Monthly Archives: March 2018

Knock it off, Idaho. (But carry on, Idaho.)

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Knock it off, Idaho. (But carry on, Idaho.)

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Credit where credit is due: the Trump administration announced yesterday that it won’t look the other way if Idaho flouts the Affordable Care Act. The ACA “remains the law and we have a duty to enforce and uphold the law,” CMS administrator Seema Verma explained in a letter to Idaho’s governor and its insurance director.

Maybe it’s a mark of how low we’ve sunk that I’m surprised, happy, and relieved to see the Trump administration acknowledge that the law is the law. But politics ain’t beanbag, and Azar and Verma were under immense pressure to allow Idaho to regulate its health insurers without regard to the ACA. That they chose to push back is a testament to their integrity.

Not that the ACA is out of the woods. In her letter, Verma notes that HHS has issued a proposed rule to allow for the sale of short-term health plans that would offer coverage for up to 364 days in a year. By statute, “short-term, limited duration insurance” are exempted from the ACA’s rules. If the rule is finalized, Verma believes that Idaho could allow for the sale of exactly the same noncompliant plans, so long as those plans trim their coverage by one day. Idaho can’t ignore the ACA, but it can bypass it.

Can this be right, though? Can it really be against the law to sell a noncompliant health plan that offers coverage for the whole year, but completely OK to sell the exact same plan if it covers someone for the whole year less one day?

I’m skeptical. Health insurance is typically sold on a one-year basis. If 365 days is the relevant baseline, how can you say with a straight face that a 364-day plan is “short term limited duration insurance”? The statute doesn’t define the term, which means that HHS has some discretion to set a standard. But HHS doesn’t have the discretion to interpret the exception to swallow the rule.

Not only does HHS’s proposed interpretation do violence to the language of the statute. Verma’s letter stands as a tacit acknowledgment that Idaho can achieve its goal of subverting the ACA by exploiting a loophole for short-term plans. How can the agency claim that it’s being faithful to the statutory plan if its interpretation would countenance such flagrant disregard of the law?

The best argument I’ve heard in defense of HHS’s proposal is that it would simply restore a rule that was on the books for twenty years before the Obama administration decided, in 2016, to clamp down and limit “short-term, limited duration insurance” to three months. That argument does give me pause: an agency interpretation of longstanding vintage is entitled to some respect.

But the courts have no problem striking down old rules if they’re inconsistent with statutory text. And, for my part, I’m struggling to understand how a plan that’s 0.27% shorter than a typical insurance plan can possibly count as “short-term limited duration insurance.”

 

Tenet eliminates poison pill, adopts governance changes

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https://www.beckershospitalreview.com/finance/tenet-eliminates-poison-pill-adopts-governance-changes.html

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Dallas-based Tenet Healthcare announced March 5 that its board of directors has approved several changes to the company’s corporate governance.

Here are five things to know about the changes.

1. The board approved changes to Tenet’s bylaws that allow shareholders with a 25 percent stake in the company to request a special meeting. The move comes after the board approved amendments to the company’s bylaws in January that allowed majority shareholders to request special meetings.

2. Tenet approved a short-term shareholder rights plan in August 2017, which was designed to protect $1.7 billion in net operating loss carryforwards and ensure the board could protect all shareholder interests as it executed CEO and board changes. Under the poison pill, if any person or entity acquired 4.9 percent or more of Tenet stock, all holders of rights issued under the plan are entitled to acquire shares of common stock with a 50 percent discount.

3. Tenet terminated the poison pill March 5. “The board made this decision based upon the reduced value of the NOL shareholder rights plan following recent tax law changes and an increase in the company’s stock price since the NOL shareholder rights plan was adopted, as well as shareholder feedback,” Tenet said in a statement. The poison pill was originally slated to expire following Tenet’s 2018 annual meeting of stockholders, which is typically held in May.

4. Tenet announced March 5 that it also eliminated the executive committee as a standing committee of the company’s board of directors.

5. “The board of directors and management have spent considerable time in recent weeks engaging with shareholders representing a majority of our outstanding stock and we received constructive input regarding Tenet and our objective to lead with best corporate governance practices,” said Ronald A. Rittenmeyer, executive chairman and CEO of Tenet. “We believe the actions which we are taking today demonstrate our continued commitment to being responsive in a timely manner to shareholder feedback and to implementing measures that increase transparency and accountability.”

 

Moody’s: Nonprofit hospital rating downgrades rose sharply in 2017

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https://www.beckershospitalreview.com/finance/moody-s-nonprofit-hospital-rating-downgrades-rose-sharply-in-2017.html

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Despite a strong economy and low uninsured population, nonprofit hospital rating downgrades sharply outpaced upgrades throughout 2017 — creating a downgrade-to-upgrade ratio of 3.4 to 1.0, which is more than double the 2016 ratio of 1.5 to 1.0, according to a new report by Moody’s Investors Service.

In 2017, there were 41 credit downgrades and 12 credit upgrades for nonprofit hospitals, compared to 32 credit downgrades and 21 credit upgrades in 2016.

Moody’s attributed the credit stress in 2017 to rising labor and supply costs coupled with a low revenue growth environment.

“An acute nursing shortage in many markets, along with rising supply and pharmaceutical costs, resulted in expense growth outpacing revenue growth for many hospitals and health systems,” the Moody’s report reads.

While hospitals of all sizes were downgraded, 60 percent of the downgrades in 2017 affected smaller health systems with less than $1 billion in total operating revenue. In addition, 12 of the downgrades occurred in Pennsylvania and Ohio, reflecting the lagging economy, aging demographics, competitive service area and commercial payer challenges in the Rust Belt area.

Although downgrades outpaced upgrades in 2017, Moody’s affirmed the vast majority of ratings in 2017, which is in line with historical trends.

18k Kaiser nurses vote for option to strike at California facilities

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https://www.beckershospitalreview.com/human-capital-and-risk/18k-kaiser-nurses-vote-for-option-to-strike-at-california-facilities.html

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Tens of thousands unionized registered nurses at facilities owned by Oakland, Calif.-based Kaiser Permanente voted for the option to call a strike if an agreement is not reached on issues such as staffing and patient care, according to a California Nurses Association news release.

The CNA — which represents 18,000 RNs who work at more than 20 Kaiser Permanente medical centers and dozens of medical clinics and office buildings in California — said nurses are calling on the healthcare giant to improve patient care standards.

“With this vote nurses are making it absolutely clear: We are ready to strike to make sure our patients get safe care,” said Zenei Cortez, a South San Francisco Kaiser Permanente RN and co-president of CNA.

Union officials said nurses specifically are calling on Kaiser Permanente to support their proposals regarding staffing and patient care standards. These include bringing in a charge nurse on each unit, as well as resource nurses to assist other nurses so they are able to take breaks. The union said nurses also propose “interventions with pharmacy to expedite patients receiving correct medications,” and “increased staffing when needed due to emergent conditions and heightened patient volume.”

Additionally, the CNA said nurses are opposed to Kaiser Permanente’s proposal to move from the existing GRASP patient classification system to Epic Acuity, which nurses contend is less transparent. Nurses are also opposed to what they said are Kaiser Permanente’s plans to cut pay for new hires by 10 percent in the Sacramento region, and 20 percent in Fresno and the Central Valley.

Regarding the union’s claims about staffing, Debora Catsavas, senior vice president of human resources for Kaiser Permanente Northern California, said in a statement: “Our nurse staffing meets, and often exceeds, state-mandated staffing as necessary for patients, based on the complexity of their medical conditions. We employ more than 18,000 nurses, and have hired more than 2,000 nurses in multiple key specialty areas over the last three years, and continue to hire more as needed.”

As far as the move to Epic Acuity, Ms. Catsavas said the move addresses various issues nurses have raised about the existing GRASP patient classification system.

“GRASP is a system from the 1980s based on studies of nursing work flows conducted nearly 50 years ago. Epic Acuity is an up-to-date, comprehensive system that directly reflects the care provided and allows nurses to spend more time at the bedside,” her statement reads. “Epic Acuity uses clinical information directly inputted by the nurses into our electronic medical record.”

She said Kaiser Permanente also offered nurse representatives paid time to talk about and review Epic Acuity’s implementation.

Furthermore, Ms. Catsavas said there are no proposed wage cuts or wage reductions for current nurses. However, she said Kaiser Permanente last October proposed a new wage scale for new nurses hired in the Sacramento, Central Valley and Fresno areas on or after Jan. 1, 2019, “to more closely align with the lower cost of living in these markets.”

She noted Kaiser Permanente nurses in Sacramento, the Central Valley and Fresno earn 24 percent, 37 percent and 45 percent more than non-Kaiser Permanente nurses, respectively.

While the Kaiser Permanente nurses have authorized a potential strike, no strike date is set. For a strike to occur, nurses would have to provide at least 10 days notice.

Ms. Catsavas said Kaiser Permanente anticipated a strike authorization might occur but believes an agreement is within reach.

 

 

White House pitch to bolster Obamacare includes tough trade-offs for Democrats

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https://www.politico.com/story/2018/03/06/obamacare-democrats-white-house-insurance-stable-388816

The White House is pictured. | Getty

The White House is seeking a package of conservative policy concessions — some of which are certain to antagonize Democrats — in return for backing a legislative package bolstering Obamacare markets, according to a document obtained by POLITICO.

The document indicates the administration will support congressional efforts to prop up the wobbly marketplaces, in exchange for significantly expanding short-term health plans and loosening other insurance regulations.

The document also makes severalreferences to abortion language that will be problematic for Democrats. A potential stumbling block in passing any stabilization package is whether conservatives will insist on including language prohibiting the use of government dollars to pay for abortions.

“Although congressional efforts to provide taxpayer money to prop up the exchanges is understandable, any such efforts must also provide relief to middle-class families harmed by the law and protect life,” the document states.

The source of the document provided to POLITICO isn’t identified and it isn’t dated. The White House declined to comment on the document but didn’t question its authenticity. A spokesperson for HHS said the department does not comment on leaked documents.

Two health policy experts who have been in contact with White House officials indicated that the document is consistent with ideas the administration has discussed for creating more stability and flexibility in the insurance markets.

“It’s legit,” said one former White House policy official.

Republican and Democratic lawmakers have been in delicate negotiations over a stabilization package that could clear the House and Senate. Democrats want to bolster the federal health care law after Republicans failed in their efforts to repeal it last year.

The list of White House policy requests includes allowing insurers to charge older enrollees up to five times as much as their younger counterparts, as opposed to the current three-to-one cap. That policy would require amending the Affordable Care Act.

The White House is also seeking to allow short-term plans — which offer skimpier benefits with lower premiums — to be renewed. Short-term plans, exempt from Obamacare rules, can deny people coverage or charge them more based on a health condition, in a process known as underwriting. The Trump administration recently proposed expanding the maximum length of these plans from three months to one year. However, the White House document envisions allowing people to renew this coverage “without those individuals going through health underwriting.”

The document doesn’t include support for reinsurance, which insurers have been pushing to shield them from the costs of particularly expensive customers.

The document also reiterates that the administration supports funding for cost-sharing reduction payments, which Trump cut off in October. The president’s budget proposal including funding for the payments, which help insurers reduce out-of-pocket costs for low-income Obamacare customers.

There is at least one item on the White House list that could garner bipartisan support: Expanding the use of health savings accounts. Last week, a bipartisan group of House members introduced a package of potential changes, and business groups have been pushing for HSA proposals to be part of the appropriations package Congress must pass by March 23.

Republicans fear another year of eye-popping premium increases will hit voters just before Election Day — and that they’ll get the blame this time since they’re now in charge.

But the White House asks could further unsettle those talks. In particular, the emphasis on abortion language tripped up earlier negotiations.

Democrats have been seeking a very different list of policies to boost the markets. They want to increase the subsidies provided to Obamacare customers, reinstate funding for outreach and marketing, and prevent the executive branch from expanding the availability of what they deride as “junk” insurance plans.

“People nationwide are looking at higher premiums and out-of-pocket costs as a direct result of the damage President Trump has done on health care,” said Sen. Patty Murray (D-Wash.), who has been in the middle of negotiations over a stabilization package, in a statement to POLITICO. “I certainly hope the president and Republican leaders won’t once again sabotage an opportunity to undo some of the damage they’ve done by choosing to play politics with women’s health and making last-minute, harmful demands that would raise families’ costs even more and place an age tax on seniors.”