WEEKLY E-BULLETIN


60 Percent of Hospitals Could Have Negative Margins by 2025: CBO

According to a new analysis by the Congressional Budget Office that examines hospitals’ potential margins in the face of Medicare cuts and other reimbursement pressures, hospital finances could be significantly impacted. The paper suggests that acute-care, hospitals (3,059 participating in the Medicare Prospective Payment System) could see margins fall from the average 6 percent in 2011 to 3.3 percent or less by 2025, as Medicare payment changes take effect and more patients are covered by public insurance programs, which typically pay less than private insurance. Click here for the CBO analysis.

Infection-Related Deaths Go Uncounted: Reuters Investigation

Fifteen years after the U.S. government declared antibiotic-resistant infections to be a grave threat to public health, a Reuters investigation has found that infection-related deaths are going uncounted, hindering the nation’s ability to fight a scourge that exacts a significant human and financial toll. Even when recorded, tens of thousands of deaths from drug-resistant infections – as well as many more infections that sicken but don’t kill people – go uncounted because federal and state agencies are doing a poor job of tracking them. The CDC and state health departments lack the political, legal and financial wherewithal to impose rigorous surveillance. Click here for this investigative report.

MedPAC Sounds Alarm over Medicare Spending Growth

The Medicare Payment Advisory Commission (MedPAC) said last week it estimates that the Medicare trust fund is projected to be insolvent in 2028, 2 years earlier than MedPAC projected in its March 2016 report. This is according to an analysis the Commission’s staff released last week. Additionally, the report says per beneficiary spending growth has remained high in most fee for service settings and per beneficiary spending growth and Medicare spending growth is projected to rise. Click here to review MedPAC’s slide presentation. For a more in-depth summary on MedPAC’s meeting last week, click here.

GOP Considers Per-Beneficiary Cap on Medicaid Spending, New GAO Report Details

GOP congressional leaders are touting a new GAO report that analyzes a per beneficiary cap on Medicaid spending in states. The agency’s report notes different policy considerations policymakers should consider if they were to move to reform the program using the caps, which impose a per-enrollee limit on Medicaid funding that each state receives.  “A per capita approach is a worthy option that could, when paired with other program reforms, set Medicaid on a fiscally responsible course while protecting beneficiaries from harsh, across the board cuts in the future,” says Senate Finance Committee Chairman Orrin Hatch (R-UT).  Click here for the GAO report.

  • A report from the Urban Institute says these caps won’t work and will benefit richer states.  Click here.

CMS To Provide New MACRA Flexibility

CMS now says it will allow doctors participating in MACRA (Medicare’s physician Quality Payment Program) four options to comply with the first year of the proposed payment system and avoid penalties, which are set to hit in 2019. Acting CMS Administrator Andy Slavitt laid out the different pathways in a blog post. The new program is expected to start January 1 and physicians may do any one of the following:

  • Choose to report a full year of data and be eligible to receive the full bonus depending on their performance under the law;
  • Report all the MIPS-required data for less than a full year and receive a smaller bonus.
  • Report just some data for part of the year, and while they won’t get a bonus, they won’t get penalized either; or
  • Completely avoid reporting MIPS data by participating in an advanced alternative payment model.

Slavitt said more details on possible pathways are forthcoming. Click here to read the post.

  • A bipartisan group in Congress sent a letter asking CMS to consider easing into the scheduled January 2017 start date. They stopped short of asking for a delay in the start of MACRA; however, they pushed for flexibility to ensure a smooth transition to the new payment system. Click here for the letter.

CMS To Make Changes to Accountable Health Communities Model

CMS is modifying the Track 1 application requirements for the Accountable Health Communities Model and is releasing a new funding opportunity for Track 1 of the model. CMS is making two key changes with the objective of making the model more accessible to a broader set of applicants:

  • Reducing the annual number of beneficiaries applicants are required to screen from 75,000 to 53,000; and
  • Increasing the maximum funding amount per award recipient from $1 million to $1.17 million over 5 years.

Click here for details.

HHS Secretary Says 2017 Is a “Transition Year” for Health Insurance Market

Next year will be a “transition year” for the Obamacare insurance market, says HHS Secretary Sylvia Mathews Burwell. In a CNN op-ed, she acknowledged that the law is going through “inevitable growing pains” and that there are “issues and room for improvement.” Sign up for the fourth open enrollment season begins Nov. 1. Some health insurers are catching up on prices that were too low in prior years and some of the risk mitigation programs will end this year, she said. Click here for her op-ed.

Hospital Physician Group Ownership Skyrockets; Physician Group Consolidation Continues at Rapid Pace

Hospital ownership of physician practices has increased by 86% in the last three years, according to a new report. The analysis found that from 2012 to 2015, hospitals acquired 31,000 physician practices in the U.S. In 2012, about one in seven physician practices were owned by a hospital. In mid-2015, one in four medical practices, or 67,000 practices, were owned by hospitals. Click here. Meantime, the proportion of physicians in groups of nine or fewer dropped from 40.1 percent in 2013 to 35.3 percent in 2015, while the proportion of those in groups of one hundred or more increased from 29.6 percent to 35.1 percent during the same time period, according to a new analysis published last week in Health Affairs.  Click here for details.

The Uninsured Rate Falls Below 9 Percent

The U.S. uninsured rate fell to 8.6 percent in the first quarter of 2016, according to new data released by the CDC. Overall, the national uninsured rate has been cut nearly in half since the Affordable Care Act was passed in 2010, when 16.0 percent of Americans said they were uninsured. Altogether, 27.3 million people were uninsured between January and March of this year, down from 28.6 million in 2015 and 48.6 million in 2010. To read more from the CDC, click here.

New Analysis Ranks States for Best and Worst Health Care

Minnesota, Maryland and South Dakota are at the top of the list, while Mississippi, Louisiana and Alaska are ranked last on the list of states with the best and worst health care – this is according to WalletHub, a personal finance site.  Ranking were based on an analysis of cost, access and health outcomes.  Click here for the complete list of states.

CMS Rejects Ohio’s Plan to Push More Financial Accountability onto Beneficiaries

CMS has denied Ohio’s request change its Medicaid program that would, among other provisions, drop adult beneficiaries who don’t pay into a health savings account, regardless of their income. CMS said it was troubled by several proposals in the state’s waiver. Medicaid beneficiaries above and below the poverty level were expected to make monthly contributions to a health savings account. The amount was to be equal to 2% of income but not exceed $99 per year, or $8.25 per month. Members who were more than 60 days behind on payments would be dropped from the program and required to pay back the amount prior to re-enrollment. Click here for the CMS denial letter.

Pump Insulin Supply Limited due to Outdated Medicare Rule – HHS OIG

A new report issued by the Office of the Inspector General at HHS highlights an outdated rule in Medicare’s drug purchasing policies that is making it difficult for people who use insulin pumps to find suppliers for this drug. A 13-year-old benchmark price makes it an unprofitable product for companies, the OIG states in the report. It also said the rule costs Medicare millions each year in excess payments for a drug for congestive heart failure. The Medicare prescription drug law effectively tied payments for certain drugs to the average wholesale prices reported for 2003. According to the report, that created significant market distortions for medicines administered with devices classified as durable medical equipment. Click here to read the report.

CMS Finalizes New Provider Emergency Preparedness Rules

CMS has finalized a rule to establish consistent emergency preparedness requirements for health care providers participating in Medicare and Medicaid, increase patient safety during emergencies, and establish a more coordinated response to natural and man-made disasters.  Hospitals, Critical Access Hospitals, and Long Term Care facilities will be required to install and maintain emergency and standby power systems based on their emergency plan. However, CMS removed the requirement for additional hours of generator testing, flexibility to choose the type of exercise a facility conducts for its second annual testing requirement, and allowing a separately certified facility within a healthcare system to take part in the system’s unified emergency preparedness program. Click here for a CMS summary.  Click here for the rules.

NIH Launches Incentive Plan on Use of Antibiotics

The NIH officially launched a $20 million incentive program to spur development of diagnostics to test whether use of antibiotics is appropriate in patients.  Rapid diagnostics are urgently needed so doctors can test whether infections are bacterial or viral, and thus whether they will respond to antibiotics. Overuse of these life-saving drugs has spurred the spread of deadly superbugs resistant to the medicines. Doctors say they often feel pressure from patients to prescribe antibiotics, even when it is unclear if patients need them.  Click here for details.

Are State Innovation Models Working? CMS Says Too Early To Tell

According to the recently released evaluation by CMS of the State Innovation Model awards, it is too early to tell if the first round of awards changed provider behavior or improved care coordination, quality and population health while reducing costs. However, CMS does credit the initiative for making “notable progress” in accelerating health care change in Vermont, Arkansas, Massachusetts, Maine, Minnesota, Oregon and Vermont. For the evaluation, click here.

Misclassification in Medicaid Meant Higher Price for EpiPen

A loophole in how EpiPen was defined by CMS as an “innovator drug” meant it was considered a generic or “non-innovator” medicine for Medicaid rebate purposes because the drug it injects – epinephrine – is an old one. That designation meant the company paid lower rebates and wasn’t subject to the penalties brand drugs face when their price increases outpace inflation. EpiPen also was able to benefit from all the perks of FDA-approved new drug, with marketing exclusivity and patent protections. Key members of Congress are asking for more information regarding the classification and rebate obligations of EpiPen. Click here for the letter.

CMS Pushes Forward on Round I 2017 DME Program

CMS last week announced the new single payment amounts and began sending contract offers to successful bidders for Medicare’s Round 1 2017  Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. These new payment amounts and contracts go into effect on January 1, 2017. CMS has saved approximately $220 million per year in the nine Round 1 metropolitan statistical areas (MSAs) due to competitive bidding and other CMS fraud, waste, and abuse initiatives. The Round 1 Recompete contract period expires on December 31, 2016. Round 1 2017 contracts will become effective on January 1, 2017 through December 31, 2018. Click here for more info from CMS.

How To Fight Jet Lag

Jet lag – the bane of international travelers – may be “fixable”, according to a new analysis in the Harvard Health Care Blog.  Click here for the article.