Author Archives: henrykotula
Why Are at So Many Children Losing Medicaid/CHIP Coverage?
Along with the American Academy of Pediatrics, First Focus and Children’s Defense Fund, Georgetown University CCF held a press tele-conference and released a report examining an alarming trend in children’s health coverage. The report shows that more 800,000 fewer children had Medicaid/CHIP coverage at the end of 2018 compared to 2017. This trend comes amid broader efforts to restrict access to health coverage and discourage participation by legal immigrants.
The report found little evidence to support claims that the improving economy was responsible for the 2.2 percent decline in enrollment. Instead data suggest this 2018 could be the second year in a row that the rate of uninsured children increases. The U.S. Census Bureau will release the 2018 child uninsured rate data later in the fall.
Enrollment declines are concentrated in seven states – California, Florida, Illinois, Missouri, Ohio, Tennessee, and Texas – which account for nearly 70 percent of the losses. Nine states – Idaho, Illinois, Maine, Mississippi, Missouri, Ohio, Tennessee, Utah, and Wyoming – had decreases of more than double the national average.
Please listen to the recording of the press call or read the report for more details. Here a few excerpts from Thursday’s press conference:
Joan Alker of CCF moderated the call and explained why this drop in child enrollment is so alarming.
“We are extremely concerned about what we are seeing and what it portends for the uninsured numbers these fall,” she said. “For many years there’s been a national bipartisan commitment to reduce the number of uninsured children and the effort have borne fruit. Unfortunately, today we do not feel confident that this national commitment still exists.”
Tricia Brooks, lead author of the report, explained the many factors have likely led to the decline in child enrollment.
“Knowing that the economy had a minimal impact at best, we must call on state and national policymakers to address the factors contributing to the enrollment decline,” said Brooks. “From systems and renewal issues to enrollment barriers to threats like public charge, we must take a hard look at what these administrative actions and barriers to coverage mean for our kids’ health.”
Dr. Laura Guerra-Cardus, Deputy Director for the Children’s Defense Fund of Texas said overly cumbersome eligibility checks are causing thousands of eligible children to lose coverage in her state. Nine out of every 10 Texas children being dropped are losing coverage due to red-tape. She said this is causing significant confusion for families and throughout the Texas health care system as many families don’t learn their children are uninsured until they show up for an appointment with their health care provider.
“These income checks are erroneously flagging families – at the very least 30% of the time. Families are not being given enough time to respond,” she said. “They are given only ten days to respond and the timeline starts once flagged by the system which could be before the parents even receive notification.”
Bruce Lesley, President of First Focus, pointed out that bipartisan legislation in the U.S. Congress would address the issues raised by Dr. Guerra by requiring 12 months continuous health coverage for children. He also cited polls that show strong support for children’s health coverage in general.
“The American public is with us on this. Kids are a priority but we’re seeing a failure of policymakers to adhere to what voters want and make children a priority,” Lesley said.
Dr. Lanre Falusi, a pediatrician at the Children’s National Health System and national spokesperson for the American Academy of Pediatrics said pediatricians are very concerned about the decline in Medicaid and CHIP enrollment. In addition to cumbersome enrollment process and administrative burdens discouraging families from enrolling eligible children, she pointed out that immigrant families also encounter the chilling effect the proposed public charge rule.
“The public charge proposal presents immigrant families with an impossible choice: keep your family healthy but risk being separated or forgo vital services like Medicaid so your family can remain together in this country. Although the final rule has yet to be issued, the proposal has already caused immigrant families to avoid or even disenroll from programs they are eligible for out of fear, like Medicaid. I have seen this myself,” Dr. Falusi said.
“We need all children in the United States to reach their full potential if we are to reach ours as a nation. Ensuring children are enrolled in health coverage designed to meet their needs is necessary to making that possible. Our lawmakers must pass policies that keep programs like Medicaid and CHIP strong, not those that jeopardize the critical gains we’ve made in children’s coverage.”
Cartoon – Importance of Remembering
Bon Secours Mercy Health to sell majority stake of RCM to PE firm
Bon Secours Mercy Health plans to sell a majority stake of its revenue-cycle management subsidiary Ensemble Health Partners to private equity firm Golden Gate Capital, the organizations announced Thursday.
The Cincinnati-based Catholic health system aims to sell 51% of the equity in Ensemble netting $1.2 billion in cash proceeds, which will be reinvested in Bon Secours Mercy when the deal is completed following the standard regulatory approvals.
“Our bread and butter is not to be a revenue cycle management company, so we thought maybe it was time to spin it out as a private company,” said John Starcher, Bon Secours Mercy Health president and CEO, adding that Golden Gate has the capital and expertise to continue to build out Ensemble.
At that time, Mercy was coming off a failed revenue cycle outsourcing venture and an attempt to bring it in-house as its cost to collect, point of service collections and other metrics were trending negatively, resulting in a $135 million shortfall in expected cash collections, Starcher said.
Ensemble has helped Mercy Bon Secours accrue about $400 million to its bottom line over a three-year period, he said.
“Our terrible numbers had righted in less than one year,” Starcher said.
More providers are outsourcing their scheduling, billing and collections services as patients shoulder more of their healthcare costs and bad debt levels grow. Hospitals and health systems are turning to specialists that claim to deliver on patient satisfaction goals, which are poised to have a greater impact on reimbursement rates. Outsourcing also allows providers to free up capital and mitigate compliance risks.
“There is a tremendous amount of pricing and rate pressure on health systems,” said Judson Ivy, founder and CEO of Ensemble, adding that consumerism is another driving force behind outsourcing revenue cycle management as consumers seek a better experience. “There is also a talent drain on the industry.”
Meanwhile, alternative revenue sources are becoming a bigger part of hospital and health systems’ strategies. Ninety percent of hospital and health system executives in a recent survey indicated that new revenue streams were an urgent priority and expected to yield a return in the next three years, a study from Boston-based Partners HealthCare and healthcare private equity firm Fitzroy Health found.
Pressure on reimbursement rates from government and commercial payers have driven investment in revenue cycle subsidiaries, commercial real estate ventures, consulting spin offs, supply chain companies and other endeavors.
Bon Secours Mercy Health also has an IT subsidiary that specializes in Epic installations and a call center venture that manages the patient journey, among others, Starcher said.
“We also have expertise as we look across the continuum in marketing, supply chain and HR, and we think this is a burgeoning opportunity,” he said.
But you can’t monetize a mediocre service, Starcher said, offering a word of caution. A subsidiary can’t be so tethered to a health system that it can’t be priced competitively with other standalone companies, he said.
“While many health systems talk about this a lot, it doesn’t mean that it has been done successfully,” Starcher said.
Mercy Health and Bon Secours Health System completed their merger in September 2018, expanding its combined network to 43 hospitals, more than $8 billion in net operating revenue and 57,000 employees.
Over a four-month period following the merger, the health system reported $58.9 million in recurring operating income, which excludes restructuring and integration expenses, on operating revenue of $2.7 billion. With the $95.5 million of one-time costs, its operating income fell to negative $36.6 million. Those losses included an impairment charge on the now-defunct HealthSpan Partners’ investment in Summa and merger-related costs.
That compared to $72.9 million in recurring operating income on revenue of $2.69 billion over the same period the year prior. Operating income fell slightly to $68.2 million with $4.7 million of one-time expenses.
House committee to discuss DSH cut repeal next week
The House Energy and Commerce Committee next week will consider a full repeal of the Medicaid disproportionate share hospital cuts, a sign that hospitals are getting closer to securing the top lobbying priority for safety net providers and academic medical centers.
The committee will hold a hearing next Tuesday on proposed legislation from Rep. Eliot Engel (D-N.Y.), whose home state gets the single largest so-called Medicaid DSH allotment in the country. In fiscal 2018, New York received $1.8 billion of the roughly $12 billion in annual federal payments.
Engel has pitched a full repeal of the cuts mandated by the Affordable Care Act, which are set to take effect Oct. 1. Should those cuts move forward, they would reduce federal DSH payments to states by $4 billion in fiscal 2020 and $8 billion in fiscal 2021. An aide to Engel said that a full repeal “provides the long-term solution.”
Last week, 300 of the 435 U.S. House of Representatives lawmakers sent a letter to the chamber’s leadership urging a two-year delay to the DSH cuts, and hinted that some in Congress believe the Medicaid DSH formulas need to be reconfigured, calling for a “sustainable, permanent” solution.
“This delay will ensure that hospitals can continue to care for the most vulnerable in our communities,” the lawmakers wrote, led by Engel and Rep. Pete Olson (R-Texas).
The amount the federal government pays out for DSH varies enormously across states and is mostly arbitrary, reflecting the caps set by Congress in 1992 instead of a relevant benchmark.
Florida, where about 3.3 million people are uninsured, gets the exact same federal DSH allotment as Connecticut, where about 245,000 people are uninsured.
Finance Committee Chair Chuck Grassley (R-Iowa) has said he wants to see a reset. Sen. Marco Rubio (R-Fla.), whose state has a strong vested interest in a formula change, has used the Sept. 30 deadline to push a proposal that would base the federal dollar allotment on a particular state’s share of U.S. citizens living below the poverty level.
But the major trade groups representing DSH hospitals continue to push for a simple delay, since their constituents include hospitals in all the states. Dr. Bruce Siegel, CEO of America’s Essential Hospitals, said at a briefing to House staff earlier this month that he’d be open to a formula change as long as hospitals don’t see cuts to existing funding. That means Congress would have to allocate even more money to the program.
House Speaker Nancy Pelosi (D-Calif.) said she backed another delay when she addressed American Hospital Association’s annual meeting in April. She noted that she wouldn’t back a program overhaul.
“We cannot support efforts that will reward states for not expanding Medicaid or simply take DSH money from some other state and give it to others,” she said. “Who thought that was a good idea?”
The DSH debate doesn’t fall along the lines of which states expanded Medicaid or not. Alabama and Missouri haven’t expanded Medicaid but receive high federal DSH allotments, and would likely lose money if Congress decided to redistribute the existing payments.
Although the policy rationale behind the ACA-mandated cuts was that Medicaid expansion would shrink hospitals’ need for DSH money, high-DSH expansion states such as New York and New Jersey aren’t giving an inch.
Siegel framed the debate over expansion states’ need as being “a little more complicated now” than in the early years of the ACA.
“I think the market has changed in the last eight years or nine years when we started down the road of Medicaid expansion,” he said at the Capitol Hill staff briefing.
He pointed to the slight rise in the uninsured rate recently, as well as the increase of high-deductible plans that put more fiscal burden on enrollees.
“We are frankly concerned about any moves to move us toward skinny health plans,” he added.
Enrollment in more bare-bones commercial plans doesn’t really affect the Medicaid enrollment, but he argued that expansion still brings Medicaid shortfall — which is the difference between Medicaid and Medicare reimbursement.
“If you have 70% Medicaid patients which some of our hospitals do, you are in a terrible disadvantage in terms of payment streams, with the shortfall becoming enormous for you,” he said.
There is another Medicaid program that can help hospitals with shortfall: the “upper payment limit” supplement for Medicaid fee-for-service. States can deploy UPL payments to hospitals in order to increase their reimbursement based on rates Medicare would have paid for the same treatment.
UPL is the largest Medicaid supplemental funding program, with about $13 billion in annual spending according to the Medicaid and CHIP Payment and Access Commission data from fiscal 2017.
The UPL program is also under scrutiny by MACPAC, whose analysts found that 17 states have overspent billions of these payments.
Hospital Boards Seeing Low Turnover Rates, AHA Finds
Click to access aha-2019-governance-survey-report_v8-final.pdf
https://www.healthleadersmedia.com/strategy/hospital-boards-seeing-low-turnover-rates-aha-finds
A survey of hospital and health system CEOs noted opportunities for improvement in board governance, alongside some positive trends.
The boards of trustees governing U.S. hospitals and health systems have relatively low turnover rates in an industry that’s shifting rapidly, according to a survey report released Wednesday by the American Hospital Association.
The survey asked more than 1,300 CEOs of nonfederal community hospitals and health systems in the U.S. about their organizations’ governance structures and practices, then the AHA compared their responses to data collected in a similar survey five years ago.
The researchers found that the policies and norms in place for most healthcare organizations result in low levels of board turnover.
The report cited several related opportunities for improvement:
- Nearly a third of all respondents said their boards do not use term limits at all.
- More than 75% of respondents said their organizations either didn’t replace board members during their terms or kept reappointing them (when eligible) within the past three years, rather than recruiting a fresh face.
- Formal assessments were not conducted within the past three years for boards, board members, or chairpersons at 31% of respondent organizations.
- Older board members are increasingly common. Overall, 12% of board members were age 71 or older in 2018, up from 9% in 2005, the report states. The percentage of members age 50 or younger was 22% last year, down from 29% in 2005.
Luanne R. Stout, president of Stout Associates based in the Dallas/Fort Worth area and a retired Chief Governance Officer of Texas Health Resources, wrote in commentary included with the report that healthcare organizations have a number of options when trying to foster a healthy degree of board turnover.
“Term limits (usually three or four consecutive, three-year terms) are helpful in accomplishing board turnover; however, some boards are reluctant to adopt term limits for fear of losing highly valued board members,” Stout wrote. “Boards that annually review board member attendance, performance and contribution can achieve desired levels of rotation and competency enhancement without utilizing term limits.”
The AHA report also notes some positive trends around healthcare board governance, including the following:
- There has been some increase in racial and ethnic diversity among board members. The survey found 58% of respondents had boards with at least one non-white member, up from 53% in 2014. (That means about 42% of boards were still composed last year entirely of white members.)
- A majority of boards restructured to improve their governance.
- Nearly half of all system boards include members from outside the communities served.
“This year’s survey demonstrates how hospitals and health system boards are rising to meet tomorrow’s challenges through redefining roles, responsibilities and board structures,” said AHA President and CEO Rick Pollack in a statement. “These changes are not surprising given the continued transformation in where, how, when and from whom patients receive care.”
The hospitals staying silent on Medicare for All
Large hospital systems and trade groups have vociferously criticized Democrats’ “Medicare for All” proposals, but rural facilities and public hospitals that treat mostly low-income patients are sitting on the sidelines of the debate.
Why it matters: Safety nets and many rural hospitals could hypothetically benefit under Medicare for All, but expressing support would put them at odds with their larger brethren.
White House runs into health-care industry hostility as it plans executive order
President Trump is preparing to issue an executive order to foster greater price transparency across a broad swath of the health-care industry as consumer concerns about medical costs emerge as a major issue in the lead-up to next year’s presidential election.
The most far-reaching element favored by the White House aides developing the order would require insurers and hospitals to disclose for the first time the discounted rates they negotiate for services, according to health-care lobbyists and policy experts familiar with the deliberations.
The idea has stirred such intense industry opposition, however, that it may be dropped from the final version, the sources said.
Compelling disclosure of negotiated rates “would have the ultimate anti-competitive effect,” said Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy. “I know they are aware of the concerns.”
Other parts of the order are expected to make it easier for people on Medicare, the federal insurance program for older and disabled Americans, to find out what they would pay for treatment at various hospitals by widening the range of services for which hospitals must post their prices.
The order also may include an effort to promote more competition among hospitals by slowing a trend toward consolidation, according to an administration official who spoke on the condition of anonymity about details that continue to take shape.
“We’re still ironing it out,” the official said.
The executive order, likely to be announced by mid-June and first reported by the Wall Street Journal, would carry the force of law but not bring about immediate change. Such orders essentially direct federal agencies to rewrite rules to advance their goals — in this instance, the departments of Health and Human Services, Labor, and Justice, according to people familiar with the White House’s plans.
The order’s moving parts reflect a conservative conception of how to tame rising health-care costs, relying on competition — the idea that consumers will make prudent, price-minded choices if they are given enough information and options about where to get their care. Critics say that patients are seldom in a position to comparison-shop, following their doctors’ recommendations or confronting medical emergencies.
With surveys showing that voters trust Democrats significantly more than Republicans to solve problems in the health-care system, the order is, in part, a strategy by the White House to portray Trump as an ally of consumers for his reelection campaign.
“My understanding is they are trying to figure out what is going to have high splash value,” said Dan Mendelson, founder of Avalere Health, a Washington-based consulting firm.
The executive order would be Trump’s third relating to health care. Hours after his inauguration, he signed an order giving agencies broad powers to undo regulations the Obama administration had created under the Affordable Care Act. In October 2017, Trump signed another order intended to bypass rules under that law, by making it easier for individuals and small businesses to buy alternative insurance with lower prices, less coverage and fewer consumer protections.
Unlike the first two, the upcoming order would be the first on a theme embraced by both political parties.
Republicans and Democrats alike have introduced nearly two dozen bills related to transparency so far this year, and two major bills are in draft form. Most are focused on curbing the price of prescription drugs, and others are designed to protect patients from what have been termed “surprise” hospital bills involving treatment by physicians outside their insurance networks.
The administration official said the executive order would focus on urging hospitals to increase price transparency for consumers, but the official did not specify how far the policy will go.
The work is being directed by Joe Grogan, director of the White House’s Domestic Policy Council, although senior HHS officials are heavily involved, according to several people who have had conversations with those engaged in the process.
The hospital industry has been consulted by the White House, according to one industry lobbyist. But an insurance industry official said the White House has not reached out to health insurers and has “declined to discuss its thinking on an executive order when asked by industry representatives.”
Both hospitals and insurers are vehemently opposed to being told they need to disclose the rates that they negotiate with one another.
“There is good transparency and bad transparency,” said Kristine Grow, spokeswoman for America’s Health Insurance Plans, a main industry trade group. “Good transparency provides consumers with information they can use to make their own smart decision, and causes health-care prices to go down for everyone
“This is bad transparency, because it is highly likely to cause prices to go up for everyone,” Grow said. If all the parties need to expose what rates they were willing to accept, she said, “it creates a floor for negotiations, not a ceiling.”
Nickels of the American Hospital Association said, “In order for entities in any sector of the economy — health care included — to be able to create a situation where there is give and take, there has to be some privacy.”
Cartoon – A Decent Second-Family Man
Cartoon – Three Branches of Govt
HENRY KOTULA 