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Monthly Archives: April 2020
Cartoon – Morale Booster
US surpasses 1 million COVID-19 cases
https://thehill.com/policy/healthcare/494792-us-surpasses-1-million-covid-19-cases
More than a million people in the United States have tested positive for the coronavirus, a sobering milestone that experts say represents only the beginning of a months-long battle to end the pandemic.
The United States has now registered about a third of all confirmed cases of COVID-19 around the globe, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. More than 57,000 people have died in the United States, about a quarter of the known COVID-19 deaths around the globe.
The United States has now registered more confirmed cases than the next five countries suffering the largest outbreaks — Spain, Italy, France, Germany and the United Kingdom — combined.
Those numbers are partly a reflection of population, but there are troubling signs for the United States.
While those countries have reduced the pace of transmission and the growth in the number of new cases they are seeing on a daily basis, the United States has not similarly bent the curve.
Instead, it is stuck at a deadly plateau: In the last week, the U.S. has reported between 24,000 and 41,000 new cases a day, and between 1,200 and 2,600 deaths per day, according to The Covid Tracking Project, a group of researchers who keep tallies of case counts around the country.
Even as some states begin to relax orders that closed retail and service stores, experts warned the country is still at risk of a new rush of cases, and that the downslope of declining case counts will be much longer than the sudden surge the United States saw in April.
“We’re in the opening stages of this,” said Michael Osterholm, director of the Center for Infectious Disease Research and Prevention at the University of Minnesota. States “are not in the mountains, they’re in the foothills. The mountains are still to come.”
More than a quarter million residents of New York have tested positive for the virus, and commuter suburbs in New Jersey and Connecticut have reported tens of thousands of cases. More than 50,000 residents of Massachusetts have tested positive, and California, Illinois and Pennsylvania have all confirmed more than 40,000 cases.
There are growing signs that the virus is shifting into new, more rural territory. States like Arkansas, Kansas, Minnesota, Nebraska, New Mexico, Rhode Island, Tennessee and Virginia all recorded substantial growth in the number of new cases they had confirmed in the last few days.
That pattern of viral spread beginning in large urban cores and eventually making its way to rural areas is typical, experts said, given societal connections between urban areas, suburbs and more rural areas.
“Epidemiologists know that this pattern is a very expectable one, that rural areas are going to have lagged waves of cases. So we’ve been bracing for that,” said Nita Bharti, a biologist at the Center for Infectious Disease Dynamics at Penn State University. “What they’re experiencing now is what cities have been seeing. It’s the same, it’s just delayed, and we knew it would happen.”
About six months after the coronavirus outbreak was detected in Wuhan, China, and four months after the first case arrived on American shores, the United States still lags the world in testing capacity. States have bolstered their capacity in recent days, conducting more than 225,000 tests per day over four of the last five days, the capacity needed to ensure the virus can be brought under control lags substantially.
An analysis by Harvard researchers for the scientific publication STAT found more than half of states would have to significantly bolster their testing capacity in order to safely begin easing stay-at-home orders in May. The hardest-hit state, New York, will have to be able to test at least 100,000 more people every day than it is currently able to; New Jersey’s capacity would need to increase by 68,000 a day.
Smaller states and those that have yet to experience thousands of new cases — places like Mississippi, Idaho, Montana, Wyoming, Arizona and New Mexico — already have the testing capacity they need to identify and squelch any new viral hotspots. Even Washington state, the first state to confirm a positive case, has built its capacity to meet demand.
Public health experts say a robust testing program must be supplemented by armies of contact tracers who can track down those who are at risk of contracting the virus.
Already, Massachusetts has partnered with the nonprofit Partners In Health to deploy about 1,000 contact tracers across the state. Alaska has managed to trace the contacts of each of its 341 positive cases. New York City Mayor Bill de Blasio said Monday that the city would hire 1,000 contact tracers of its own, and former Mayor Mike Bloomberg has pledged $10 million to kick start a contact tracing program in the tri-state area.
On Monday, a bipartisan group of top public health experts led by President Trump‘s former FDA commissioner Scott Gottlieb and President Obama’s former Centers for Medicare and Medicaid Services administrator Andy Slavitt called on Congress to spend $46 billion to expand contact tracing capacity, including $12 billion to hire 180,000 new workers.
It is unclear how the outbreak in the United States compares with outbreaks in authoritarian countries like China, Russia and Iran, which do not report reliable numbers.
But even in the United States, where state and local governments are transparent about the data they collect, the actual number of cases and deaths are higher — likely significantly so. Early antibody tests in places like New York City and Miami show a significant number of people contract the virus without showing symptoms, and as studies show people who died inexplicably over the last several months tested positive for the virus.
Pennsylvania hospital to cease inpatient care
Crozer-Keystone Health System is shutting down inpatient care and non-emergency services at its hospital in Springfield, Pa., until June, according to the Delaware County Daily Times.
Springfield Hospital is temporarily shutting down services after seeing a significant decline in patient volume due to the COVID-19 pandemic and suspending elective surgeries.
Crozer-Keystone, a four-hospital system, is trying to find alternative assignments for staff affected by the changes, a spokesperson told the Delaware County Daily Times. If there’s a surge in COVID-19 patients, some employees may be called back to the 25-bed hospital to assist.
Springfield Hospital is experiencing many of the same issues as other hospitals in the state. A recent analysis by Health Management Associates revealed that even with an expected $3.1 billion in federal aid provided under the Coronavirus Aid, Relief and Economic Security Act, Pennsylvania hospitals could still lose about $7 billion this year, according to the report.
COVID-19 vulnerability: A state-by-state analysis
Every state in the U.S. will be affected by COVID-19, but some are more vulnerable due to limited ability to mitigate and treat the virus, and to reduce its economic and social impacts, according to a COVID-19 vulnerability index created by the Surgo Foundation.
The Surgo Foundation, a privately funded think tank, created an index that combines indicators specific to COVID-19 with the CDC’s social vulnerability index, which measures the expected negative impact of disasters of any type. The Surgo Foundation’s index takes into account factors that fall into one of several categories, including socioeconomic status, minority status, housing type, epidemiologic factors and health care system factors. Each state and the District of Columbia received a score in each category and an overall score, with a higher score indicating that the state is more vulnerable. Read more about the methodology here.
Here is each state’s ranking and composite score based on the vulnerability index:
1. Mississippi: 1
2. Louisiana: 0.98
3. Arkansas: 0.96
4. Oklahoma: 0.94
5. Alabama: 0.92
6. West Virginia: 0.9
7. New Mexico: 0.88
8. Nevada: 0.86
9. North Carolina: 0.84
10. South Carolina: 0.82
11. Kentucky: 0.8
12. Hawaii: 0.78
13. Tennessee: 0.76
14. Missouri: 0.74
15. Kansas: 0.72
16. Indiana: 0.7
17. Georgia: 0.68
18. Oregon: 0.66
19. District of Columbia: 0.64
20. New York: 0.62
21. Alaska: 0.6
22. Delaware: 0.58
23. Michigan: 0.56
24. Arizona: 0.54
25. Illinois: 0.52
26. Iowa: 0.5
27. Texas: 0.48
28. New Jersey: 0.46
29. Idaho: 0.44
30. Maryland: 0.42
31. Ohio: 0.4
32. Massachusetts: 0.38
33. Nebraska: 0.36
34. Florida: 0.34
35. Washington: 0.32
36. Connecticut: 0.3
37. Pennsylvania: 0.28
38. Montana: 0.26
39. Rhode Island: 0.24
40. Virginia: 0.22
41. South Dakota: 0.2
42. Utah: 0.18
43. Wyoming: 0.16
44. California: 0.14
45. Minnesota: 0.12
46. Colorado: 0.1
47. Wisconsin: 0.08
48. North Dakota: 0.06
49. Maine: 0.04
50. Vermont: 0.02
51. New Hampshire: 0
Healthcare CFOs weigh-in on the challenges ahead
https://www.pwc.com/us/en/library/covid-19/pwc-covid-19-cfo-pulse-survey.html
How finance leaders see a return to work
Business perspectives on what it will take to shift from crisis mode are solidifying. US finance leaders are focused on shoring up financial positions, as US businesses head into a period of even more operational complexity while they orchestrate a safe return to the workplace. Back-to-work playbooks put workforce health first, as companies set course for a phased-in return to the workplace that will not be uniform across the US or internationally, findings from the survey show. Returning employees and customers are going to experience a work environment that will differ in marked ways as a result. Another change likely to endure post-crisis is the strong role corporate leaders have taken within their communities, placing a renewed emphasis on environmental, social and governance (ESG) efforts going forward.
The actions CFOs are taking show how US businesses continue to adjust to very difficult current conditions with an eye toward an evolving post-COVID world. The level of concern related to the crisis is holding steady. It is high but stabilizing, with 72% of respondents reporting that COVID-19 has the potential for “significant impact” to their business operations vs. 74% two weeks ago.
Key findings
Back-to-work playbooks reshape how jobs performed
49% say remote work is here to stay for some roles, as companies plan to alternate crews and reconfigure worksites.
Protecting people top of mind
77% plan to change safety measures like testing, while 50% expect higher demand for enhanced sick leave and other policy protections.
Substantive impacts expected in 2020 results
Half of all respondents (53%) are projecting a decline of at least 10% in company revenue and/or profit this year.
Cost pressures intensify
A third (32%) expect layoffs to occur, as CFOs continue to target costs, while 70% consider deferring or canceling planned investments.
Economic events shaping CFO response last week
This survey, our fourth since emergency lockdowns took effect in the US, reflects the views of 305 US finance leaders during the week of April 20. It was a week when oil futures traded below $0 as energy markets confronted downshifting global demand, Congress replenished emergency funding of $480 billion for small firms and healthcare systems, and everyone heard the call to get ready to go back to work as the US and Europe firmed up plans to ease quarantines.
Post-crisis world taking shape in plans to reboot the workplace
Health and safety are top priorities for leaders as they prepare to bring people back to on-site work. More than three-quarters (77%) are putting new safety measures in place, while others are taking steps to promote physical distancing, such as reconfiguring workspaces (65%). Findings also show where the virus may have longer-lasting impact on ways of working. Half (49%) of companies say they’re planning to make remote work a permanent option for roles that allow. That’s even higher (60%) among financial services organizations.
Takeaways
Among the small percentage of companies that are beginning to bring people back, returning to work will not mean a return to normal. Companies should consider how to help frontline managers lead with empathy, to communicate transparently and make decisions quickly so employees understand where they stand, have access to the resources available to them, and can share feedback to ensure they feel safe and get what they need. Tools such as workforce location tracking and contact tracing can help support employees with suspected or confirmed infections, while also helping to identify the level of risk exposure. Companies looking to make remote work a permanent option will need to enable leaders to manage a blended workforce of on-site and remote workers during the next 12 to 18 months.
Given that many people may be wary of returning to on-site work, there’s an opportunity for companies to create more targeted benefits to help make the transition easier. Paid sick leaves and worker protections, help with childcare, private transportation to and from work, or other benefits could help employees who may need extra flexibility or who want additional support as they prepare to come back.
Forecasting substantive impacts on 2020 performance
A majority of respondents (80%) continue to expect a decline in revenues and/or profits in 2020. Projections by sector vary, with consumer markets likely the hardest hit: one-third (32%) of CFOs expect a 25% or greater decline in revenues and/or profits this year, compared to 24% of respondents in all sectors.
Takeaways
Outlooks for financial results have held relatively steady in the survey over the last month, and are probably indicative of actual impact. Companies have had the time to evaluate the effects. CFO projections for declining revenue and profits coincide with a widening realization that the US economy is in recession. Since mid-March, jobless claims have soared past 26 million, and Congress passed relief packages of $2.5 trillion. CFOs are evaluating a wide range of scenarios that cover the health situation, the shape of the economic recovery, the spillover into the financial markets, and the resulting impacts on their business. This crisis is setting a new benchmark standard for “unknowable.”
Cost pressures intensifying
CFOs are considering additional ways to scale back on planned investment and/or other fixed costs amid volatility in demand. A third (32%) expect layoffs to occur in the next month, up from 26% two weeks ago. Protecting cash and liquidity positions is paramount. Financial impacts of COVID-19, including effects on liquidity and capital resources, remain the top concern of CFOs (71%). Over half (56%) say they are changing company financing plans, up from 46% two weeks ago.
Among other actions, 43% plan to adjust guidance, which is consistent with responses two weeks ago. This figure will likely increase as companies go through the earnings season over the next two to three weeks. Separately, 91% of respondents are planning to include a discussion of COVID-19 in external reporting. Depending on the type of company, this can mean inclusion in financial statements and/or in risk factors and MD&A results of operations, earnings release or MD&A liquidity sections.
Takeaways
Many CFOs have focused on how they can manage their cash pressures to ride out the crisis. Common approaches have included stop-gap measures, such as hiring freezes and tightening controls on discretionary costs to put an end to travel and events, or the use of contractors. Findings show that these types of cost actions are likely to continue, and they remain at the top of the CFO agenda.
Of those who say they’re considering deferring or canceling planned investments, 80% are considering facilities and general capital expenditures. At the same time, investment programs in areas that are considered important to future growth — including digital transformations, customer experience, or cybersecurity and privacy — are less likely to be targeted. CFOs will increasingly look for ways to prioritize costs in these areas, as businesses grow more confident in recovery prospects — even though current demand is subdued.
Priorities to de-risk supply chains
As companies continue to wade through mitigation efforts and start to think about recovery, many are planning changes to make their supply chains more resilient. Findings show CFOs prioritizing specific actions: 56% cite developing alternate options for sourcing, and 54% say better understanding the financial and operational health of their suppliers.
Takeaways
Findings confirm an emphasis on de-risking supply chains, as companies prioritize the health and reliability of their supplier base among changes they’re planning as a result of COVID-19. In particular, there is a focus on managing risk around supply elements, such as reducing structural vulnerability with other sourcing options.
Some companies are starting to invest in creating data-backed profiles of their supplier base so they know where and when to look for second sources. Others are increasing communication with suppliers to better understand financial health. For many, conducting deeper financial and health reviews of suppliers will become a regular part of their business reviews. Physical supply chain relocations will likely happen only as a last resort, given the costs involved. However, automation of certain elements of the supply chain — to eliminate time-consuming manual tracking efforts and check tariff structures, for example — will likely become more common as companies seek better data to make more informed decisions.
Strategies yet to change, but tech likely to drive M&A
The impact of the outbreak on mergers and acquisitions (M&A) strategies remains mixed. While 40% of respondents say their company’s M&A strategy is not being affected by COVID-19, compared with 34% two weeks ago, one in five say it’s too difficult to assess what changes, if any, will need to be made to strategy. CFOs within the technology, media and telecommunications industry stand out in particular. They are less likely to report decreasing appetite for M&A due to COVID-19, compared with peers in other sectors, and 55% say the crisis hasn’t changed their M&A strategy.
Takeaways
These findings highlight the fundamental strengths of the tech sector and suggest it will be among those driving M&A in the months ahead. Tech giants, in particular, have large cash reserves. Moreover, demand for some tech products and services is strong as businesses return to work — 40% of CFOs say they will accelerate automation and new ways of working as they transition back. Additionally, technologies such as drones, artificial intelligence and robotics, will likely enjoy wider adoption in the post-COVID-19 environment. This leaves tech better-positioned to weather the pandemic’s economic fallout and to execute on inorganic growth strategies. M&A is likely to recover faster than the US economy, with tech among the cash and capital-rich sectors leading the charge. PwC studies show that a combination of factors has been driving a decoupling of deals from the broader economy.
Business recovery timeframes have extended
Organizations are realizing the business recovery from the impacts of the virus will take longer. The March measures of manufacturing and services activities show sharp drops. Demand is not only declining, it’s shifting. Moreover, even as some US states start to reopen, difficulties in setting up testing could keep some states in a holding pattern. As a result, for CFOs, the time required to return to “business as usual” the moment that COVID-19 ends continues to lengthen. Currently, 48% believe it will take at least three months to return to normal, up from 39% two weeks ago.
Takeaways
As reality sets in and companies understand the true impacts to their operations, CFO perceptions of the length of time to business recovery has extended. According to our analysis of how companies gauge their response to the crisis in PwC’s COVID-19 Navigator diagnostic tool, the expected impact of COVID-19 on businesses globally remains high, with consumer markets and manufacturing the most susceptible among industries. Put another way, businesses that are less reliant on a large, complex supply chain to deliver products, or are able to work relatively effectively while remote, are also likely to be among the least exposed.
Consumer-facing companies reconfigure physical sites as shutdowns start to lift
Companies in consumer-facing sectors continue to contend with both sides of the demand equation, as consumers sheltering in place focus single-mindedly on essential products to the exclusion of other offerings. Consumer markets (CM) CFOs are more likely to list a decrease in consumer confidence and spending as a top-three concern than they were two weeks ago (66% vs. 50%). For CM CFOs, consumer confidence trends translate almost directly to revenues, with 32% projecting an adverse impact on revenue and/or profit of at least 25% in 2020, compared with 24% of respondents across all industries.
In response, almost three-quarters of CM CFOs (73%) are considering deferring or canceling planned investments, targeting mostly general capital expenses, such as facilities. They also say technologies that can improve their understanding of changes in customer demand are a top-three priority as they plan changes to their supply chain strategies (41% vs. 30% for all sectors).
CM CFOs are planning workplace safety measures (86% vs. 77% for all sectors) and reconfiguring work sites to promote physical distancing as part of their transition back to on-site work (77% vs. 65% for all sectors). They recognize that consumers want the assurance of a safe physical environment above all else, especially because the majority of CM products and services require a physical component, despite the continuing shift to online.
Takeaways
Consumer-facing companies continue to be among the hardest hit, as the public health crisis keeps the majority of consumers confined to their homes for now. As they grapple with immediate challenges, CM companies are pulling back on capital investments. However, most are still planning to shore up their digital presence in response to accelerated online demand that could last well beyond the recovery period.
Health system pivots to new ways of working
What’s on the mind of financial leaders in the health industry? As they plan to bring more of their workforce back on-site, they are more likely than leaders in other industries to be leaning on technology to help them manage staffing uncertainties. Fifty-four percent of healthcare CFO respondents said they plan to accelerate automation and new ways of working, compared with an average of 40% across all industries.
Healthcare organizations are simultaneously solving two critical issues: uncertainty about demand and protecting their workforce. Health organization CFOs (70%) were more likely than executives from other industries (an average of 50%) to report that they expect higher demand for employee protections in the next month. Meanwhile, consumer anxiety over their own safety is driving up uncertainty about demand for healthcare and medical products. Forty-one percent of healthcare finance leaders listed tools to better understand customer demand as a top-three priority area when considering changes to their supply chain strategies, compared to 30% of financial leaders in all sectors. Fifty-one percent of healthcare finance leaders said they are making staffing changes as a result of slowed demand.
Takeaways
A survey conducted by PwC’s Health Research Institute in early April found that some consumers are delaying care and medications amid the pandemic. In this latest PwC survey of CFOs, healthcare leaders report uncertainty about how much of their business will return as the threat of the pandemic ebbs, making staffing decisions difficult.
As the nation continues to grapple with the pandemic, getting back to work is top of mind for US financial leaders overall, but this is an especially pressing issue for health leaders. They must plan for their own workforces, while dealing with an unfolding financial calamity — 81% expect their company’s revenue and/or profits to decline this year as a result of COVID-19. On par with other industries, they expect this decline, even though their organizations play central roles in addressing the human toll of the pandemic. One strategy is to use telehealth technology to virtually care for patients, thereby protecting patients and caregivers during the pandemic.
Financial firms see fewer layoffs, but slower recovery
Financial services (FS) CFOs are bracing for a longer road back to normal. About a third (35%) now think it could take six months to get back to business as usual, up sharply from 15% just two weeks ago. They’re also more optimistic about the bottom line. More than a quarter (27%) of FS survey respondents expect revenue and/or profits to fall by 10% or less. Across all industries, only 18% felt as confident.
Takeaways
Banks are playing a critical role in helping stabilize the economy, as they work on the front lines to distribute CARES Act provisions. Along with insurers and asset managers, they also rely heavily on workers with specialized technical and institutional knowledge. This may explain why FS CFOs expect fewer layoffs (15% vs. 32% overall) or furloughs (17% vs. 44% overall) over the next month. Now, they’re trying to focus on keeping workers healthy and safe.
Conversations are starting to shift toward when and how to transition back to physical offices. For some employees, work may look very different: More FS CFOs are considering making remote work a permanent option for roles that allow it (60% vs. 49% overall). To better protect their employees, they’re also looking to evaluate new tools to support workforce tracking and contact tracing (32% vs. 22% overall) as part of the return-to-work process.
Deeper insight into health of suppliers is top priority for industrial products
The industrial products (IP) sector is in full-throttle cost-cutting mode. Nearly all IP CFOs (96%) report considering cost containment measures, compared with 87% two weeks ago. Some of this comes in the form of layoffs: 49% of IP CFOs expect layoffs to occur vs. 36% two weeks ago. The longer the crisis lasts, the longer the impact on recovery times for their business. When asked how long it would take for their business to return to business as usual if the COVID-19 crisis were to end today, 15% of IP CFOs said less than one month, down from 25% two weeks ago.
Meanwhile, they’re closely examining challenged supply chains. When asked to list their top-three priority areas when planning changes to supply-chain strategies, 66% of IP CFOs identified understanding the financial and operational health of their suppliers, compared to 54% of CFOs across all industries. A majority (56%) also cited developing additional and alternate sourcing options as a priority. And the extent of the financial damage is sinking in: 65% of IP CFOs estimate 2020 revenues and/or profits will drop at least 10%.
Takeaways
IP CFOs are signaling they’re in the thick of the crisis, as they absorb historical lows in production, with March US industrial output plunging to levels not seen since the end of WWII. Continued cost actions are still in the cards.
IP finance leaders are looking ahead to get back to business, with some already bringing workers back on-site. Some are expecting changes to the workplace. Thirty-nine percent of IP CFOs are considering making remote work a permanent option for roles that allow, and 31% are considering accelerating automation and new ways of working. While these are still early days for US producers in returning to work, bringing millions of workers back into the fold may well usher in more change management than the industry now expects.
Tech, media and telecom well-positioned to power the recovery
Technology, media and telecommunications (TMT) companies are well-positioned for recovery from the initial blow of COVID-19. As they stabilize operations in response to the crisis, the percentage of TMT CFOs anticipating revenue and/or profit declines is down 19 percentage points from two weeks ago to 65%. The data suggest that TMT companies are preparing for a future in which virtual work options gain greater acceptance over traditional office settings. TMT companies are more likely to reduce their real estate footprint as they transition back to on-site work (38% compared to 26% for all sectors), and 55% say they’re planning to make remote work permanent for positions that allow.
Of those who said they’re considering deferring or canceling planned investments, TMT companies are less likely to reduce digital transformation investments (13%) than all sectors (22%). Their increased optimism about digital investment as they strategize for the future is further borne out by the data: Two weeks ago, of those who said they were deferring or canceling planned investment, TMT was on track to reduce digital investments at the same rate as other sectors (25%).
Takeaways
The resilience of TMT companies is evident in their approach to this crisis. Bolstered by robust liquidity, the majority of companies in the sector are looking ahead to a recovery they will power by using both organic growth and M&A. In the wake of a crisis that has accelerated more widespread virtual connectivity, look for new emerging-tech-enabled business models to take shape.
Where to focus next
COVID-19 has put businesses under enormous strain to drive new ways of working. When the pandemic began, many companies put their people’s health and safety at the center of their decision-making, and they appear to be doing the same as they prepare to ramp up business. With most firms expecting to bring people back on-site in phases, leaders will need to help employees adjust to a changed environment while still managing the well-being, engagement and productivity of all workers. Purpose-led communication will continue to be critical to keep people informed, and leaders should demonstrate empathy while helping employees adjust to what will likely be an extended transition period.
U.S. Supreme Court sides with insurers in battle over risk corridor payments
The Supreme Court sided with insurers in a years-long battle over billions in payments promised under the Affordable Care Act.
The nation’s highest court ruled (PDF) 8-1 on Monday that the ACA’s risk corridor program created an obligation for the federal government to pay health plans promised funds.
The insurers suing for damages sought $12 billion in unpaid funds from the program.
The ACA established the risk corridors to encourage health plans to participate in the exchanges. If an insurer earned massive profits through the individual market, the government would claim some of those funds and pay it out to insurers that are performing poorly.
The government did collect those funds, but did not pay out money to struggling insurers. The risk corridor program closed in 2016 after three years.
The justices argued that the government was compelled to make the payments.
“The plain terms of the risk corridors provision created an obligation neither contingent on nor limited by the availability of appropriations or other funds,” the court argued.
Justice Samuel Alito was the lone dissent in the case.
The justices also disputed the government’s argument that Congress implied a repeal of the risk corridors through appropriations riders. The justices said that any riders did not actually change the payment methodology or suggest the payments were not required.
The court also argued that the health plans had standing to sue under the Tucker Act.
“Petitioners clear each hurdle: The risk corridors statute is fairly interpreted as mandating compensation for damages, and neither exception to the Tucker Act applies,” the court said.
In his dissent, Alito blasts the opinion as a bailout for health plans.
America’s Health Insurance Plans CEO Matt Eyles praised the ruling in a statement.
“The federal government made a clear commitment in the interest of building stable markets and making coverage more affordable for individuals and small employers,” Eyles said. “Health insurance providers kept their commitments while incurring substantial losses.”
“Today’s decision, as the Supreme Court observes, reflects ‘a principle as old as the Nation itself: The Government should honor its obligations,’” he added. “We appreciate that today’s Supreme Court 8-1 decision ensures that the federal government honors the obligations it made for services the private sector already delivered.”
CMS suspends advance payments to providers, is reevaluating accelerated payments for hospitals
The Trump administration is suspending a program that offered advanced payments to providers and reevaluating another program that offered accelerated payments to health systems after doling out about $100 billion.
The Centers for Medicare & Medicaid Services (CMS) announced over the weekend it is immediately suspending its Advance Payment Program to Medicare Part B suppliers such as doctors, non-physician practitioners and durable medical equipment suppliers.
The agency is reevaluating the amounts that will be paid under its Accelerated Payment Program, which have been made available to fee-for-service Medicare providers such as hospitals in light of the $100 billion already sent to providers through the program.
CMS had expanded the loan programs to ensure providers and suppliers had resources needed to combat COVID-19 as many began furloughing or laying off workers due to sharp revenue drops from elective care amid the COVID-19 response.
CMS approved more than 24,000 applications under the program and advanced more than $40 billion to Part B suppliers in the last several weeks. It approved 21,000 applications for accelerated payments, totaling nearly $60 billion in payments to hospitals.
Prior to COVID-19, the agency had only approved just over 100 of such requests.
The advanced and accelerated payments are not grants, but instead payments that are required to be paid back within one year, officials said.
In a release, CMS officials said the actions are also being taken “in light of the $175 billion recently appropriated for healthcare provider relief payments,” the agency said, referring to $100 billion allocated in the CARES Act as well as $75 billion allocated to providers through the Paycheck Protection Program and Health Care Enhancement Act.
The Department of Health and Human Services is distributing that money through the Provider Relief Fund. Those funds will be used to support healthcare-related expenses or lost revenue attributable to the COVID-19 pandemic and to ensure uninsured Americans can get treatment for COVID-19, officials said.
Among the recipients of the funding, HCA Healthcare said it benefited from about $4 billion in accelerated Medicare payments provided under the CARES Act, saying that money will be repaid over an eight-month period beginning in August. HCA also received about $700 million of funds from the first phase of the public health and social services emergency fund.
Those two pieces of economic assistance have had the greatest impact in stabilizing the health system’s financials amid challenges presented by COVID-19, HCA officials said during a recent conference call with analysts.
Cartoon – Your Services will no Longer be Required
Cartoon – The Burden of Exposition
HENRY KOTULA 