December 10, 2018

Non-Profit Hospitals Will Struggle in 2019: Moody’s & Fitch
Not-for profit hospitals will continue their course in 2019 of having their expenses outpace their revenue streams, according to a Moody’s Investors Service  report released last week. The outlook reflects Moody’s expectation that operating cash flow in this sector will decline by 2 to 4 percent over the next 12 to 18 months. This is the first time in several years Moody’s has issued a negative outlook on the nonprofit healthcare and hospital sector. This outlook also incorporates Moody’s expectation that hospital bad debt will continue to rise. More on the report, click here. Fitch agrees that non-profit hospitals will continue to struggle mostly due to shifts to outpatient care and “non-traditional” competitors emerge like Amazon, CVS, Express Scripts and others, click here.

  • Hospital organizations are suing the government over new regulations that take effect in January that cut payments for hospital outpatient department services.  Click here to review the lawsuit.
  • A new report says health care consolidation is causing increases in costs.  Click here to review.

Leapfrog Group Announces 118 Top Hospitals for 2018
The Leapfrog Group released its annual list of top hospitals last week with Florida, California, New Jersey and Texas had strong showings, with 12 or more hospitals making the list. Of the 118 Top Hospitals recognized, 13 were Top Children’s Hospitals, 35 Top General Hospitals, 53 Top Teaching Hospitals and 17 Top Rural Hospitals. To compile the list, The Leapfrog Group used data gathered through its annual hospital survey, which compares hospitals’ performance on national patient safety, quality, efficiency and management standards.  Click here to view the list.

  • The Joint Commission will soon require hospitals to have assessment tools and additional procedures in place to treat patients at risk of suicide beginning July 1, 2019, click here.


Two-Week Reprieve on Government Funding; New Health Bills Moving This Week
President Trump has signed a continuing resolution to keep the remaining 25-percent of the government without full year funding open until Dec. 21st. The short-term extension, H.J. Res. 143, maintains current funding for HHS, Labor, Defense, Homeland Security, and the VA among others along with extending the flood insurance program. Top members of the Chambers’ Appropriations panels say there is enough agreement to pass the other spending measures but funding for the Homeland Security Department – due to the southern border funding – is the sticking point. The President is set to host incoming House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) for a meeting on Tuesday to discuss the funding. Click here to view the resolution.

  • The House is using Medicaid rebate legislation introduced last week to pay for another bill (S.3702) that combines several other Medicare and Medicaid bills that have been under consideration for the past year or two.  Among the provisions: 1) a version of the ACE Kids Act that would create a new home health model for children in Medicaid with medically complex conditions 2) provide temporary funding for the Money Follows the Person demonstration that helps people with chronic conditions transition into their communities 3) new penalties on states that fail to comply with federal asset-verification requirements and 4) preventing manual wheelchairs from being included in the Medicare Competitive Acquisition Program.


CMS Finalizes Risk Adjustment Program Rules for Health Plans
CMS finalized a rule last week that adopted changes to the ACA risk adjustment program as a response to a federal court ruling that the program had been improperly operated. In February, the U.S. District Court for the District of New Mexico issued a decision vacating the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014-2018 benefit years. Although the litigation is still pending, CMS is issuing the final rule to “preserve the consistent, ongoing operation of the Risk Adjustment program for the 2018 benefit year.” To read the final rule, click here.


MedPAC Recommends 2-Percent Increase for Hospitals, Change in Billing for APNs
The Medicare Payment Advisory Commission last week voted to recommend to give short-term acute care hospitals a base 2-percent bump in payment in 2020 while also recommending to consolidate four existing hospital quality incentive programs into one, called the Hospital Value Incentive Program (HVIP).  Click here for a summary. This recommended combination of payment increase points towards the move towards a more valued based care system to reward high performing hospitals. In the same meeting, MedPAC voted to recommend to eliminate “incident to” billing for nurse practitioners and physician assistants and instead bill directly to Medicare for their services. To view all the presentations at the MedPAC December meeting, click here.


HHS Defends the International Pricing Proposal
After receiving backlash from industry, providers, and Members of Congress, HHS is defending its key drug pricing proposal that would benchmark Medicare Part B drug prices against foreign prices and slowly lower them over time. The International Pricing Index has received criticism that it would create price controls and hurt patient access. However, HHS officials are hitting back in a blog stating that the “demo doesn’t just seek to end foreign free-riding, it introduces competition and negotiation to Medicare Part B drugs.” To read the full blog post, click here.

  • Walgreens Boots Alliance Inc. and FedEx Corp. plan to offer next-day prescription delivery nationwide, clickhere.

Maternal Health Bill Sent to the President
While most health care policies – including expiring authorities – won’t be decided until next year in the New Congress, last week, the Senate approved a House-passed bill that would address maternal care shortages. H.R.315, the Improving Access to Maternity Care Act, would require HRSA to collect and analyze data to create a maternity health professional shortage area (HPSA) designation, based on provider types, geographic regions and population characteristics and use this to target maternity care resources where they’re most needed. The legislation modifies a decades-old federal program that places doctors in underserved areas creating incentives for OB-GYNs to serve them. This comes at a time when maternal mortality rates in the U.S. are higher than anywhere else in the developed world. To view the legislation, click here.

  • According to a new analysis, reforming the physician fee schedule would help close the income gap that has led to a shortage of primary-care physicians, click here.
  • New study shows that almost one-third of doctors practicing in the U.S. are foreign-born, click here.

Business Leaders Unite Against Public Charge Rule
In response to the Administration’s “public charge” proposed rule, more than 120 CEOs sent a comment letter opposing the Homeland Security proposed policy that would overhaul how the government evaluates whether a would-be immigrant is “not likely to be a public charge” (a requirement of many visa categories and green card applications). This new rule redefines “public charge” as including non-citizens who receive an amount greater than 15 % of the Federal Poverty Level (for a household of one) of certain benefits, including SSI, TANF, SNAP and federal housing support. The leaders state that the proposal would restrict access to talented workers from around the world. Click here to view the rule and the over 150,000 other comments from the public. And here for the CEO letter.

  • Another analysis says the public charge rule could harm health coverage for citizen children of non-citizen parents, click here.

HHS Inspector General Finds High Incidence of Harm at LTCHs
According to a recently released report by the HHS Office of Inspector General, almost half of LTCH patients experienced some level of harm during their stay, and half of those were preventable. However, at the start of the report, the OIG states “adverse events and temporary harm events do not always involve errors, negligence, or poor quality of care and are not always preventable, such as an unexpected allergic reaction,” and complex LTCH “patients may require acute-level services for extended periods of time and many are near the end of life.” The findings show that long-term care hospitals have the highest rate of patients experiencing harm; however, the OIG recognized that the higher level of acuity was not necessarily taken into account as LTCHs were compared to other post-acute settings. Click here for the report.


Rising Health Care Costs Detailed in New Reports
The middle class saw a sharp increase in healthcare spending in 2017, with average out of pocket costs hitting between $7,000-$8,000 in 7 states and the District of Columbia, according to a new analysis. This indicates that the wages that American families are bringing home are not offsetting the increased expenditure. The researchers suggests that increasing the required minimum value of employer plans would help reduce health care burdens on workers and their families. More details are available in the study here.

  • Another analysis, in Health Affairs, based on data from earlier this year, indicates that healthcare spending for 2017 outpaced the current inflation rate, click here.
  • A Wall Street Journal investigation finds the price of insulin has risen to the point where diabetics are starting Go Fund Me pages to help pay for the drug, click here.
  • CMS Office of the Actuary states that national health spending grew at a rate of 3.9 percent in 2017, almost 1.0 percentage point slower than growth in 2016, click here.

Texas Showdown: Insurance Companies vs Rural Hospitals
Since 2013, 18 of Texas’ 150 rural hospitals have closed, with a report from Episcopal Health indicating that 75% of those remaining are in danger of closing. A significant factor may be BCBS of Texas pushing unfavorable contracts on area hospitals. According media reports, BCBS of Texas controls 25% of the insurance market in Texas, making it prohibitive to drop the contract for the struggling hospital. Blue Cross Blue Shield of Texas has defended its position stating that it has pushed renegotiations with “a group of” rural hospitals because they held outdated contracts that “needed to be updated to include new protections for members and employers.” Click here for more.


Uterine Cancer Mortality on the Rise
The Center for Disease Control and Prevention reports that deaths due to uterine cancer are on the rise, one of only a few in the United States where death rates are increasing. The new data shows that uterine cancer rate have gone up 0.7 percent per year from 1999 to 2015, while death rates rose 1.1 percent each year from 1999 to 2016. The data also shows that black women are twice as likely as other women to be diagnosed with the disease and were more likely to die from it as well. Awareness of the need to have abnormal bleeding, often the first sign of uterine cancer, checked is critical to diagnosis, according to the CDC. Click here for more.

  • A  Brazilian study shows that snake venom can be used to derive a drug that can stop the growth of metastatic cancer, click here.

Pig Hearts May Be Able to Support Human Life
A new study details how genetically modified pig hearts transplanted into baboons could support life and function for up to 195 days, bringing science one step closer to the possibility of using donor animal organs for human patients in need of heart transplants. Although these findings are monumental, the FDA still raises concerns regarding the potential infection of recipients and potential for cross-species infection by retroviruses. Scientifically, researchers need to learn more about the long-term immune response to the foreign organ. To read the full study, click here.


6 to 8 Hours of Sleep a Night: Best for Health
A new sleep study by the European Heart Journal indicates, yet again, that sleeping for six to eight hours a night is the proper amount for good health, more or less hours puts you at risk. Researchers found that those who slept eight to nine hours had a five percent increased risk for cardiovascular disease or death and people who slept more than 10 hours had an increased risk of 41%. Naps during the day increased risk for cardiovascular events among those who slept more than six hours per night. The study was conducted by gathering lifestyle information on 116,632 people in 21 countries. Using self-reported sleep data, an eight-year follow-up recorded 4,381 deaths and 4,365 major cardiovascular events. Read the study, click here.

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