WEEKLY E-BULLETIN


Hospital Changes Collections Policies After Public Pressure from Senator, Media

Mosaic Life Care hospital “deserves credit for doing the right thing after its practices were scrutinized,” Grassley, R-IA, wrote in a letter (click here) to his Senate colleagues, “but it should not take Congressional and press attention to ensure that tax-exempt, charitable organizations are focused on their mission of helping those in need.”  While the changes at the hospital are helpful to its poorest patients, news organizations ProPublica and NPR have found numerous cases across the country of nonprofit hospitals filing suits by the thousands.  Click here for the story.

CAHs, 340B, Medicare Part B: All on HHS Spring Regulatory Agenda

HHS’ has released its spring regulatory agenda that includes changes to critical access hospitals, Medicaid supplemental pay accountability, an update to the Programs of All Inclusive Care for the Elderly, as well as the expected annual payment updates. The regulatory agenda says CMS will propose a rule on “Advancing Care Coordination” for Medicare beneficiaries expected in August. CMS also plans to release a rule on Medicaid Disproportionate Share Hospital allotment reductions, but that rule isn’t expected out until January 2017. The agenda says a rule on hospital and critical access hospital changes and a rule on changes to the Medicaid eligibility quality control and Payment Error Rate Measurement programs were expected in May. They have not yet been released. To review the full agenda, click here.

500,000 Health Care Workers Likely Impacted by New Overtime Pay Rule

The federal government’s new rules on overtime pay may have major ramifications for healthcare workers, according to a new report.  The final rule, announced last month by the Department of Labor, addresses employees who work more than 40 hours a week, which will make 4.2 million more Americans eligible for overtime pay, 500,000 of whom work in the healthcare sector.  The changes, which take effect Dec. 1, leave hospital leaders with four options, according to experts: increase salaries to maintain the overtime exemption; pay overtime to workers who qualify; adjust wages; or spread out work hours and workloads. Click here for the report.  Click here to review the final regulations.

IRS Ruling Smacks Commercial, Nonprofit ACO

A recent ruling by the Internal Revenue Service creates a significant obstacle to the creation of commercial accountable care organizations that the Obama administration has promoted as a way to provide better care at lower cost, according to industry experts.  The I.R.S. denied a tax exemption sought by an accountable care organization that coordinates care for people with commercial insurance. The tax agency said the organization did not meet the test for tax-exempt status because it was not operated exclusively for charitable purposes and it provided private benefits to some doctors in its network.  This does not impact Medicare ACOs.  Click here for the NYTimes story.

Health Exchanges See Growing Individual Enrollment: Study

Because the ACA’s premium subsidies are available only through the federal and state exchanges, it is no surprise that the great majority of ACA-compliant coverage in the individual market is sold through the exchanges, according to a report released by the Commonwealth Fund.  For 2016, insurers project that only 17 percent of their anticipated 15 million ACA-compliant subscribers will purchase plans sold off of exchanges.  Insurers only selling plans that comply with the ACA’s coverage requirements off the exchanges spent 77.3 percent of revenues on medical claims and 14.2 percent on administrative costs.  By contrast, insurers only selling plans through the exchanges spent 79.2 percent on medical costs and 11.7 percent on overhead. Click here for the report.

  • Click here for a state-by-state look at premium changes between 2015 and 2016.

 New Study Shows there is a Shortage in Psych Beds

A new report from the Treatment Advocacy shows that about 20 percent of psychiatric beds for seriously mentally ill patients were eliminated over the last five years in the United States, while demand for such beds has skyrocketed. According to the report, only 3.5 percent of state hospital beds that existed in 1955 were still available in the first quarter of this year. Click here for the report.

CMS to States: Use Medicaid Funds to Fight Zika

In a letter sent to state agencies and officials last week, CMS suggested ways that Medicaid can help to combat the Zika virus in the U.S. – everything from covering the cost of mosquito repellent to family planning counseling and birth control. The federal program also covers some diagnostic services to help detect the virus such as CT scans, ultrasounds, and blood tests and in addition, covers treatment options for Medicaid beneficiaries under the age of 21 – which could be a potentially important avenue of health care for any infants born with microcephaly or other birth defects linked to the Zika virus. Click here for the letter.

Two More Insurers File Suits on Risk Corridors

Blue Cross and Blue Shield of North Carolina and Moda Health Plan of Oregon this week filed the third and fourth lawsuits against the U.S. government for falling short in its responsibility to fully pay insurers under the risk corridor program. Moda Health Plan, Inc., argues HHS owes it $180 million over two years under the so-called risk-corridor program of the health law. Blue Cross and Blue Shield of North Carolina filed a separate lawsuit seeking $129 million in 2014 unpaid payments. The risk corridor program was intended to help stabilize the new insurance markets created by the law by reallocating payments from insurers whose enrollees were healthier than average to those whose enrollees were sicker. Click here for more from BCBS, and here for more information on Moda from The Oregonian.

Health Care Spending Moderates; Rx Spending Growth Leads

Spending on healthcare services moderated during the first quarter of 2016 compared to last year, while prices rose slightly and robust job growth remained steady, according to new data from Altarum Institute.  Healthcare spending rose 4.7 percent during the first quarter compared to a year ago. That is significantly below the 5.8 percent increase reported for all of 2015.  The biggest growth area for spending remained prescription drugs. It grew at a 7.1 percent clip during the quarter. However, that is also significantly lower than the 9.5 percent growth rate for 2015. Click here for Altarum’s report.

  • Money-Back Guarantees
    • As payers and health care providers push back against the cost of drugs and devices, manufacturers are responding with new openness to risk-sharing, according to a new analysis. Cigna has struck agreements with makers of cholesterol-lowering medications that will cut payments if patient outcomes fail to meet those seen in clinical trials, and Stryker will pay as much as $5 million if its surgical sponge tracking system fails and results in a problem. Click here for details.

Progress Made To Avoid Ambulance Diversions; More Efforts Needed

How often is your hospital on ambulance diversion?  Some facilities have made progress in reducing diversion, but there is still progress to be made, according to a policy brief published in Health Affairs last week.  As recently as 2003, 45 percent of emergency departments went on diversion status, a move seen more as an emergency measure for overcrowded emergency rooms than a solution to the problem. In the short term, it is an effective way to allow an ED to clear space as it handles an overflow of patients, but it can cause a domino effect that leads surrounding hospitals to also divert ambulances.  Click here for the brief.

FDA to make it Easier for Physicians to Request Experimental Drugs

FDA is moving towards making it easier for physicians to request experimental drugs for patients with life-threatening illnesses by finalizing a simplified form the agency says would take physicians 45 minutes, instead of days, to fill out. The agency also released guidance to make the process clearer and said requiring a full institutional review board review could deter access while other options might better facilitate patient access. FDA also released question and answer guidance that explains what the process is, and when and how to request expanded access. Click here for the FDA application and guidance.

MedPAC Recommends Changes to CMS’ 2017 Proposed Payment Regs

MedPAC provided detailed comments last week to CMS’ proposed regulations impacting hospital inpatient payments, LTCHs, Hospice, IRFs and SNFs.  For you health policy-minded professionals, the MedPAC comment letters provide an excellent perspective on key aspects of the proposed rules.  MedPAC both supports and opposes parts of these rules and clearly outlines its positions.  Click here for the Inpatient rule comment letter.  Click here for Hospice; here for Inpatient Rehab; and here for SNF.

MedPAC Appoints Five New Members

The Medicare Payment Advisory Commission, MedPAC, which advises Congress on Medicare payment policies, has announced the appointment of five new members.  MedPAC’s recommendations are often viewed as very influential – not only within Congress but at CMS, other agencies and within private organizations.  Click here for the announcement.

Hospital Certified EHR Adoption at 96 Percent:  Report

The rates of electronic health record adoption and data sharing among U.S. hospitals have increased significantly, according to a pair of new data briefs unveiled last week by the Office of the National Coordinator for Health IT at its annual meeting. One brief shows that 96 percent of nonfederal acute care hospitals are using a certified EHR in 2015, up from 71.9 percent in 2011, the year that the Meaningful Use program was first implemented. Adoption of a basic EHR jumped from 9.4 percent in 2008 to 83.8 percent, a nine-fold increase.   Small, rural and critical access hospitals also increased their adoption of basic EHRs, with small and rural hospitals boosting adoption by at least 14 percent, and CAHs by 18 percent. Click here for the data report.

FDA Sets its Sites on Salt

FDA last week released sodium reduction targets that apply to nearly 150 different food categories, from blue-veined cheese to toddler puffs. A spreadsheet issued by the agency details 2010 baseline sodium data for each of the categories and then lists short-term and long-term target weighted average ranges for each. The FDA says is intended “to provide measurable voluntary draft short-term (2 year) and long-term (10 year) goals for sodium content.” Click here for the draft guidance, and here for more information on sodium reduction efforts at the FDA.

U.S. Death Rates Up: CDC

The age-adjusted death rate in the United States was 729.5 per 100,000 people in 2015, up from 723.2 the year before. According to the new CDC report, there were notable spikes in deaths related to Alzheimer’s and homicide last year, among other drivers. Meanwhile, the age-adjusted death rate for conditions like HIV and pneumonia continued to fall. Click here for the CDC report.

Senior NIH Doctors Unhappy with Restructuring

Several senior doctors at the National Institutes of Health say the leadership was unfairly demonized in an independent report that claimed the clinic has gradually put patient safety second to research. In a letter to NIH Director Dr. Francis Collins last month, seven department heads and renowned physicians stated that the report demoralized staff, and the idea that patient safety had taken a back seat to anything at the clinic was simply incorrect. Click here for the report and here for more from the Wall Street Journal.