January 28, 2019

Large Hospital DSH Cuts Scheduled for October 1; MACPAC Says Congress Should Slow Them Down
The Medicaid and CHIP Payment and Access Commission recommended that if Congress allows the disproportionate share hospital allotment cuts to move forward that they change the law to slow them down to – $2 billion in 2020 instead of the scheduled $4 billion, $4 billion in 2021, $6 billion in 2022, $8 billion per year from 2023-2029. Additionally, MACPAC recommended that Congress should apply reductions to states with DSH allotments that are projected to be unspent before applying reductions to other states. The Commission further recommended that HHS update the DSH allotment methodology to distribute reductions in a way that gradually improves the relationship between DSH allotments and the number of non-elderly, low income individuals in a state. To review the recommendations, click here.

CMS Developing Medicaid Block Grant Plan
A small group of people within the Centers for Medicare and Medicaid Services is working on a plan to allow states to ask permission for their federal Medicaid dollars to be provided in a single lump sum instead of the way they are currently awarded as a percentage of states’ total costs. If they succeed, it could check off a top Republican priority of lowering spending on the health insurance program for low-income Americans, a dream goal they have frequently sought. Click here for details.

Former Budget Chief Defends Readmissions Reduction Policy
The former Director of the Office of Management and Budget under the Obama Administration, Peter Orszag, defended the policy that created incentives to force hospitals to cut their readmisission rates saying that much of the opposing articles on the program are the result of “unduly alarmist” reporting based on thin evidence. Orszag writes in the New England Journal of Medicine that while recent stories have contended that death rates have risen due to the policy, the time period and measurements used by researchers were not precise enough and that actually death rates may have gone down since the policy was instituted. To view the entire article, click here.

  • New study shows Medicaid readmissions cut by creating incentives for beneficiaries to attend follow up care. Click here

President Convenes Roundtable on Health Care Price Transparency and Surprise Billing
Patients, advocates, and health care providers joined the President and other Administration officials last week for a roundtable to raise the profile on medical surprise billing, highlighting the “unexpectedly large bills from hospitals.” There is also strong interest in Congress and because of strong bipartisan support for fixing this problem, legislation is likely to move through Congress this year.  HHS Secretary Alex Azar called for increased transparency in hospital billing, payor coverage, and drug prices, he highlighted the recent requirement for hospitals to post all prices as an important first step.  Click here for details on the meeting. To read the President’s opening remarks from the roundtable, click here.

OMB Health Director to Lead Administration’s Domestic Policy Council
The White House’s Office of Management and Budget health policy director, Joe Grogan, is set to lead the President’s Domestic Policy Council which will give him a huge influence over health care policy for the Administration. Grogan was a big influence over the HHS policy that cut reimbursement for 340B drugs by CMS and for the slow unraveling of ACA policies. A former pharmaceutical lobbyist, he has been an architect behind the scenes at OMB pushing through regulations impacting the health care industry leading to a Washington Post story back in 2017 on the “appointee you’ve never heard of who’s reshaping health policy.” Click here for more on the new appointment, and here for the Washington Post story.

Medicare Payments Won’t Cover Costs for Physicians
That’s according to a new survey conducted by MAGA Stat poll that found that 67-percent of medical practices report that 2019 Medicare payments will not cover the cost of delivering care to those patients who have more chronic conditions than in years past. Other concerning responses show that only 16 percent of the 478 that responded stated that they expected their Medicare payment rates would be above what it costs to deliver care to beneficiaries, and just 17 percent expect the rates to be equal to covering their costs. Physicians also stated that transitioning to alternative payment models has been difficult and slow, with many saying that the APM model costs “practices money to comply, with little promise for financial reward.” Click here for the poll.

Bipartisan Senate Group Looks for Answers on Liver Allocation Changes
More than 20 Senators including Chuck Grassley (R-IA), Roy Blunt (R-MO), and Debbie Stabenow (D-MI) sent a letter to HHS last week looking for information on a change in the national liver distribution policy made by the Organ Procurement and Transplantation Network. The new policy, announced in December, “could lead to prolonged waiting periods for many Americans seeking liver transplants,” according to the senators. In particular, the Senators raised concerns for transplant hospitals in rural and low-income areas leading to their patients waiting longer for a liver match and losing livers donated in their states. To view the letter, click here.

Cost of Insulin Almost Doubled in Five Years
The Health Care Cost Institute has released data on the average cost of insulin showing that, in the United States, the average cost has nearly doubled in 5 years from $2,864 per patient in 2012 to $5,705 per patient in 2016 with a lot of price variation across states. The study, based on an analysis of claims data from about 15,000 patients with type 1 diabetes and looking at both brand and generic insulin, attributed the trend primarily to rising prices, however the authors attribute the increased use of more expensive insulin products as well. Click here for the report.

  • Both the House Government Oversight and Senate Finance Committees scheduled hearings for Tuesday, January 29th to review drug pricing.  For more on the hearings, click here for Oversight, and here for Finance.

Number of Uninsured Increasing
The uninsured rate was at its highest since 2014 at 13.7 percent in the fourth quarter of 2018 according to a recent Gallup poll of Americans who self report their own health insurance coverage. The number of uninsured individuals has increased steadily since the third quarter of 2016, and is now the highest it has been since the health insurance exchanges opened but still much lower than prior to the implementation of the ACA when the rate was over 18 percent. Young adults under the age of 35 and women in households making less than $48,000 experienced the greatest increases. To view all the poll results, click here.

Senate Committee Leaders Re-Introduce Bill to Fix Drug Misclassification
The Chairman and Ranking Member of the Senate Finance Committee re-introduced legislation last week to give HHS the authority to reclassify a drug if it is inappropriately categorized in Medicaid for rebate purposes. The Right Rebate Act is a direct result of the Mylan EpiPen controversy when the pharmaceutical generic giant misclassified EpiPens as generic in Medicaid for years, which led to the government paying smaller rebates than it should have as a branded product while increasing the price of the allergy treatment. The bill, which was included in the House-passed IMPROVE Act last year, would let HHS recoup rebates and go after companies that are suspected of misclassifying branded products as generics. Click here for the bill language and here for the one-page summary.

  • The pharmaceutical industry association spent a record-breaking $27.5 million on lobbying last year, click here.

New Framework for Reimbursement Bundles Proposed
The Health Care Transformation Task Force, a collaboration of patients, payers, providers and purchasers, has issued a paper – Episode Groupers: Key Considerations for Implementing Clinical Episode Models – aimed at helping payers develop bundled reimbursement programs that builds on prior work by the National Quality Forum. They assert the key to success of private models is to adapt the bundles to services for younger patients by engaging closely with specialists and other  providers, structuring contracts so that clinicians are in charge, offering clear incentives for coordination and cost reduction, transparent sharing of data, and customizing episode groupers to fit the specific patient population. Click here to view the paper.

Hospitals’ “Grateful Patient” Fundraising Programs Examined
Nonprofit hospitals across the United States are seeking donations from the people who rely on them most: their patients. Many hospitals conduct nightly wealth screenings — using software that culls public data such as property records, contributions to political campaigns and other charities — to gauge which patients are most likely to be the source of large donations. Click here for the NYTimes report.

Measles Outbreak in Northwest US
The number of confirmed measles cases near Portland grew to 31 on Friday — an outbreak boosted by lower-than-normal vaccination rates in what has been called an anti-vaccination U.S. “hot spot.” Public health officials in southwest Washington, just across the Columbia River from Portland, Oregon, said people may have been exposed to the dangerous disease at more than three dozen locations , including Portland International Airport, a Portland Trail Blazers game, an Amazon Locker location and stores such as Costco and Ikea. Click here for more.

Social Safety Net Key To Health for Seniors: Report
Republicans on the Joint Economic Committee released a report last week finding that Americans have fewer people around to help provide care as they age compared with two decades ago. It says Medicare and Medicaid spending projections may be too low because they fail to take into account the declining social networks of aging baby boomers. The study found adults from ages 61 to 63 are now less likely to be in close geographical proximity to their loved ones. Seventy-five percent were married or cohabitating in 1994, compared with 69 percent in 2014.  Click here for the report.

Automation Will Impact Nearly Every American Job but Health Care “Relatively Safe” 
A new report by the Brookings Institute shows that automation and artificial intelligence will impact almost all occupational groups in the future, but the effects will be varied by job and drastic for only some. While packaging and manufacturing jobs are expected to see 100 percent automation, most in the health care field will see much lower impacts such as a little more than 50 percent of medical assistants jobs will be automated and just 11 percent of home health aides. Adding that “large swaths of economic activity – from health care and social services to coaching and government and education – will remain durably human and shaped by empathy, tact, and the human touch.” Click here for the report.

Your Commute Could Be Harmful to Your Health
Looking at various reports, the New York Times reviewed all the problems that traffic can cause for both physical and psychological health such as respiratory problems associated with long-term exposure to vehicle exhaust and the sense of helplessness people experience in traffic. And of course, we can’t forget road rage and its impact on people both on and off the road. The authors do suggest ways to alleviate the problems such as telecommuting and biking to work. Click here for the NYT article.

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