Not-For-Profit Hospitals Showing Strong Gains: Fitch

Median operating profitability for U.S. not-for-profit hospitals showed strong gains over the past year, though growth in operating cash flows show the credit gap widening between higher- and lower-rated borrowers, according to Fitch Ratings in a new report. Click here for details.


Most Bundled Payments Are Hips and Knees; More ACO Analysis Raises New Issues

An analysis of Medicare’s new bundled payment program shows a strong and growing interest in alternative payment models among providers, according to a report from Avalere. Data show there will be 1,755 provider organizations participating in Phase 2 of the CMS’ Bundled Payments for Care Improvement Initiative (BPCI). Of the total number of providers participating in Phase 2, approximately 1,350 entered at the July 1, 2015 deadline imposed by CMS. Click here for more details.

  • Joining an accountable care organization (ACO) may not be a matter of urgency for most physician practices, according to an article last week from the American Academy of Family Physicians. Both ACO and non-ACO practice doctors received about half of their compensation in salary and a slightly smaller amount based on their productivity, according to the survey of 632 medical practices. Only about 5 percent of total pay was linked to quality measures. Click here for the AAFP article.
  • Only about one-quarter of participants in Medicare’s shared savings accountable care program actually generated shared savings, as did only 12 of 32 original Medicare Pioneer ACO participants; 13 of the original 32 have dropped out. Despite mixed results, there were impressive performances among the successful Pioneer organizations. ACO best practices are emerging, which population health management and analytics firm Caradigm examines in a recent white paper. Click here for their report.

CMS Sets Straight Two-Midnight Enforcement Changes

CMS last week wanted to set the record straight regarding the enforcement of the two-midnight rule. Contrary to multiple reports in the media, there is no further delay in audits. CMS will begin providing quality improvement organizations (QIOs) with monthly reports of the volume of short inpatient admissions shortly, and the QIOs can start requesting records at that time. CMS indicated that small hospitals will have a minimum of 20 records reviewed per year, with at least 50 per year for large hospitals. A summary of last week’s CMS’ conference call on this issue can be read here. Click here for more analysis on the two-midnight changes being implemented by CMS.


Percentage of Skilled Nursing Payments for High Intensity Patients Increasing

Medicare paid nursing homes about $28 billion in 2013, 10% more than it would have paid if the proportion of days billed at each therapy level had been the same as in 2008 and 24% more than if the proportions had mirrored 2002 billing patterns, according to a new Wall Street Journal analysis of payments to skilled nursing facilities. Click here for the WSJ story.


Northwest Health System Slashes Outpatient Prices

While health care costs continue to rise throughout the United States, Swedish Health Services, a Seattle-based health care provider, has cut prices for 90 percent of its outpatient services by an average of 35 percent in its five hospitals, two ambulatory care centers, and 100 clinics across the Puget Sound area – all recently reported by the Heartland Institute. MRIs once billed at $6,100 per use now cost only $1,810, a 70 percent price cut. Click here for the story.


Advocates Fighting CMS Change to Payments for Lower Limb Prostheses

The Amputee Coalition and the American Orthotic and Prosthetic Association are pushing back against a new proposal from CMS contractors that they say could drastically limit the availability of lower limb prostheses. They’re launching a two-week campaign with print ads, broadcast ads and an event, later this month to highlight the impact the proposal could have on Medicare patients with limb loss. Click here for a summary from AOPA. Click here to read current policy; click here for the proposed changes.


Medicare Advantage Skewed Against Not-for-Profit Insurers

Small, regional not-for-profit insurers are feeling a negative impact from the Medicare Advantage program that could force them to raise premiums, cut benefits or even leave the market, according to reports in New York State last week. They largely attribute those losses to three elements–reimbursement reductions, taxes and fees–plus the rising cost of care and prescription drugs. Click here for the story.


Study: Provider Owned Health Plans Don’t Have Lower Premiums

Provider-owned health plans don’t seem to produce lower premiums, according to a new HealthPocket study released last week. Bronze and gold provider-owned plans were 13 percent more expensive than the cheapest bronze and gold plans not owned by providers. It compared the premiums for bronze, silver, gold and platinum plans sold on the federal exchange. Click here for the HealthPocket analysis.


Large Insurers Increasing Premiums More Than Small Insurers on Exchanges

The largest insurers in the state exchanges raised premiums an average 75% more this year than smaller insurers in the same state, according to a new study in the Harvard Journal of Technology Science. The largest insurance issuers raised rates by an average 23.9%, while the other issuers raised rates by an average 13.7%. Additionally, the largest insurers did not appear to be paying for higher medical costs per premium dollar. Click here for the study.


Details of Centene’s Proposed Acquisition of Health Net Revealed

Centene Corp’s recently proposed acquisition of Health Net came after the latter health insurer’s board had discussed the possibility of a merger as far back as 2013, this is according to a Securities & Exchange Commission (SEC) filing. Centene, which is based in St. Louis, announced its plans to take over California’s fourth-largest health insurer in early July, right around the same time that news broke of a bigger insurer merger between Aetna and Humana. Anthem and Cigna followed with their announcement of an even larger deal later in the month. Click here to read the detailed and fact-rich filing.


Report: Co-Ops Remain in Financial Difficulty

Obamacare’s co-op plans attracted lots of customers — and continued losing millions of dollars — during the first quarter of 2015, according to a report released last week by A.M. Best Co. The nonprofit plans tripled enrollment from a year earlier, attracting nearly 900,000 customers during the 2015 open-enrollment period. But medical and administrative costs continued to outpace premiums, resulting in $72.4 million in losses during the first quarter of this year. Click here for the A.M. Best report.


Report: Most Community Hospitals Not Satisfied with Their EHRs

A new report found that 54% of community hospitals are not satisfied with the usability of their EHR platforms and almost 20% of that group are looking for a different EHR vendor. The report also showed that many community hospitals are struggling with EHR meaningful use measures, with 11% of survey respondents reporting they have yet to begin the attestation process and 36% saying they are in the middle of it. Click here for more.


Majority of Americans Concerned with Cost of Prescription Drugs

70 percent of Americans view the cost of prescription drugs as “unreasonable,” according to the latest Kaiser Health Tracking Poll. Asked about potential solutions, at least seven in 10 adults supported requiring drug companies to publicize how they set prices, allowing the government to negotiate lower prices for people on Medicare, limiting the amount drug companies can charge for high-cost drugs, and allowing Americans to buy drugs imported from Canada. Click here for the Kaiser Poll.


California Will Vote To Limit Some Drug Costs; Ohio May Follow Suit

Advocates pressing for lower drug prices in California achieved a major victory last week, obtaining enough signatures to qualify their California Drug Price Relief Act for a ballot vote expected for November 2016, according to the AIDS Healthcare Foundation, which is pushing the measure. If voters approve the initiative, it would require state laws to be revised so that government health programs would pay no more for prescription medications than the prices negotiated by the Department of Veterans Affairs. A similar effort is underway in Ohio. Click here for more.


Walmart’s Pharmacy Business Struggling Because More Patients Have Insurance

Walmart runs the third largest pharmacy operation in the United States, but its Rx business is not nearly as profitable as it once was, according to Walmart’s own information. The company’s struggles are being seen throughout the pharmacy industry, which remains profitable even if the margins are getting thin, according to analysts. It’s one of the dirty secrets of the pharmacy industry that uninsured people frequently pay more for drugs than those with insurance. That’s because the prescription drug plans can use their clout and scale to negotiate lower reimbursement rates with the pharmacies, while uninsured people pay more. Click here for details.


Telemedicine-Across-State-Lines Act Gets Big Push

Twenty-one organizations have signed onto the Telemedicine for Medicare Act of 2015, which was recently introduced in both the US House of Representatives and the US Senate. The bill, which was previously proposed in 2013, would enable physicians licensed in one state to care remotely for Medicare patients in other states without getting additional medical licenses in those states. Click here for details.


Medicaid Leading Payor for Kids with Asthma and Diabetes

From 2003 to 2012, Medicaid rather than private insurance increasingly became the leading payer of potentially preventable pediatric hospital stays for asthma and diabetes. By 2012, Medicaid paid 58 percent of the asthma stays compared with 36 percent paid by private insurance. That same year, Medicaid paid 47 percent of the diabetes stays while private insurance paid 45 percent of them. Click here for details.


HHS Hosting Call on ICD-10 This Week; Registration Required

HHS is hosting a national call for medical, billing and administrative staff this week on August 27 to offer final tips and guidance for the October 1 transition to ICD-10 codes. Among the topics for the call are testing results, guidance handling claims that involve dates before and after the deadline, and additional resources. Click here to register for the call.


PCORI OKs $57 Million in New Studies

The Patient-Centered Outcomes Research Institute last week approved $56.7 million to study in clinical settings treatment options for appendicitis, ways to improve behavioral and mental health care, and options to prevent blood clots in patients getting hip and knee replacements. The institute also approved $9 million for two studies on obesity, one on weight loss surgery and the other on weight gain that may be caused by antibiotic use among young children. Click here for the details from PCORI.


Advocates for Radiology Pushing Back on MedPAC Data

Advocates for radiology are criticizing new data from the Medicare Payment Advisory Commission that show growth in medical imaging from 2000 to 2012. In fact, the data indicate that imaging utilization has been declining since 2009. Imaging advocates say MedPAC’s annual data book released in July paints an inaccurate picture of the specialty. Click here for the report.


Presidential Candidates Fight Over the Affordable Care Act

Republican presidential candidates Scott Walker, Marco Rubio and Bobby Jindal have issued plans to repeal and replace the Affordable Care Act, with proposals that include allowing Americans to buy health plans across state lines, using tax deductions instead of credits, basing tax credits on age instead of income and allowing states to set rules for insurers. Click here for more. The Clinton campaign hit back on YouTube – click here.


Mutant Head Lice Immune from Over-the-Counter Treatments

Head lice populations in 25 U.S. states are now immune to over-the-counter permethrin treatments, while head lice in four more states have developed partial resistance to such treatments, according to a study presented at the annual meeting of the American Chemical Society. Researchers also found that prescription medications without permethrin are still effective against head lice, which affects 6 million to 12 million U.S. children each year. Click here for more.