars three years in a row, and it awards bonuses to plans with high ratings. CMS issued a Request for Information (click here) to get more input on the issue.

CMS to Delay 5-Star Rating System for Dialysis Centers

CMS last week announced it will wait until January to roll out its five-star rating system meant to help consumers compare quality at dialysis centers and is reevaluating the timeline for extending it to hospitals and home care providers. Click here for the CMS memo.

WellPoint, Blue Cross Plans Dominate Exchanges

An analysis released last week found that in 12 of 15 states where complete data on market share of the health insurance exchanges are available, WellPoint or independent Blue Cross Blue Shield plans captured the greatest percentage of covered lives. Click here for the report from Avalere.

CMS Asked to Explain Policies on Speech Generating Devices

A bipartisan group of about 200 Representative and Senators sent a letter to CMS last week to explain new policies that they say has restricted access to speech generating devices. Such devices are often used by patients with diseases such as cerebral palsy or ALS. The letter says that a recent change by the DME Medicare Administrative Contractor has resulted in patients not getting appropriate access to the devices. Click here for a copy of the letter.

Insulin Prices Soaring

The price for certain drugs continue to soar. One of those drugs with significantly higher prices is insulin – increasing 500% over the past seven years. Click here for the Wall Street Journal story. Hospitals and other providers continue to struggle with shortages of drugs. What’s causing the shortages and what to do about them is the topic of a health policy brief last week in Health Affairs. Click here.

Report: Generics Saved Consumers $239 Billion in 2013

A new report from the trade group representing generic drug makers boasts that generic medicines saved Americans nearly $239 billion last year, a 14% increase from the year before. However, another analyst says the report does not factor in the rebates and discounts offered by brand name drug makers. Click here for the story. Click here for a copy of the generic drug report.

OIG: Louisiana Hospitals Overpaid for Meaningful Use

The Office of Inspector General has found that the Louisiana Department of Health and Human Services overpaid hospitals $3.1 million in Meaningful Use payments, according to a report it released last week. (Several other states are undergoing similar audits.) The OIG’s audit report examined Louisiana’s payouts in 2011 and found that 13 hospitals were overpaid $3.1 million, while six hospitals were underpaid by $1.3 million. Overall, the report found that 80 percent of Louisiana hospitals failed to comply with federal guidance and regulations. Click here for the OIG’s report.

Study Says Hospital Admin Costs Higher at For-Profits

According to a new study in Health Affairs, hospital administrative costs were higher at for-profit hospitals (where they comprised 27.2 percent of hospital spending) than nonprofits (where they represented 25 percent) and public hospitals (where they represented 22.8 percent). Administrative costs were below average at teaching hospitals and rural facilities, representing less than 25 percent of spending in both cases. Overall administrative costs grew in the U.S. with administrative spending increasing from 23.5 percent of total hospital spending in 2000 to more than 25 percent in 2011. Administrative costs in Canada fell 0.5 percent during the same period. Click here to access the study (fee required.)

Insurance Coverage for Children Nearly Unchanged

About 7.3 percent of children ages 17 and under were uninsured with no statistically significant change since just before Obamacare open enrollment, according to a study released last week. About three quarters of kids who don’t have insurance coverage are eligible for programs that preceded the law — Medicaid and the Children’s Health Insurance Program — because they come from families that make below 250 percent of the federal poverty level. Click here for the study.

CDC: Kids Missing Out on Preventative Services

A CDC report released last week finds that millions of kids are missing out on key preventive services, including screening for developmental delays, vision problems and chlamydia. For example, in 2009, more than half of kids and teens had not visited the dentist in the past year and in 2011, nearly half of girls aged 13 to 17 had not received their recommended first dose of HPV vaccine. Click here for the CDC’s report.

New Health IT Rules Offer More Flexibility

Health information technology developers, providers and consumers will get more flexibility through a final rule issued last week by the Office of the National Coordinator for Health IT (ONC) at HHS. The final rule adds flexibility as well as clarity and improvements to the current 2014 Edition electronic health record (EHR) certification criteria and the ONC Health IT Certification Program through a new “release” of optional and revised criteria (“2014 Edition Release 2”). Click here for the rule.