After a rollercoaster year of living with COVID-19, consumer confidence has returned—and remained largely stable during the winter surge of the pandemic, according to the latest data from a Healthgrades’ consumer attitudes and behavior survey.
The graphic above depicts Healthgrades’ “Consumer Comfort Index”, a measure based on survey questions that assess comfort in specific healthcare settings (e.g., visiting your primary care doctor) and “everyday activities” (e.g., going grocery shopping or dining inside a restaurant). The index reveals that consumers continue to feel more comfortable with in-person medical-related activities than most everyday activities, with 65 percent now feeling comfortable in healthcare settings—up from 40 percent last April. There are, however, some obvious “everyday” outliers: for example, people still feel more comfortable going to the grocery store than getting an in-office medical procedure.
A second survey, by Jarrard Phillips Cate & Hancock and Public Opinion Strategies, findsconsumers are much more willing to seek in-person medical care in the next six months as compared to last summer. Health systems and physicians should leverage this return of consumer confidence to reach out to patients who have delayed or missed screenings and other important care across the past year.
On Thursday, President Biden signed the American Rescue Plan (ARP) Act of 2021 into law, committing nearly$1.9T of federal spending to boost the nation’s recovery from the coronavirus pandemic. In addition to direct payments to American families, extension of unemployment benefits, several anti-poverty measures, and aid to state and local governments, the plan also contains several key healthcare measures.
Approved by Congress on a near party-line vote using the budget reconciliation process, the law includes thebroadest expansion of the 2010 Affordable Care Act (ACA) to date. It extends subsidies for upper-middle income individuals to purchase coverage on the Obamacare exchanges, caps premiumsfor those higher earners at a substantially lower level, and boosts subsidies for those at the lower end of the income scale.
The Congressional Budget Office (CBO) estimates that expanded ACA subsidies in the ARPwill result in 2.5M more Americans gaining coverage in the next two years. Fully subsidized COBRA coverage for workers who lost their jobs due to COVID is also extended through the end of September, which the CBO estimates will benefit an additional 2M unemployed Americans.
The ARP also puts in place new support for Medicaid, enhancing coverage for home-based care, maternity services, and COVID testing and vaccination, and providing new incentives for the 12 states which haven’t yet expanded Medicaid eligibility under the ACA to do so. In addition to the ACA’s 90 percent match for those states’ Medicaid expansion populations, the lucky dozen will also receive a 5 percent bump to federal matching for the rest of their Medicaid populations should they choose to expand.
Three policy changes of keen interest to providers were left out of the final version of the bill. First, while a special relief fund of $8.5B was created for rural providers, there was no additional allocation of relief funds for hospitals and other providers, similar to the $178B allocated by the CARES Act, despite initial proposals of up to $35B in additional funding. (Around $25B of the initial round of provider relief is still unspent.) Second, the ARPdid not extend or alter the repayment schedule for advance payments to providers made last year, in spite of industry pressure to implement more favorable repayment conditions. Finally, the new law does not extend last year’s pause on sequester-related cuts to Medicare reimbursement, although the House is expected to consider a separate measure to address that issue next week.
Notably, the coverage-related provisions of the ARP are only temporary, lasting through September of next year. That sets up the 2022 midterm elections as yet another campaign cycle dominated by promises to uphold and protect the Affordable Care Act—by then a 12-year-old law bolstered by this week’s COVID recovery legislation.
Many of the Center for Medicare and Medicaid Innovation’s value-based care payment models are undergoing a review, according to the Centers for Medicare & Medicaid Services (CMS).
The statement to Fierce Healthcare comes after CMS quietly updated and delayed several payment models, including pulling a controversial model that ties payments to geographic health outcomes.
“CMS remains steadfast in its commitment to transforming the healthcare system into one that rewards value and care coordination,” the agency said. “The CMS Innovation Center and its alternative payment models help execute that commitment.”
The agency added it hopes to design models that support the adoption of value-based care.
“Many of the CMS Innovation Center’s models are currently under review, and we look forward to providing updates when available,” CMS said.
CMS did not return a request for comment on how many models are under review or which ones are being scrutinized.
The statement comes after CMS has quietly updated the webpages for two payment models to note major changes. The agency made an update to the webpage for the Geographic Direct Contracting Model that said it was currently under review.
A request for applications for the model was posted Jan. 1, and the first performance period was expected to start in 2022 and run through 2024.
The model was intended to improve quality and lower costs for Medicare beneficiaries across a region, and providers in that region can enter into value-based payment arrangements.
Providers can build integrated relationships and invest in population health to better coordinate care, the agency said when the model was released last December.
But the model has gotten pushback from some provider groups. The National Association of Accountable Care Organizations has criticized the model, saying it could confuse patients who may not know whether they are participating in a direct contracting entity.
CMS also quietly pushed back the first performance period for the Kidney Care Choices model, which aims to improve the quality of dialysis care.
The model had an implementation period for 2020 that enabled participants to create the necessary infrastructure for the model, which aims to bundle care from treatment of chronic kidney disease all the way through kidney transplantation and post-transplant care.
Starting Jan. 1, 2021, providers were supposed to start taking on financial accountability including capitated payments.
But CMS posted an update on the webpage for the model, saying the start of the financial performance period will now be Jan. 1, 2022. The agency did not give a reason for the delay.
CMS’ review comes on the heels of a separate analysis conducted under the Trump administration on the value generated by the payment models. The analysis found bundled payment models that gave providers an amount of money for an entire episode of care had mixed results, while global budget models, which give providers a fixed amount for the total number of services given over a certain period of time, were given a more positive review.
It remains unclear whether that analysis is playing any role into the review undertaken by the Biden administration.
Ohio Attorney General Dave Yost has filed suit against Centene and several of its subsidiaries, alleging that they schemed to misrepresent pharmacy costs and gain overpayments from the state’s Medicaid program.
According to the lawsuit, Centene subsidiary Buckeye Health Plan used sister companies Envolve Health Solutions and Health Net Pharmacy Solutions to administer its pharmacy benefit. Yost’s office said it began to investigate their business practices as the arrangement “raised questions.”
In a statement, Yost’s office said the investigation, which was conducted by outside counsel, found that the companies filed reimbursement requests for amounts that had already been paid by third parties, and failed to accurately represent costs to the Ohio Department of Medicaid.
In addition, the scheme led to artificially inflated dispensing fees, the AG’s office said.
“Corporate greed has led Centene and its wholly-owned subsidiaries to fleece taxpayers out of millions. This conspiracy to obtain Medicaid payments through deceptive means stops now,” Yost said in a statement. “My office has worked tirelessly to untangle this complex scheme, and we are confident that Centene and its affiliates have materially breached their obligations both to the Department of Medicaid and the state of Ohio.”
Yost has openly declared war on PBMs and has made investigating their business practices a critical initiative within his office. In March 2019, the AG filed suit against Optum, seeking to reclaim $16 million in what he says are drug overcharges.
In a statement, Centene called the claims in the lawsuit “unfounded” and said it will “aggressively defend” against the allegations.
“Envolve’s pharmacy contracts with the State are reviewed and pre-approved by state agencies before they ever go into effect. Furthermore, these services saved millions of tax-payer dollars for Ohioans from market-based pharmaceutical pricing,” Centene said.
“We look forward to answering any of the Attorney General’s questions. Our company is committed to the highest levels of quality and transparency,” the insurer said.
On March 4th, the U.S. District Court for the District of Maryland struck down four provisions of the Trump Administration’s Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16930 (April 17, 2018) (the “Rule”), which governs many aspects of Affordable Care Act (“ACA”) insurance markets beginning in the 2019 plan year. The decision in City of Columbus, et al. v. Norris Cochran comes two and a half years after the cities of Columbus, Baltimore, Cincinnati, Chicago, and Philadelphia, as well as two individuals who rely on health insurance offered on ACA exchanges, filed suit alleging that the actions of the U.S. Department of Health and Human Services (“HHS”) drove up premiums, made enrollment more difficult, and caused more people to go without affordable, high-quality health insurance.
The plaintiffs originally filed suit against Donald J. Trump (in his official capacity as President of the United States) in August 2018, alleging that the Rule would eliminate protections guaranteed by the ACA, deter Americans from enrolling in quality health insurance plans, and drive up insurance costs. They further alleged that the Executive branch directed agencies to “sabotage” the ACA, committed various actions in an attempt to destabilize the exchanges, strategically worked to decrease enrollment, arbitrarily drove up premiums, and refused to defend the ACA. They claimed that these actions have caused premiums to rise and the number of uninsured to increase, harming the government plaintiffs by forcing them to spend more on uncompensated care. The complaint stated two causes of action, first under the Administrative Procedure Act (alleging that the Rule is arbitrary and capricious) and second under the Take Care Clause of the Constitution (U.S. Const. Art. II, § 3). The Court dismissed the Take Care claim in 2020.
In vacating four provisions of the Rule, the court held that HHS’s actions were either arbitrary and capricious or contrary to the ACA. The provisions of the Rule that were vacated by the court are:
Federal Review of Network Adequacy
The Rule’s removal of the federal government’s responsibility to ensure that insurance plans offer adequate provider networks was arbitrary and capricious.
Income Verification
The Rule’s requirement that low-income consumers submit additional documentation to verify their income when it conflicts with government data was arbitrary and capricious.
Standardized Options
The Rule’s elimination of “standardized options” — qualified health plans offering different levels of coverage and price, but with a standard cost-sharing structure specified by HHS that makes it easier for consumers to compare plans — was arbitrary and capricious.
Medical Loss Ratio
The Rule’s reduced medical loss ratio rebates was contrary to law. Plaintiffs argued that this provision made it easier for insurers to avoid paying legally required rebates to their customers.
The court also held that HHS acted appropriately and in compliance with the law with respect to provisions in the Rule that eliminate direct notices to taxpayers that they are in danger of losing tax credits that allow them to afford health insurance; do away with federal oversight of insurance brokers participating in direct enrollment; revise standards for “navigators” who help people find insurance on exchanges; change aspects of the small business exchange program; and limit review of insurance rate increases.The provisions relating to federal review of network adequacy, income verification and standardized options will now go back to HHS for further action. The MLR provision will not.
The Supreme Court announced Thursday it will no longer hear oral arguments later this month on an appeal over the controversial Medicaid work requirements program in New Hampshire and Arkansas.
Legal experts say the move likely means the case won’t be heard this term and possibly may not be heard at all, especially with the Biden administration signaling a different approach to work requirements.
“By taking the cases off the docket, the court is signaling that it won’t hear them this term and probably that it’ll never hear them at all,” University of Michigan Law Professor Nicholas Bagley told Fierce Healthcare.
A major question mark,though, is whether the court will vacate the decisions by several appellate courts that upheld lower court rulings that the programs should be struck down.
“If the Supreme Court is not going to vacate the D.C. Circuit ruling, that means the decision on the books is one that clearly explains why work requirements are not permitted under the Medicaid statute,” said Rachel Sachs, associate professor of law at Washington University, in an interview with Fierce Healthcare.
She added that it is unlikely for the case to come back and “extremely unlikely that this issue will return in the near future.”
The Biden administration asked the court back in February to cancel the oral arguments originally scheduled for March 29. The administration said in a filing that allowing the requirements to take effect won’t promote the objectives of Medicaid to extend health insurance to low-income people.
President Joe Biden’s Department of Justice called for the court to vacate judgments of appeals courts and remand the case back to the Department of Health and Human Services so it can finish a review of all the waivers.
Arkansas Attorney General Leslie Rutledge said in a statement back in February that the legal filing seeking the delay was a “politically motivated stunt designed to avoid a Supreme Court decision upholding a program that encourages personal responsibility while still providing healthcare coverage for those seeking gainful employment.”
Arkansas’ work requirements program was installed in 2018 and led to approximately 18,000 people losing Medicaid coverage before the program was struck down by a federal judge.
Appellate courts upheld judgments from lower courts that New Hampshire and Arkansas’ programs did not meet the objectives of the Medicaid program. The states appealed to the Supreme Court, which agreed to hear the cases late last year.
Court rulings have also struck down programs in other states including Kentucky and Michigan. Kentucky pulled its program in 2019 after a Democrat was elected governor.
Arkansas and New Hampshire’s attorneys general did not return requests for comment on the Supreme Court’s decision Thursday.
Ann Arbor-based Michigan Medicine will start construction on its $920 million hospital in the coming months, after delaying the project last year amid the COVID-19 pandemic, according to a March 8 health system update.
Michigan Medicine said its planning team has resumed design work on the facility.
The 12-story, 690,000-square-foot hospital is expected to house 264 private rooms, 20 operating rooms and three interventional radiology suites.
Citing a financial loss exacerbated by the COVID-19 pandemic, the academic health system delayed the project in May 2020.
With the delay, the new hospital is slated to open in the fall of 2025.
The following four health system credit rating downgrades occurred in the past three months. They are listed in alphabetical order.
1. Mercy Hospital(Iowa City, Iowa) — from “Ba3” to “B1” (Moody’s Investors Service) “The downgrade to B1 reflects the near term challenges that Mercy will face following the large operating loss in fiscal 2020, narrow headroom to the debt service covenant in fiscal 2020 and the pronounced December COVID surge, creating headwinds to retire to historical levels of stronger financial performance,” Moody’s said.
2.NYC Health + Hospitals — from “AA-” to “A+” (Fitch Ratings) “The downgrade of the NYCHCC bonds is tied to the downgrade of the city’s IDR to ‘AA-‘ from ‘AA’, and reflects Fitch’s expectation that the impact of the coronavirus and related containment measures will have a longer-lasting impact on New York’s economic growth than most other parts of the country,” Fitch said.
3. The Methodist Hospitals (Gary, Ind.) — from “BBB” to “BBB-” (Fitch Ratings) “The downgrade to ‘BBB-‘ is based on continued operating constraints after significant losses in 2017 through 2019. Interim nine-month fiscal 2020 operating income results, despite the pandemic, reflect an early stabilization trend but at weaker levels that are more consistent with the prior three years,” Fitch said.
4. Tower Health (West Reading, Pa.) — from “BB+” to “BB-” (S&P Global Ratings); from “BB+” to “B+” (Fitch Ratings) “The two-notch downgrade reflects our view of Tower Health’s continued significant operating losses through the interim period ended Dec. 31, 2020, which have been higher than expected, coupled with recent resignations of members of the senior management team,” said S&P Global Ratings credit analyst Anne Cosgrove.
The likelihood that U.S. hospitals will default on debt within the next year fell significantly since the 2020 peak amid the early days of the pandemic, according to a March 10 report from S&P Global Market Intelligence.
In 2020, the median default odds jumped to 8.1 percent. However, as of March 8, the probability of default rate fell to 0.9 percent.
Samuel Maizel, a partner from law firm Dentons, told S&P Global that many hospitals operate on razor-thin margins, and they are seeing less cash flow amid the pandemic as patients shy away from receiving care, but stimulus funds should help avert a tidal wave of hospital bankruptcies in the next year.
“They’re sitting on a lot of cash, which gives them a cushion, even though they’re continuing to lose money,” Mr. Maizel told S&P Global.
S&P said that as stimulus funds dry up other pressures may challenge healthcare facilities.
HENRY KOTULA 