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Monthly Archives: March 2017
MedPAC discusses Part B reforms, MACRA: 6 takeaways
http://www.beckershospitalreview.com/finance/medpac-discusses-part-b-reforms-macra-6-takeaways.html
The Medicare Payment Advisory Commission held a public meeting March 3, where commissioners discussed recommendations to reduce growth in Part B drug spending and ways to help physicians transition from Medicare’s Merit-based Incentive Payment System to Advanced Alternative Payment Models.
Here are six takeaways from MedPAC’s discussion.
1. Commissioners addressed the chairman’s many proposals for reforming Medicare Part B, which covers prescription drugs administered in a physician’s officer or hospital outpatient department. The proposals call for modifying the reimbursement for Part B drugs that are paid for based on wholesale acquisition cost — a manufacturer’s undiscounted price to wholesalers or direct purchasers. Under the proposals, the payment rate for WAC-priced drugs would be reduced to WAC plus 3 percent, down from the current rate of WAC plus 6 percent.
2. Under the proposals, all Part B drug manufacturers would be required to submit annual average sales price data. Currently, only Medicare Part B drug manufacturers with Medicaid drug rebate agreements are required to submit annual average sales price data. The proposals would also increase the penalties for not reporting.
3. For drugs that are paid for based on average sales price, physicians and hospital outpatient departments are typically paid the ASP of a drug, plus a 6 percent add-on. The proposals would require manufacturers to pay Medicare a rebate with the ASP for their product if it exceeds an inflation benchmark such as the consumer price index.
4. The Medicare Access and CHIP Reauthorization Act established two pathways for clinician participation: the Merit-based Incentive Payment System, or MIPS, and the Advanced Alternative Payment Models, or Advanced APMs. To help move clinicians from MIPs to Advanced APMs, the commissioners discussed limiting the potential upside in MIPS.
5. The commissioners also discussed proposals that would make Advanced APMs more attractive to clinicians, including creating an additional upside for two-sided ACOs.
6. MedPAC will vote on the proposals next month for possible inclusion in the commission’s June report to Congress.
The American Health Care Act: 10 things to know
After years of lobbying to repeal and replace the ACA, House Republicans put forth The American Health Care Act on Monday. Here are 10 things to know about the legislation.
1. The AHCA would eliminate the ACA’s individual mandate, or requirement for American adults to enroll in health insurance. Further, the legislation eliminates the tax penalty adults faced if they were not covered. However, the concept of penalties still remains in some form: To encourage people to buy coverage, the AHCA lets insurers charge a 30 percent penalty for those who let their health plans lapse and try to buy a new policy, according to NPR.
2. The AHCA calls for Medicaid expansion to remain in effect through Jan. 1, 2020. This is different from earlier drafts of legislation, which called for an immediate reversal of Medicaid expansion. Thirty-one states, plus Washington, D.C., have opted to expand Medicaid under the ACA. By 2020, the government will “freeze” the expanded programs and restrict funding only to people who were in the program as of then — no added enrollees from that date on. States would keep getting that amount of federal aid for each Medicaid enrollee as long as the enrollee doesn’t lose eligibility for more than a month. There is also a provision in the AHCA that calls for grants of extra Medicaid provider reimbursement funds to go toward states that didn’t expand Medicaid.
3. The AHCA restructures Medicaid’s federal funding to a per-capita cap opposed to the current open-ended federal entitlement, reports Politico. States would receive capped payments based on how many people are enrolled in Medicaid. The plan also calls for more frequent eligibility testing of Medicaid enrollees.
4. The AHCA restructures Americans’ tax credits to buy health insurance. It replaces income-based subsidies under the ACA with refundable, age-based and income-capped tax credits, according to Politico. These credits increase with age, from as low as $2,000 for those under 30 or as high as $4,000 for those over 60. There would be a limit as far as credits for a single household — $14,000 — and subsidies would be eliminated over time for individuals with annual income of $75,000 and for families with annual income of $150,000, according to the report.
5. A few ACA staples roll over in the AHCA. The ACA provision related to pre-existing conditions would remain intact, meaning insurers would not be able to deny coverage or increase prices for people with such conditions, reports Reuters. Also, the AHCA retains provisions allowing adults up to age 26 to maintain coverage through their parents’ health plans, according to the report.
6. The AHCA eliminates the cap on the tax exemption for employer-sponsored insurance. Although earlier drafts of legislation capped the exemption at 90 percent of current premiums, the final version eliminated the proposal, according to Politico. The bill also gets rid of the penalty for businesses that do not offer employees health coverage.
7. The AHCA delays the effective date for the ACA’s Cadillac Tax on costly health plans from 2020 to 2025, according to The Hill. GOP lawmakers are delaying but keeping the tax to make certain their replacement plan will not increase the national deficit after a decade.
8. The AHCA bars federal Medicaid funds or federal family planning grants for Planned Parenthood clinics, according to the report. (Separate from the AHCA, the White House earlier this week extended terms for a compromise to Planned Parenthood by proposing maintained federal funding if the group agrees to discontinue providing abortions, according to ABC News.)
9. The cost of the AHCA is not yet known. The nonpartisan Congressional Budget Office has not yet scored the legislation, which means there is neither a cost estimate for the plan or how many Americans would gain or lose insurance under it.
10. What’s next? The House Ways and Means and Energy and Commerce committees are expected to review the AHCA legislation Wednesday. If the committees approve the measure, the full House could potentially act on it before April 7, according to The New York Times. The measure would then be taken up by the Senate.
5 steps to get your hospital’s MACRA strategy off and running
Anand Krishnaswamy, vice president of Kaufman Hall’s strategic and financial planning practice, makes the case that MACRA readiness should be a priority not only for physicians, but also for hospital boards and executives.
The first performance year of the Medicare Access and CHIP Reauthorization Act is now underway, which will determine Medicare Part B payments in 2019. Although 2017 is designed to be a transition year, providers who dive in now have the opportunity to maximize financial rewards and set themselves up for success down the line.
“The biggest underlying issue is the lack of awareness and engagement by health systems and physician groups,” Mr. Krishnaswamy tells Becker’s. Though many providers are distracted by the uncertainty on Capitol Hill, MACRA and value-based care are likely here to stay — and it’s time for hospitals to craft a strategy.
Mr. Krishnaswamy suggested providers take the following five steps to prepare for MACRA.
Fitch: Changes to Medicaid in ACA repeal bill pose risks for hospitals
House Republicans’ proposed ACA repeal and replacement plan, known as the American Health Care Act, calls for changes to Medicaid that expose states and hospitals to new fiscal risks, according to a Fitch Ratings report.
The AHCA would eliminate Medicaid’s entitlement structure and restructure the program’s federal funding to a per-capita cap system on Jan. 1, 2020. This change is intended to slow Medicaid spending growth. The Kaiser Commission on Medicaid and the Uninsured estimates switching to a per-capita cap system would reduce federal spending on Medicaid by $1 trillion (or 26 percent) over 10 years. This reduction would require states to make significant budgetary changes and could result in reduced reimbursement for hospitals, according to the report.
The AHCA calls for the government to freeze expanded Medicaid programs on Jan. 1, 2020, and restrict funding only to people who were enrolled in the expanded programs as of Dec. 31, 2019. Under the ACHA, states that expanded Medicaid “will be faced with a unique policy predicament of denying Medicaid access to individuals who would otherwise qualify beginning in 2020, or taking on significant costs they had anticipated would be bored largely by the federal government,” according to Fitch.
5 hospital bankruptcies, closures so far in 2017
http://www.beckershospitalreview.com/finance/5-hospital-bankruptcies-closures-so-far-in-2017.html
Here are five hospitals that filed for bankruptcy protection or closed since Jan. 1, beginning with the most recent.
1. Humble (Texas) Surgical Hospital filed for Chapter 11 bankruptcy Feb. 24. The hospital filed its bankruptcy petition after a judge ordered it to pay Hartford, Conn.-based Aetna $51.4 million in a seven-year-old court battle over the hospital’s out-of-network charges.
2. Louisiana Heart Hospital in Lacombe closed Feb. 10. The 134-bed hospital and its affiliated medical group filed for Chapter 11 bankruptcy Jan. 30.
3. Gardens Regional Hospital and Medical Center, a 137-bed hospital in Hawaiian Gardens, Calif., closed Feb. 1. The hospital, which served mostly low-income patients and was part of Los Angels County’s safety net, faced financial troubles for years and filed for Chapter 11 bankruptcy in 2016.
4. North Texas Medical Center in Gainesville, which is owned by the Gainesville Hospital District, filed for Chapter 9 bankruptcy Jan. 17. With the hope of regaining its financial footing, the hospital’s board approved a partnership with King of Prussia, Pa.-based Universal Health Services in December.
5. The public trust that operates Atoka (Okla.) County Medical Center filed for Chapter 9 bankruptcy Jan. 10. The critical access hospital is about $16 million in debt.
Moody’s: GOP’s American Health Care Act is credit negative for nonprofit hospitals
If House Republicans’ proposed ACA repeal and replacement plan, known as the American Health Care Act, were to become law in its current form it would be credit negative for nonprofit hospitals, according to Moody’s Investors Service.
The components of the AHCA most likely to negatively affect hospitals are transitioning federal Medicaid payments to a per-capita payment to the states, the Medicaid expansion freeze in 2020 and how subsidies are calculated for individuals who purchase insurance on the exchanges, according to Moody’s.
Under the legislation, the uninsured rate would rise, which would cause hospitals’ bad debt and uncompensated care costs to increase, according to Moody’s.
The AHCA’s retention of Medicaid expansion and elimination of scheduled disproportionate share cuts for states that did not expand Medicaid would have a positive impact on nonprofit hospitals, according to Moody’s. However, the rating agency said the positive effects are not enough to compensate for the credit negative components of the AHCA.
Outcomes for High-Needs Patients: Practices with a Higher Proportion of These Patients Have an Edge
Synopsis
Patients with high health care needs enrolled in Michigan primary care practices that treat a large proportion of such patients had lower health care costs, fewer hospital admissions, and fewer emergency department visits than those enrolled in practices serving smaller proportions of high-need patients. Small practices—those with one or two physicians—exhibited lower overall spending for high-risk patients, though not lower utilization of services, compared with larger practices.
The Big Picture
The finding that practices with a large proportion of high-need patients had lower levels of spending was surprising given that these patients require more time, resources, and expertise to manage their conditions effectively. The authors suggest that practices treating more high-need patients might have structural advantages over other practices or specific approaches developed over time that position them to provide better care. “It may be that practices with a greater proportion of complex patients reach a ‘tipping point’ where they have gained the experience and economies of scale necessary to effectively target care processes to this population’s unique needs,” they write. As to why smaller practices and practices with more high-need patients had lower quality-of-care scores, the authors posit that the quality measures may have been targeted toward adherence to best care practices for healthy patients or those with only one health condition rather than capture the distinct care needs of more complex patients.
The study’s results have important policy implications. Efforts to direct high-need patients to specialized sites of care that serve a high proportion of these patients have shown early promise and could be bolstered with support from policymakers and payers. In addition, there is a consistent trend toward consolidation of primary care to large practices, but these results and others affirm the value of smaller practices. Policymakers should find ways to support and preserve small primary care practices across the country.
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HENRY KOTULA 