April 29, 2019

Not-for-Profit Hospital Margins Positive in 2018: Moody’s
Following two-years of declines in profits, non-profit hospitals showed steady profitability in FY 2018, according to a Moody’s Investor Service research announcement last week. The research shows that non-profit hospitals operating revenue growth increased to 5.1 percent in 2018, which slightly exceeded their expense growth of 5 percent. However, the analysts caution that revenue growth still remains below historical levels in the “absence of significant growth in patient numbers, low reimbursement increases and a changing payor mix as an aging population drives Medicare enrollment higher.” Additionally, demand seems to not be increasing at a steady rate as growth rates for both inpatient and outpatient services was flat, along with an increase in competition in the outpatient sector.  For more from Moody’s, click here.  Click here for more from Healthcare Finance.

CMS Proposes Major Hospital Wage Index Change, DSH Adjustment, Payment Boosts for Hospitals and LTCHs
CMS last week released its proposed FY2020 proposed rule to update Medicare payment policies for hospitals under the Inpatient Prospective Payment System and the Long-Term Care Hospital Prospective Payment System. The proposal will increase payments for IPPS hospitals by 3.7-percent, totaling $4.7 billion in FY 2020, and increase LTCH payments by 0.9-percent or $37 million for the same year. CMS also proposed changes to the Medicare Wage Index under the agency’s priority of “Rethinking Rural Health” initiative that would increase the wage index for hospitals with a wage index value below the 25th percentile and to maintain budget neutrality CMS is proposing to decrease the wage index for hospitals above the 75th percentile to pay for it. CMS is also proposing to use a single year of data on uncompensated care costs from Worksheet S-10 of the Medicare cost report for FY 2015 to distribute disproportionate share hospital payments that are projected to be about $8.5 billion in FY 2020,  an increase of approximately $216 million from FY 2019. Click here for the CMS fact sheet, here for the proposed rule.  The Strategic Health Care experts prepared a 4-page summary, which can be accessed here.

  • Click here for more on the new payment policy for CAR-T, an innovative cancer treatment.

CMS Announces Major Voluntary Value-Based Primary Care Payment Model
CMS announced a new primary care model that seeks to pay doctors for providing stepped-up services that keep patients healthy and out of the hospital.  The model moves patients from fee-for-service to value-based and CMS officials said they hope to move at least 25 percent of fee-for-service patients into these new models. CMS anticipates releasing a Request for Application in spring 2019 for the first cohort of payers and practices. Practices and payers will begin participation in the model in January 2020. CMS anticipates accepting another round of applications during 2020, and that any practices accepted to participate in Primary Care First during 2020 would begin participation in the model in January 2021.  Not all parts of the country are eligible to participate when the program begins. Click here for more from CMS.  Click here for a summary from STAT.

  • CMS Administrator Seema Verma announced in a speech to the National Association of ACOs that the agency plans to launch mandatory payment models soon, click here.

House Committee To Hold First “Medicare-for-All” Hearing This Week
The House Rules Committee will hold the first hearing this Tuesday on legislation to implement Medicare-for-All (H.R. 1384) introduced by Rep. Pramila Jayapal (D-WA) last month. Witnesses are from various associations and think tanks, along with several physicians. House Speaker Nancy Pelosi pledged in January to allow hearings on the proposal in the rules and budget committees this year; however, Democratic leadership has stated that the controversial legislation will not be brought to the House Floor for a vote because of ideological splits within the caucus. To view the hearing notice, legislation, and witnesses, click here.

  • According to the Medicare Trustee’s Annual Report released last week, the trust fund  is expected to run out of money in 2026, click here.

Suit Filed To Stop New Liver Transplant Policy
Hospitals and patients have sued to block a new nationwide liver transplant policy. The U.S. Department of Health and Human Services and the United Network for Organ Sharing “hastily adopted the new policy and based it on faulty assumptions”, according to the suit filed last week in Atlanta federal court. At issue is a change in how patients are prioritized for liver transplants. Some parts of the country have fewer available organs — and higher demand for them — than others. The change, which was set to go into effect on April 30, redraws the map that governs how donated livers are distributed. Click here for the NYTimes story.

Major Physician Shortage Expected in the Next 12 Years
According to a recent report released by the Association of American medical Colleges, America is facing a physician shortage of between 46,900 and 121,900 by 2032. The group projects that the primary care physician shortage will be 21,100 to 55,200 physicians, the non-primary care specialties shortage will be 24,800 to 65,800 physicians, and the shortage for physicians in surgical specialties will be 14,300 to 23,400. An additional growing concern is that more than two out of five currently active physicians will be 65 or older within the next decade, and that continuing changes in physician retirement decisions could greatly impact supply. To view the report, click here.

Big Pharma Accused of Funding Patient Organizations to Support Lobbying Goals
As smaller non-profits began opposing letting Medicare negotiate drug pricing, Bloomberg News took a look into who was funding them. Several nonprofit groups have been found to be funded or started by Pharma companies. That’s not true for all of them, said Marc Boutin, the chief executive officer of the National Health Council, which has more than 50 patient groups and dozens of drugmakers as members. “There are a number of groups created by pharma companies that look and act like patient organizations, but they’re 100 percent funded by industry,” said Boutin, who didn’t name any specific examples. Click here for the full investigation.

  • Astellas Pharma to pay $100 million and Amgen to pay almost $25 million to the Justice Department to settle allegations they funneled donations to charities who covered patients’ copays for those companies’ drugs, click here.
  • Subcommittee on Health of the Committee on Energy and Commerce will hold a hearing on Tuesday, entitled “Prescription Drug Coverage in the Medicare Program” click here for details.

Prior Authorization Requirements Delaying Care for Cancer Patients: Survey
A recent poll by American Society for Radiation Oncology of 673 of its members found that 93-percent of radiation oncologists stated that their patients are delayed from life-saving treatments, and 31-percent said the average delay lasts longer than five days due to prior authorization requirements from their insurers. 32 percent of radiation oncologists said they were forced to use a different therapy due to the delays and 62 percent said authorization denials were turned over on appeal. Another recent report from Kaiser Health News details how cancer patients find themselves caught between providers and insurers on which clinicians and treatments they are approved to use, leading to the Pennsylvania Attorney General filing a lawsuit to protect patient choice. To view the poll results, click here, and for the KHN report, click here.

Big Decline in Children Covered Under Medicaid/CHIP in 2018
According to a new study by researchers at Georgetown University, 861,000 children lost coverage under Medicaid and the Children’s Health Insurance Program, which collectively saw an enrollment decline of 3.7 percent since peak enrollment in March 2017. Researchers believe that most of the children who lost coverage are not getting insurance through other means as employer-sponsored plans have long fallen short of providing coverage for low-income families. The Administration points to improving economy and lowering unemployment rates as the reason for lower Medicaid enrollment. To read the study, click here.

  • The American Cancer Society Cancer Action Network’s “Medicaid Covers US” campaign launched last week in six states to encourage expanding the program further, click here.

Nursing Homes Take a Hit in New CMS Rating System
With the overhaul of CMS’ 5-star rating program for Nursing Home Compare, approximately 37% of skilled nursing facilities lost at least 1 star, if not more. However, while CMS did raise the bar in quality, staffing, and survey results, the drop is not primarily related to the quality of care. The CMS methodology changes are the most significant reason, as there are two ratings, one for long-term stays, and one-for short-term stays. For SNFs with the loss of a star or more there is the potential loss of eligibility to participate in the skilled nursing facility three-day stay rule waiver program with next generation ACOs. By losing this eligibility, SNFs lose access to this pool of patients and their affiliated ACOs. Click here for the more detail on the overhaul.

Hospitals Garnish Patients’ Tax Refunds through Legal Loophole for Medical Debt
A recently released article from P&C sheds light on a law enacted over 30 years ago that has slowly evolved to become a major tool for private hospitals in South Carolina and some other states to collect on outstanding medical bill debt. Due to a program called Setoff Debt, private hospitals can submit to the Department of Revenue to seize taxpayers’  tax refunds to pay off their hospital debt.  If a state resident owes money to one of the hospitals signed up for Setoff Debt, the state agency will send it straight to the hospital, and charge the debtor a $25 fee to do so. In 2017, health organizations took at least $92.9 million in more than 172,000 seizures to pay off past-due medical bills. For the full article click here.

Measles Cases Growing Beyond Any Outbreaks in the Last 20 Years
The CDC has reported at least 626 people have been infected with measles, a disease virtually eradicated in the United States in the early 2000s. The first vaccine has a 95 percent effectiveness rate, and the booster has a 99 percent protection rate; however, the outbreaks have been primarily in Amish and Orthodox Jewish communities among the unvaccinated. In 2014, there were 667 outbreaks, if the trend continues 2019 will be the largest measles outbreak in the United States in 20 years. Click here for the latest on the outbreak from the CDC.

CMS Announces Deadlines for MSSP, BPCI Payment Models
ACOs must submit an intent to apply if they wish to participate in Medicare Shared Savings Program in 2020. The period during which the notice of intent can be submitted is June 11 – June 28, 2019. The application period runs from July 1 to July 29, 2019; however ACOs can submit sample agreements and documentation to receive feedback from CMS prior to the application period. Additionally, CMS opened the application period for Model Year 3 in April 2019, and  is accepting applications through June 24, 2019. The BPCI Advanced model, that goes through Dec. 31, 2023, is a single retrospective bundled payment model that combines payments to the physician, hospital and other healthcare provider services. Those who participate may get an additional payment if all the costs for an episode of care are less than a benchmark price, discounted by 3% however, exceeding the benchmark would require a repayment of up to 20% of the excessive costs to Medicare. For more information on MSSP, click here, and for the BPCI model application, click here.

FDA Proposes to Move Surgical Staplers to a Higher Risk Category
After receiving 41,000 adverse event reports related to surgical staplers from January 2011 through March 2018, including 366 patient deaths, the FDA has proposed moving the devices to a higher-risk regulatory category. The agency proposed to move staplers to Class II, the moderate risk category that requires manufacturers to show they are substantially equivalent to products already on the market to allow FDA to establish special controls such as performance testing, labeling requirements and assessments of health care providers’ understanding of the staplers. Currently, surgical staplers are in low-risk Class I category, where most products are exempt from regulatory review. Click here for the proposed rule.

Long-Term Antibiotic Use Linked to Increased Cardiovascular Risk in Women
A recent study suggests that long-term antibiotic use may be linked to an increased risk for cardiovascular disease (CVD) in women. Researchers looked at 36,429 women free of CVD, monitored their antibiotic use, and found that after 7 years, there were 1,056 cases of CVD. Women in their 40s and 50s who used antibiotics for two months or longer were found to have a 28 percent increased risk for CVD, while women over the age of 60 had a 32 percent increased risk. Leading the researchers to conclude antibiotic use in different life stages affects one’s risk for CVD and use in young adults does not display a significant association. To read the study, click here.

Millennials’ Overall Health is Declining
According to a report published by Blue Cross Blue Shield, millennials reported worse health outcomes in comparison to generation X. Prevalence of major depression increased among millennials by 31 percent. Millennials also had a higher prevalence of 8 of the top 10 conditions compared to generation X people of the same age. To read the full report, click here.

Skipping Breakfast Tied to Higher Risk of Heart-Related Death
A new study published in the Journal of the American College of Cardiology found that skipping breakfast was significantly associated with an increased risk of cardiovascular-related death, especially stroke-related death. After taking into account age, sex, race, socioeconomic factors, etc., the study showed that there was an 87 percent increased risk of cardiovascular mortality compared to those that ate breakfast. Click here, to read the full study.

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