January 21, 2019

MedPAC Recommends Increases to Hospitals, LTCHs, No Increases for ASCs, SNFs, Reductions for IRFs, Home Health

The Medicare Payment Advisory Commission last week recommended 2-percent payment increases to both short-term acute and long-term acute care hospitals in 2020. Additionally, the Commissioners voted to recommend to replace the current hospital quality programs in 2020 with a new Hospital Value Incentive Program that five measure domains: readmission, mortality, spending, patient experience and hospital-acquired conditions. HVIP would also set clear, absolute and prospective performance targets and would use peer groups to address social risk factors.  MedPAC also voted to recommend eliminating the 2020 payment increase for skilled nursing facilities and Ambulatory Surgical Centers an recommended that ASCs file cost report. They also suggest that HHS revise the SNF PPS and annually recalibrate the relative weights of the case mix groups to maintain alignment of payments and costs as well as recommended to require ASCs file cost reports. Finally, the Commissioners recommended that Congress reduce payments in 2020 by 5-percent for both Inpatient Rehabilitation Facilities and Home Health providers.

  • Click here to review MedPAC’s hospital presentation.
  • Click here for the LTCH presentation.
  • Click here for the ASC and hospice presentation.
  • Click here for the SNF, home health and IRF presentation.

The American Hospital Association urged the commission to defer a final recommendation on the newly proposed incentive payment program (HVIP), citing significant concerns with the program’s design, click here.

MedPAC also reviewed data on the impact of Medicare ACOs (Medicare Shared Savings Program) and found that physician led ACOs saw greater savings than hospital led ACOs.  Click here for the report.

CMS Innovation Center Proposes Changes to MA and Part D
Citing added flexibility for plans, the CMS Innovation Center proposed changes on Friday to plans through both Medicare Advantage and Medicare Part D to offer lower prices for beneficiaries. The proposed MA health plan innovations will be tested in the Value-Based Insurance Design (VBID) model for 2020 when eligible Medicare Advantage health plans in all 50 states and territories may apply for the health plan innovations being tested under the VBID model. MA plans in the program can reduce some cost-sharing and provide more supplemental benefits to enrollees based on their chronic conditions or socioeconomic status and also include services such as transportation, starting in 2021, allowed to cover Medicare’s hospice benefit. The new model for Part D plans would require health plans that choose to participate in 2020 to assume more financial risk for beneficiaries whose spending hits the catastrophic phase, where Medicare covers 80 percent of the tab. If plans stay below a spending target, they will share in part of the savings and CMS said it believes the model could save taxpayers $2 billion a year. For the MA proposal fact sheet, click here, for the Part D proposal fact sheet, click here.

Hospitals’ Drug Costs Soaring
Hospitals have increased spending on drugs by almost 19% between 2015 and 2017 and the close of 2018 is not trending any better. Hospitals and hospital systems are being strained by soaring drug prices, according to a recently released AHA report. Hospitals experienced price increases in excess of 80-percent across different classes of drugs, including those for anesthetics, parenteral solutions, opioid agonists, and chemotherapy. The report indicates outpatient drug spending per adjusted admission increased 28.7% during the same period. Hospitals report that drug shortages put patient care at risk and create additional burden and cost. For the full report, click here.

Rural Docs Prescribe Opioids at Significantly Higher Rate than Urban Docs
According to recently released data from the Centers for Disease Control and Prevention, primary care doctors in rural areas continue prescribing the highly addictive pain medicines at a significantly higher rate than their metropolitan counterparts. CDC researchers analyzed prescribing rates between January 2014 and March 2017, a year after CDC issued opioid prescribing guidelines, for  31,422 primary care doctors serving 17 million patients in urban and rural areas. The data showed that rural patients were 87-percent more likely to receive an opioid prescription than those in large metropolitan areas. And while prescribing rates decreased in all regions after release of the guidelines, which advised limiting initial opioid prescriptions, they still remained higher in rural areas. Click here for the study.

  • MedPAC will be taking a very close look at how opioids are paid for and used in hospital inpatient and outpatient settings, as a result of the massive opioid legislation passed by Congress late last year.  Click here for details on how the analysis will be conducted and other details about the initiative.

CMS Administrator Asks Twitter Users To Blow the Whistle on Hospitals
In a tweet last week, CMS Administrator Seema Verma put out a call to the “twitterverse” to find out whether hospitals are complying with the agency’s price transparency rules that went into effect this month. “[W]e’re asking the Twitterverse to helps us make sure patients have access to the basic hospital pricing information (called the chargemaster) that is now required to be posted online,” she tweeted. The tweet urged viewers to visit their local hospital’s website and if viewers cannot find the required data, they were advised to send Verma a missive with the hashtag #WheresThePrice. Click here for the full tweet with links.

Proposed Medicare Part B to Part D Changes Will Likely Increase Patients’ Out-of-Pocket Costs
The proposed changes to Medicare Part B mainly focuses on drugs and transferring them into part Medicaid part D; the proposal was made as an effort to decrease overall expenditure on healthcare through the Medicare program. However, a report released from JAMA Internal Medicine indicates that that while the changes to Medicare parts B and D will decrease total costs, patients will likely see increased out of pocket costs for drugs. Those most likely to see increased costs are Medicare beneficiaries without supplemental Medicare insurance. The full report from JAMA can be found here.

Health Plan Tax Could Have Increased Premiums by Almost 56%: Report
If ACA tax on health insurers had been in place and fully passed on to beneficiaries through premiums, annual premiums for Medicare Advantage plans could have increased on average by 55.7 percent, or from $393 in 2018 to $612 in 2019, according to a new report. However, because of a one-year moratorium on the fee, the premiums are lower on average by 2.6 percent. The tax is scheduled to go back into effect in 2020, raising an estimated $16 billion in revenues, which plans say must be passed onto consumers. The Oliver Wyman study was commissioned by UnitedHealth Group, the country’s largest private Medicare plan, with about 25 percent of the market. To read the report, click here.

  • Meanwhile, UnitedHealth Group Inc. reported $58.42 billion in revenue in its fourth-quarter earnings report and said its full-year revenues in 2018 reached $226 billion – an increase of 12 percent, click here.

Almost 25% of Antibiotics Prescribed are Unnecessary
New data released last week by the Agency for Healthcare Research and Quality shows that almost 25-percent of anitbiotics that were prescribed in 2016 were unnecessary, with another 36-percent only “potentially appropriate,” and 28-percent of prescriptions were not linked to the patient’s diagnosis — showing that unnecessary antibiotic use could be even higher. Using commercial insurance data, AHRQ found that the vast majority of inappropriate antibiotic prescriptions in 2016 came from doctors’ offices, while 6 percent originated in urgent care centers, and 5 percent were from emergency departments. Ultimately, at least 3.6 million privately insured patients were using antibiotics for ailments that never called for them. Click here for the report.

“Medicaid Extenders” Bill Sent to the President
The Senate sent a bill to the President that would extend certain Medicaid policies, some which had expired in 2018. Both chambers had passed bills to extend the programs in the previous Congress but had never reconciled them prior to the end of the year. The bill (H.R. 259, the Medicaid Extenders Act of 2019), which the President is expected to sign, includes a nearly three-month extension of spousal impoverishment rules to let married couples protect certain assets while seeking Medicaid coverage for home- and community-based services, as well as $112 million for a roughly three-month extension of the Money Follows the Person demonstration that helps state Medicaid programs transition older adults and people with chronic illnesses back into their communities. Click here to view the bill.

CMS’ HOPD Payment Cuts Smack Rural Hospitals Hard 
Rural hospitals take a hit in Medicare reimbursement to the tune of $66 million as rural hospitals are already experiencing slim profit margins, meaning hospitals struggling could potentially shutter their doors. The hospital outpatient payment cut was imposed by CMS on January 1.  That narrow profit margin isn’t unusual. Rural hospitals, excluding high-volume rural hospitals, had an average 2 percent profit margin in 2014, according to a University of North Carolina Sheps Center for Health Services Research study.  94 rural hospitals have closed since 2010. Click here for the full rule and here for the study.

200 hospitals are expected to shoulder 73% of the cuts in CMS’ site neutral payment rule, according to a study commissioned by the Integrated Health Care Coalition by Dobson DaVanzo and Associates.  The proposed CMS policies were contained in the CY 2019 Medicare Hospital Outpatient Prospective Payment System (OPPS) rule.  CMS imposed site neutral payments for clinic visits, where the clinic is part of a hospital outpatient department.  In the final rule, CMS impased a two-year phase in the of the cuts – 70% of the cut is in place for 2019 and the full cut goes into place in 2020. The analysis assumes the full payment cut.

  • Click here for the analysis
  • Click here for the list of 200 hospitals
  • Click here for the 200 hospitals by state

Call for Proposals for the 4th Annual Social Determinants of Health Summit
The Root Cause Coalition, a national non-profit dedicated to addressing the social determinants of health through cross-sector collaboration, is hosting its 4th Annual National Summit on the Social Determinants of Health, which is scheduled for October 20-22, 2019 in San Diego. Last week, the Coalition released its call for proposals for individuals interested in serving as a keynote speaker, leading a breakout session or presenting a poster at the Summit. The Coalition is particularly interested in presentations that focus on collaborative interventions that  address the social determinants of health. If you are interested in submitting a proposal, or to find out more, please click here.

Experts Call for a Global Transformation of Food Production
The world must make sweeping changes to diet and food production to improve health and prevent “potentially catastrophic damage to the planet,” according to a new report. To keep humans and the Earth healthy into the future, the report’s authors propose a new “planetary health diet” that would mean cutting global red meat consumption in half and doubling the amount of fruits and vegetables we eat. According to the estimate by these experts, the diet could prevent as many as 11 million premature deaths per year if adopted worldwide. Additionally, the report recommends cutting food waste in half and enacting policies to make healthy food more affordable. To read the report, click here.

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