Category Archives: 2020 Election Issues

Kansas has reached a deal to expand Medicaid, covering 150,000 people

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https://www.vox.com/policy-and-politics/2020/1/9/21058531/kansas-medicaid-expansion-obamacare-trump

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It looks like Kansas will become the 37th state to expand Medicaid through the Affordable Care Act, the latest breakthrough in more conservative territory for the health care law.

Democratic Gov. Laura Kelly, a moderate elected in 2018 in the anti-Trump wave driven largely by health care, and Sen. Jim Denning, the Republican leader of the state Senate announced Thursday that they had reached a deal on Medicaid expansion.

Under Obamacare, states can expand coverage to anybody with an income 138 percent of the federal poverty level or less (about $17,000 for an individual or $29,000 for a family of three) and receive a generous federal funding match.

Between 130,000 and 150,000 people are expected to be covered by Medicaid expansion in Kansas, mostly adults without children or parents currently ineligible for benefits despite living in or near poverty. Roughly 9 percent of Kansans are uninsured.

According to the AP, the agreement between Kelly and Denning includes a provision for state support to reduce private insurance premiums, to prevent people eligible for Medicaid expansion from leaving their current private plan (if they have one) to join the public program:

Denning had proposed financing his new program by increasing tobacco taxes, including a $1-per-pack increase in the state’s cigarette tax, to $2.29. His compromise with Kelly gives the state a year to develop the premium-reduction program and drops the tax increase, which Kelly and many lawmakers thought wasn’t likely to pass anyway.

It’s a relatively small concession for Republican support. An estimated 50,000 people would be expected to make the switch. The compromise notably does not include work requirements, which some other GOP-led states have sought (though they are on hold in the courts) as a condition of expansion. There will also be small premiums (about $25 a month), a provision approved in other Republican-leaning states looking to expand.

In some ways, Medicaid expansion has proven the most important part of Obamacare, covering 20 million or so people, but it has yet to reach its full potential. That’s because the Supreme Court ruled in 2012 that states must have the option to refuse to expand the program, and many Republican-led states have. About 2.5 million people, half of them in Texas and Florida, don’t have health coverage because their state has blocked Medicaid expansion.

But the number of non-expanding states has shrunk over the years, with a number of Republican states unable to refuse the ACA’s deal of more federal funding and more people with insurance. Even Vice President Mike Pence had cut a deal as governor with President Obama to expand Medicaid in Indiana. Voters in Idaho, Nebraska, and Utah have approved Medicaid expansion at the ballot box in the last few years.

Now Kansas looks like it will join the expansion ranks. Previous attempts to expand Medicaid ran up against the veto pen of a GOP governor. But Kelly’s election changed the situation.

Its decision is also a small act of defiance: Even as 20 red states and the Trump administration fight to overturn Obamacare in the courts, government leaders in Kansas are pushing to expand the law’s reach in their state to cover more people. Though the ideological battle over the law isn’t totally over, in practice, its reach is only growing.

 

 

 

The most expensive health care option of all? Do nothing.

Posted on by • Posted in 2020 Election Issues, ACA, Aging Population, Antitrust, Center for Medicare and Medicaid Services (CMS), Centers for Disease Control & Prevention (CDC), Health Insurance Coverage Adequacy, Health Policy, Life Expectancy, Medicaid, Medicaid Expansion, Medicare, Medicare for All, Monopoly, Monopoly Behavior, Mortality, Opioid Epidemic, Out of Pocket Expenses, Status Quo, Underinsured, Uninsured • Leave a comment

https://www.politico.com/news/2020/01/09/medicare-for-all-health-care-096367?utm_source=The+Fiscal+Times&utm_campaign=b67cf54986-EMAIL_CAMPAIGN_2020_01_09_10_31&utm_medium=email&utm_term=0_714147a9cf-b67cf54986-390702969

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‘Medicare for all’ debate sidesteps cost of current system.

The projected multitrillion-dollar cost of “Medicare for All” has pitted Democratic presidential candidates against each other as they argue about the feasibility of single-payer health care.

But the reality is the current health system may cost trillions more in the long run and be less effective in saving lives.

Spending on Medicare, Medicaid, private health insurance and out-of-pocket expenses is projected to hit $6 trillion a year — and $52 trillion over the next decade. At the same time, the number of people with insurance is dropping and Americans are dying younger.

Sen. Bernie Sanders and other single-payer advocates say Medicare for All would cost the government far less — between $20 trillion and $36 trillion over a decade — by slashing overhead, eliminating out-of-pocket costs and empowering federal officials to bargain directly with hospitals and drugmakers. But the streamlined system would have to care for millions of currently uninsured people at a significant cost to taxpayers, and experts disagree whether it would actually save money in the long run.

Centrist Democrats are pushing narrower plans that would, among other things, expand tax credits for people just above the Obamacare subsidy threshold. Virtually no one is arguing for maintaining the status quo, but that’s precisely what could happen given that congressional gridlock has stymied even popular, and bipartisan, causes like halting surprise medical bills.

“It’s really hard to see anything breaking through, especially when the industry interests and the money they’re willing to spend on lobbying and campaign contributions is just mind-boggling,” said Sabrina Corlette, a researcher at Georgetown University’s Center on Health Insurance Reforms. “And, without question, we are on an unsustainable trajectory.”

With Medicare for All and its price tag likely to come up in the next Democratic debate Jan. 14 in Iowa, here are five of the costliest consequences of inaction:

National health spending keeps rising

The Centers for Medicare and Medicaid Services estimates that nationwide health spending will hit $6 trillion a year by 2027 absent any changes in law. That would be nearly a fifth of the economy. In total, the United States is slated to spend about $52 trillion over the coming decade.

The cost drivers include hospitals, physician and clinical services and prescription drugs. Some local health systems have become monopolies that can largely set prices as they please — leading to higher premiums and more out-of-pocket spending for consumers.

“Even the biggest insurance plans are not big enough to bargain down the cost of services, and they don’t have an incentive to,” said Wendell Potter, a former Cigna executive-turned whistleblower and single-payer advocate.

An aging population is driving up Medicare spending, but the rising cost of private insurance is the biggest factor. A recent Kaiser Family Foundation analysis found per capita spending for private insurance grew by nearly 53 percent over the last decade, or more than double the hike in per capita Medicare spending.

More people will be uninsured

The Census Bureau reported in September that the number of Americans without insurance grew by 2 million people since 2017 — the first increase in nearly a decade. Even with a healthy economy and low unemployment, more than 27 million people weren’t covered at any point last year. That could grow to 35 million by 2029, per the Congressional Budget Office, under current law.

The number of people enrolling in the Obamacare marketplace has declined, and more people are dropping employer-sponsored insurance due to cost and other concerns.

Part of this is President Donald Trump’s doing — the administration has slashed efforts to push Obamacare enrollment and rolled back the massive marketing effort that the Obama administration rolled out for years.

There are also more than 400,000 additional uninsured children than just two years ago — and 4 million in all — and states that haven’t expanded Medicaid are seeing the biggest spikes.

“What we also miss in the debate is the number of people temporarily uninsured, who miss open enrollment, who are between jobs, who fall through the cracks,” said Adam Gaffney, a Harvard Medical School researcher and the president of Physicians for a National Health Program. “I see people all the time in my practice in that situation who don’t fill prescriptions and experience serious complications.”

Going without insurance hits patients and health care providers: Average hospital spending on care for the uninsured was $13 million in 2018 up roughly 3 percent annually since 2016.

Coverage will be skimpier

As the cost of health care has skyrocketed, insurance companies have squeezed patients, charging higher premiums, deductibles and co-pays, and creating narrow networks of providers and aggressively billing for out-of-network care.

Since 2009, the amount workers have had to pay for health insurance has increased 71 percent, while wages have only risen 26 percent over that time.

More than 80 percent of workers now have to pay a minimum amount out of pocket before insurance kicks in — and the amount of that deductible has doubled over the last 10 years, now standing at an average of $1,655, though many workers have to pay a lot more.

These costs are putting care out of reach for millions.

A new Gallup poll found that a full quarter of adults have put off treatment for a serious medical condition due to the cost — the highest since Gallup began asking the question three decades ago. A full third say they’ve delayed or deferred some kind of health care service over the past year. Another Gallup and West Help survey found that 34 million people know at least one friend or family member who died over the past five years after skipping treatment due to costs.

 

Needed drugs will become more out of reach

U.S. patients pay vastly more for prescription drugs than people in other developed countries and the disparity is set to grow. The United States spent $1,443 per person on prescription drugs in 2018, while other developed countries fell somewhere between $466 and $939.

In just five years, national spending on prescription drugs increased 25 percent, according to the Government Accountability Office, and CMS expects that increase to “accelerate” over the next several years.

Increasingly, patients are responding by forgoing their medications. Gallup found in November that nearly 23 percent of adults — roughly 58 million people — said they haven’t been able to “pay for needed medicine or drugs that a doctor prescribed” over the past year.

This widespread inability to take needed medication, a government-funded study found last year, is responsible for as much as 10 percent of hospital admissions. And the Centers for Disease Control and Prevention estimates that medication nonadherence accounts for somewhere between $100 and $300 billion in national health spending every year.

 

Americans will continue to get sicker and die younger

The cost of maintaining the status quo is evident not only in dollars but in human lives.

Life expectancy in the United States has declined over the last three years, even as other developed countries around the world saw improvements.

Though the United States spends nearly twice as much on health care as other high-income countries, there’s been a stark increase in mortality between the ages of 19 and 64, with drug overdoses, alcohol abuse, suicide and organ diseases driving the trend. It’s cut across race and gender with the worst effects felt in rural areas.

The opioid epidemic only accounts for a fraction of the problem. The National Research Council found that the United States has higher mortality rates from most major causes of death than 16 other high-income countries.

Researchers at USC estimate that if these trends continue, it would take the United States more than a century to reach the average life expectancy levels other countries hit in 2016.

 

 

2020 drug price increases unlikely to change policy

Posted on by • Posted in 2020 Election Issues, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, Out of Pocket Expenses, Pharmaceutical Industry, Prescription Drugs • Leave a comment

https://www.politico.com/newsletters/prescription-pulse/2020/01/07/2020-drug-price-increases-unlikely-to-change-policy-488001

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— 2020 drug price increases unlikely to catalyze cost-cutting action, say experts.

 Both House Speaker Nancy Pelosi and Republican Sen. Chuck Grassley cited the initial wave of drug price hikes as examples of why their respective bills tackling the cost of pharmaceuticals should move forward. But when Prescription PULSE spoke with a half dozen experts tracking the industry, not one believed the hikes — which averaged around 5 percent across more than 470 drugs — would sway Congress or the administration to drug pricing reform.

“The increases are a persistent reminder that Congress and the administration have done nothing to reduce drug prices. But the increases also happen so regularly that it’s probably unrealistic to think they’ll spur any action this time around,” said Rob Smith, who tracks the political and policy outlook of the drug industry for Capital Alpha Partners.

“I don’t necessarily think the increases themselves improve or diminish the odds of material drug pricing legislation getting across the finish line,” said John Leppard of Washington Analysis.

Of the 471 drugs whose prices have increased, 466 were brand-name medicines, according to GoodRx, which tracks where consumers can get lower-priced medicines. GoodRx doesn’t track doctor-administered drugs so there were likely other increases not captured by their analysis. Other companies are expected to announce price increases as the month goes on.

Despite the focus on drug costs, companies are continuing their habit of regularly raising the prices, often multiple times a year, said Anna Kaltenboeck, a program director and senior health economist at Memorial Sloan Kettering Cancer Center. “This is the starting volley for the year so to speak,” she said.

 

 

 

Every American family basically pays an $8,000 ‘poll tax’ under the U.S. health system, top economists say

Posted on by • Posted in 2020 Election Issues, Cost Management, Economist, Health Insurance Coverage Adequacy, Health Policy, Life Expectancy, Physician, Physician Compensation, Physician Practice Management, Physician Workforce, Political Differences, Political Inaction, Politics, Status Quo, Surprise Bills • Leave a comment

https://www.washingtonpost.com/business/2020/01/07/every-american-family-basically-pays-an-poll-tax-under-us-health-system-top-economists-say/?utm_campaign=post_most&utm_medium=Email&utm_source=Newsletter&wpisrc=nl_most&wpmm=1

Princeton economist Anne Case speaks about “deaths of despair” in the United States at the American Economic Association's annual meeting in San Diego this past weekend. (Heather Long/The Washington Post)

America’s sky-high health-care costs are so far above what people pay in other countries that they are the equivalent of a hefty tax, Princeton University economists Anne Case and Angus Deaton say. They are surprised Americans aren’t revolting against these taxes.

“A few people are getting very rich at the expense of the rest of us,” Case said at conference in San Diego on Saturday. The U.S. health-care system is “like a tribute to a foreign power, but we’re doing it to ourselves.”

The U.S. health-care system is the most expensive in the world, costing about $1 trillion more per year than the next-most-expensive system — Switzerland’s. That means U.S. households pay an extra $8,000 per year, compared with what Swiss families pay. Case and Deaton view this extra cost as a “poll tax,” meaning it is levied on every individual regardless of their ability to pay. (Most Americans think of a poll tax as money people once had to pay to register to vote, but “polle” was an archaic German word for “head.” The idea behind a poll tax is that it falls on every head.)

Despite paying $8,000 more a year than anyone else, American families do not have better health outcomes, the economists argue. Life expectancy in the United States is lower than in Europe.

“We can brag we have the most expensive health care. We can also now brag that it delivers the worst health of any rich country,” Case said.

Case and Deaton, a Nobel Prize winner in economics, made the critical remarks about U.S. health care during a talk at the American Economic Association’s annual meeting, where thousands of economists gather to discuss the health of the U.S. economy and their latest research on what’s working and what’s not.

The two economists have risen to prominence in recent years for their work on America’s “deaths of despair.” They discovered Americans between the ages of 25 and 64 have been committing suicide, overdosing on opioids or dying from alcohol-related problems like liver disease at skyrocketing rates since 2000. These “deaths of despair” have been especially large among white Americans without college degrees as job options have rapidly declined for them.

Their forthcoming book, “Deaths of Despair and the Future of Capitalism,” includes a scathing chapter examining how the U.S. health-care system has played a key role in these deaths. The authors call out pharmaceutical companies, hospitals, device manufacturers and doctors for their roles in driving up costs and creating the opioid epidemic.

In the research looking at the taxing nature of the U.S. health-care system compared with others, Deaton is especially critical of U.S. doctors, pointing out that 16 percent of people in the top 1 percent of income earners are physicians, according to research by Williams College professor Jon Bakija and others.

“We have half as many physicians per head as most European countries, yet they get paid two times as much, on average,” Deaton said in an interview on the sidelines of the AEA conference. “Physicians are a giant rent-seeking conspiracy that’s taking money away from the rest of us, and yet everybody loves physicians. You can’t touch them.”

As calls grow among the 2020 presidential candidates to overhaul America’s health-care system, Case and Deaton have been careful not to endorse a particular policy.

“It’s the waste that we would really like to see disappear,” Deaton said.

After looking at other health systems around the world that deliver better health outcomes, the academics say it’s clear that two things need to happen in the United States: Everyone needs to be in the health system (via insurance or a government-run system like Medicare-for-all), and there must be cost controls, including price caps on drugs and government decisions not to cover some procedures.

The economists say they understand it will be difficult to alter the health-care system, with so many powerful interests lobbying to keep it intact. They pointed to the practice of “surprise billing,” where someone is taken to a hospital — even an “in network” hospital covered by their insurance — but they end up getting a large bill because a doctor or specialist who sees them at the hospital might be considered out of network.

Surprise billing has been widely criticized by people across the political spectrum, yet a bipartisan push in Congress to curb it was killed at the end of last year after lobbying pressure.

“We believe in capitalism, and we think it needs to be put back on the rails,” Case said.

 

 

 

Medicare for All’s missing mental health discussion

Posted on by • Posted in 2020 Election Issues, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Medicare, Medicare for All, Mental Health • 1 Comment

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Illustration of a health plus on a therapist couch.

America’s mental health care system is in dire need of an overhaul, but the real specifics are largely missing from the 2020 debate about health care.

Why it matters: Suicide and drug overdose rates continue to rise, and the U.S. faces a shortage of mental health providers and a lack of access to treatment.

The big picture: Private insurance is plagued with holes in mental health coverage. Even even though insurers are legally required to cover behavioral health the same way as physical health, they don’t.

Yes, but: “Medicare to All” may not solve the problem, Mental Health America president and CEO Paul Gionfriddo told me.

  • “Medicare would need to be redesigned significantly,” he said.
  • Medicare has its own coverage flaws. It would also be crucial to design a system that encourages preventive and early identification services rather than just post-crisis care.

There’s also a shortage of mental-health providers. Paying mental health providers more could help address this, but care delivery would also need to be redesigned, Gionfriddo said.

  • Rural areas, for example, would likely still struggle to attract and support these providers because of their remoteness and population size.
  • “The big wild card is how many mental health providers would participate in a Medicare for all program or opt out of insurance entirely,” said the Kaiser Family Foundation’s Larry Levitt.

For Democrats who support Medicare for All, highlighting how it could help mental health care could have a political upside.

  • “Talking about mental health care needs humanizes the candidates, indicts the shortcomings of private insurance and provides rationale for the need for significant reforms around the current system,” Democratic health consultant Chris Jennings said.

 

 

 

The U.S. Spends $2,500 Per Person on Health Care Administrative Costs. Canada Spends $550. Here’s Why

Posted on by • Posted in 2020 Election Issues, Center for American Progress, Cost Management, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, Out of Pocket Expenses, Public Option, Single Payer Health System, Single Payer Healthcare System • Leave a comment

https://time.com/5759972/health-care-administrative-costs/

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Whether it’s interpreting medical bills, struggling to get hospital records, or fighting with an insurance provider, Americans are accustomed to battling bureaucracy to access their health care. But patients’ time and effort are not the only price of this complexity. Administrative costs now make up about 34% of total health care expenditures in the United States—twice the percentage Canada spends, according to a new study published Monday in Annals of Internal Medicine.

These costs have increased over the last two decades, mostly due to the growth of private insurers’ overhead. The researchers examined 2017 costs and found that if the U.S. were to cut its administrative spending to match Canadian levels, the country could have saved more than $600 billion in just that one year.

“The difference [in administrative costs] between Canada and the U.S. is enough to not only cover all the uninsured but also to eliminate all the copayments and deductibles, and to amp up home care for the elderly and disabled,” says Dr. David Himmelstein, a professor at the CUNY School of Public Health at Hunter College and co-author of the study. “And frankly to have money left over.”

Closing the Health Care Gap : Ashley Judd, Dr. Raj Panjabi (moderated by Haley Sweetland Edwards)
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Research has long shown that the U.S., which uses a disparate system of private providers and insurers, has higher administrative costs than other developed countries that use single-payer systems. But the Annals study puts a finer point on it: as the first major effort to calculate administrative costs across the U.S. health system in nearly two decades, the researchers found that the gap between the U.S. and Canada has widened significantly.

The U.S. now spends nearly five times more per person on health care administration than Canada does. The U.S. administrative costs came out to $812 billion in 2017, or $2,497 per person in the U.S. compared with $551 per person in Canada, according to the Annals study.

Along with Himmelstein, co-authors Steffie Woolhandler and Terry Campbell examined administrative costs for insurance companies and government agencies that administer healthcare, as well as costs in four settings: hospitals, nursing homes, home care agencies and hospices and physician practices. For each category, the researchers determined which costs were administrative and conducted analyses to adjust comparisons between relative costs in the U.S. and Canada.

Insurers’ overhead, the largest category, totaled $275.4 billion in the U.S. in 2017, or 7.9% of all national health expenditures, compared with $5.36 billion in Canada, or 2.8% of national health expenditures. The American number included $45 billion in government spending to administer health care programs and $229.5 billion in private insurers’ overhead and profits, which covers employer plans and managed care plans funded by Medicare and Medicaid.

This insurance overhead accounted for most of the total increase in administrative spending in the U.S. since 1999, according to the study. While the share of Americans covered by commercial insurance plans has not changed much, private insurers have expanded their role as subcontractors handling what are known as “managed care” plans for Medicaid and Medicare. The study notes that most Medicaid recipients are now on private managed care plans and about one third of Medicare enrollees now have Medicare Advantage plans. Both of these types of plans have higher overhead costs than the publicly administered alternatives.

“We were struck, and frankly hadn’t expected it until we delved into the data, by the huge increase in insurance overhead,” Himmelstein told TIME.

Other reports, including one by the Center for American Progress published last April, have identified ways to reduce administrative costs without moving the U.S. to a single-payer health care system. But Himmelstein says his study shows that a public option that preserves private insurance wouldn’t provide the same savings as a traditional single-payer system. “We could streamline the bureaucracy to some extent with other approaches, but you can’t get nearly the magnitude of savings that we could get with a single payer,” Himmelstein says, adding, “If the Medicare public option includes the Medicare Advantage plans, it’s actually conceivable that the public option would increase the bureaucratic costs.”

Most of the public option plans proposed by Democratic presidential candidates are not detailed enough to determine exact costs, Himmelstein says. But overall, he believes they won’t result in significant cost savings.

In addition to their research, Himmelstein and Woolhandler have been longtime advocates for single-payer health care. They co-founded the group Physicians for a National Health Program, which advocates for a single-payer system. They also conducted the initial health administrative costs study on 1999 data and have published other studies comparing hospital administrative costs in the U.S. and other countries.

Himmelstein says his team’s estimates of total U.S. administrative costs in the Annals study are likely conservative. When estimating physicians’ administrative costs, the researchers relied on a 2011 study of time spent by physicians and their staffs interacting with insurers. And he notes that while 2017 data was often the latest available when they were conducting this study, 2018 health spending numbers have since come out showing further increases in insurance overhead.

“We can afford universal coverage with a single payer plan, not just universal coverage but first dollar coverage for everybody in our country if we adopted a single-payer Medicare for all approach,” Himmelstein says. “If you’re going to cover everybody without getting those savings you’re going to have to spend more or you’re going to have to have big co-payments and deductibles that deter people from getting the care that they actually need.”

 

 

Beyond the ACA: Healthcare legal fights to watch in 2020

Posted on by • Posted in 2020 Election Issues, ACA, Antitrust, Cost Sharing Reduction Payments, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Health System, Hospital, Hospital Industry, Individual Mandate, Out of Pocket Expenses, Preexisting Conditions, Price Transparency, Short Term Health Insurance, Skinny Health Plans, Supreme Court, Texas v. United States • Leave a comment

https://www.healthcaredive.com/news/beyond-the-aca-healthcare-legal-fights-to-watch-in-2020/569793/

All eyes were on the legal drama over the Affordable Care Act as 2019 drew to a close — and while that case remains a focus for this year — a lot more is also at stake.

Payers and providers are fiercely contesting a price transparency push from the Trump administration that would force privately negotiated rates out into the open. The administration is also being challenged over regulations regarding risk corridor payments to payers and the expansion of association health plans.

Antitrust concerns are also front and center, as payers clash over exclusive broker policies in Florida.

As policy debates rage on this year through presidential debates and on Capitol Hill, courthouses will also be a key battleground for the industry in 2020.  Below are the big cases to watch.

ACA and the high court

The most consequential case still making its way through the court system is the challenge to the Affordable Care Act. At the end of last year, an appeals court notched a win for the red states fighting the law by declaring the individual mandate was no longer constitutional after the penalty was zeroed out by a Republican-controlled Congress.

The three-judge panel, however, stopped short of declaring the entire ACA void, instead asking the lower court that made the argument that the rest of the law is not severable from the individual mandate to revisit and clarify its ruling.

Supporters of the ACA are trying to speed up what is almost certainly the next major step for the court case by petitioning the Supreme Court on Friday to hear the case before the November presidential election.

“States, health insurers, and millions of Americans rely on those provisions when making important — indeed, life-changing — decisions. The remand proceedings contemplated by the panel majority would only prolong and exacerbate the uncertainty already caused by this litigation,” according to the Jan. 3 petition filed by California Attorney General Xavier Becerra and a coalition of 19 other states and D.C.

Five justices are needed to approve the suggested expedited timeline while four are needed to agree to hear the case at all. More will be clear in the next couple of months as justices make their decisions. The ultimate decision — whether it comes in months or years — will have huge ramifications across the healthcare landscape.

Price transparency pushback

The legal clash between hospitals and the administration over forcing providers to reveal negotiated rates is set to heat up quickly in the new year.

The federal judge overseeing the case recently released a timeline for how it is expected to proceed in the coming months. Hospitals are seeking a swift ruling and summary judgment. HHS faces a Feb. 4 deadline to file its opposition motion to the summary judgment, while deadlines for motions extend through March 10.

“That is an extremely accelerated schedule,” James Burns, a partner at Akerman, told Healthcare Dive. “My strong suspicion is that we’ll get a ruling from the judge late spring or earlier summer at the latest, which is obviously all before the election.”

Hospital groups including the American Hospital Association and health systems have alleged that the administration’s push to force negotiated rates out into the open exceeds the government’s authority and violates the First Amendment because it compels hospitals to reveal confidential and proprietary information. Legal experts say the principal argument will center around whether the government exceeded its authority, not the First Amendment.

Risk corridor payments

On last month’s Supreme Court docket was a case regarding an ACA risk adjustment program. At issue are $12 billion in payments insurers say they are owed from losses on state exchanges.

Early participants in the marketplaces were hit hard in some cases as they attempted to adjust to people gaining coverage under the ACA. A few nonprofit co-ops were driven to close when CMS declared the program had to be budget neutral and therefore only about one-eighth of the expected risk corridor amount could be paid out.

A number of justices seemed to lean toward ruling in favor of the insurers during arguments in front of the high court, Tim Jost, health law expert and professor emeritus at Washington and Lee University School of Law, told Healthcare Dive​. “Only a couple of the justices that spoke seemed inclined to support the government, but we’ll see what happens there,” he said.

If the payers do prevail, there’s still the question of exactly how much they are owed and how the money will be distributed. It could ultimately affect medical loss ratio rebates or premiums down the road, he said.

CSR fight in court this week

The legal fight over canceled payments to insurers​ under the ACA drags on as oral arguments begin this week in a federal appeals court.

A number of insurers including Maine Community Health Options and Sanford Health claim they’re owed millions in cost-sharing reduction payments that the government failed to pay out after the Trump administration said Congress failed to appropriate the funds. The payments were intended to repay insurers for lowering the cost of care to make coverage affordable for those with low incomes.

Health Options and Sanford both won in the lower courts after judges ruled they were entitled to the unpaid CSR payments. The cases have been consolidated within the appeals court and oral arguments start Thursday.

A ruling in favor of insurers in the risk corridor case could be a good sign for their fight to be reimbursed for CSRs as well, Jost said.

Oscar antitrust argument

Health insurer Oscar has alleged that Blue Cross Blue Shield of Florida is enforcing a broker policy that is impeding Oscar’s ability to sell individual exchange plans and undermines competition in Florida.

The key question in this case is whether Florida Blue, a dominant insurer in the sunshine state, can lawfully bar independent brokers from working with other carriers like Oscar by threatening to cut off their ability to sell all other Florida Blue plans if they sell Oscar’s individual plans.

A lower court ruled against Oscar and found that such arrangements are shielded from antitrust scrutiny. A federal law excludes the “business of insurance” from antitrust scrutiny in some cases, legal experts say this case shouldn’t be exempt from antitrust enforcement.

A group of 10 antitrust scholars called the ruling “dangerous” and “plainly incorrect,” in an amicus brief Dec. 23 to the U.S. Court of Appeals for the 11th District.

“The practice at issue here — forming exclusive deals with industry gatekeepers to box out potential entry by competitors — is a quotidian business strategy that appears across many industries and raises well-recognized antitrust concerns,” according to the amicus brief.

Oscar alleges that consumers are harmed if brokers are barred from discussing other plan options outside Florida Blue.

The Department of Justice also intends to file an amicus brief, according to a recent filing in the appeals case.

Association, short-term health plans

The federal court of appeals in D.C. heard arguments late last year to review a judge’s decision in March 2019 declaring association health plans an “end-run” around the ACA. AHPs are offered by business or professional associations and aren’t bound by ACA requirements protecting pre-existing conditions and mandating essential benefits.

U.S. District Judge John Bates had strong language in March for the Trump administration, which is being challenged for loosening restrictions on what groups can offer AHPs — and therefore expanding their presence in the marketplace.

The D.C. appeals court is expected to rule on the case in the coming months. Jost’s take from the oral arguments is that the court seem inclined to reverse Bates’ decision, though he warned the outcome is not certain. “It’s a technical case that really has more to do with interpreting ERISA than the Affordable Care Act, though both are relevant,” he said.

A similar challenge has risen on short-term health plans, which were originally meant as stopgap coverage but have been expanded by the Trump administration to offer up to three years worth of coverage.

U.S. District Judge Richard Leon ruled in favor of the administration in July, saying the plans did not undermine the ACA. The plaintiffs, including the Association for Community Affiliated Plans, the National Alliance on Mental Illness and AIDS United, quickly appealed to the U.S. Court of Appeals in D.C.

Briefs are due this month and argument is likely in the spring, Jost said.

If AHPs and short-term plans are allowed to continue as the Trump administration has pushed for, it presents a concern for the viability of ACA risk pools. Consumer warnings against short-term plans, however, may be working, he said.

“There’s been a lot of publicity about how risky these plans are and I think they probably have not been achieving the same market strength they were hoping for,” he said.

 

 

 

Supreme Court says ACA opponents have until Friday to respond to motion to expedite

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Individual Mandate, Supreme Court, Texas v. United States • Leave a comment

https://www.healthcaredive.com/news/blue-states-ask-supreme-court-to-weigh-aca-case-ahead-of-2020-election/569788/

UPDATE: Jan. 7, 2019: The Supreme Court on Monday set a Friday afternoon deadline for challengers of the ACA to respond to the blue state coalition’s motion to expedite the case.

California Attorney General Xavier Becerra and a coalition of 19 other states and D.C. on Friday asked the Supreme Court to hear the case seeking to overturn the Affordable Care Act, following an appeals court ruling that a key element of the law is unconstitutional.   

The ruling warrants an immediate and expedited review, the group said in its petition filed to the Supreme Court. The coalition laid out an aggressive timeline, in an effort to get an answer on the case before the November 2020 presidential election.

Although the court is made of nine justices, five of whom lean conservative, just four justices are needed to agree to hear the case. However, five are needed to approve the expedited timeline, according to University of Michigan law professor Nicholas Bagley.

The landmark Affordable Care Act drastically altered the healthcare industry and ushered in insurance coverage for millions of Americans. Its provisions regulate a substantial portion of the nation’s economy and any further delay in a final outcome stokes uncertainty, the petition argues.

“States, health insurers, and millions of Americans rely on those provisions when making important — indeed, life-changing — decisions. The remand proceedings contemplated by the panel majority would only prolong and exacerbate the uncertainty already caused by this litigation,” the petition states.

Rob Henneke, the attorney representing the two individual plaintiffs in this case, said the push for a Supreme Court review this fast is unreasonable and unrealistic. “This is more influenced by the political calendar now that we are in 2020 than a valid litigation strategy,” he told Healthcare Dive.

The closely-watched case has fueled jitters in healthcare markets as the litigation has made its way through the courts.

A federal appeals court recently affirmed part of a lower court’s ruling that found the individual mandate is unconstitutional because it no longer has a financial penalty attached. The lower court went one step further and found that because the mandate is unconstitutional, so too is the entire law. The Texas-led coalition of Republican states seeking to overturn the law has argued that when Congress zeroed out the financial penalty associated with forgoing insurance, it invalidated the entire law.

This group of red states and two individual plaintiffs argue that the law cannot stand on its own without the individual mandate and that the entirety of the law must be struck down. That mandate’s financial penalty was nixed in a subsequent tax bill.

“The individual mandate is unconstitutional because it can no longer be read as a tax,” the majority wrote in the federal appeals court ruling. But on the key question of whether the rest of the law can stand, the majority sent that back to the lower court to provide more detailed analysis on what can stay or go.

The blue states intervened to defend the ACA after the Trump administration’s DOJ waffled on its position and is not actively defending to uphold the law throughout the country.

 

 

 

Despite provider claims, hospital M&A not associated with improved care, NEJM finds

Posted on by • Posted in 2020 Election Issues, Agency for Healthcare Quality and Research (AHRQ), Antitrust, Dept of Health and Human Services (HHS), HCAHPS, Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Out of Pocket Expenses, Price Transparency, Quality, Quality of Care • Leave a comment

https://www.healthcaredive.com/news/despite-provider-claims-hospital-ma-not-associated-with-improved-care-ne/569671/

Dive Brief:

  • Hospital consolidation is associated with poorer patient experiences and doesn’t improve care, according to a study published Thursday in the New England Journal of Medicine, refuting a common provider justification for rampant mergers and acquisitions.
  • The study funded by HHS’ health quality research division, the Agency for Healthcare Research and Quality, found that acquired hospitals saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates. ​Acquired hospitals did improve slightly in clinical process, though that can’t be directly chalked up to the results of an acquisition, researchers found.
  • It’s further evidence that bigger isn’t always better when it comes to hospitals, and adds onto a heap of previous studies showing provider mergers lead to higher prices for commercially insured patients.

Dive Insight:

Hospitals continue to turn to M&A to navigate tricky industry headwinds, including lowering reimbursement and flatlining admissions as patients increasingly turn to alternate, cheaper sites of care. Provider trade associations maintain consolidation lowers costs and improves operations, which trickles down to better care for patients.

Though volume of deals has ebbed and flowed, hospital M&A overall has steadily increased over the past decade. The hospital sector in 2018 saw 90 deals, according to consultancy Kaufman Hall, up 80% from just 50 such transactions in 2009.

Thursday’s study analyzed CMS data on hospital quality and Medicare claims from 2007 through 2016 and data on hospital M&A from 2009 to 2013 to look at hospital performance before and after acquisition, compared with a control group that didn’t see a change in ownership.

American Hospital Association General Counsel Melinda Hatton took aim at the study’s methods to refute its findings, especially its reliance on a common measure of patient experience called HCAHPS.

“Using data collected from patients to make claims about quality fails to recognize that it is often incomplete, as patients are not required to and do not always respond comprehensively,” Hatton told Healthcare Dive in a statement. “The survey does not capture information on the critical aspects of care as it is delivered today.”

The results contradict a widely decried AHA-funded study last year conducted by Charles River Associates that found consolidation improves quality and lowers revenue per admission in the first year prior to integration. The research came quickly under fire by academics and patient advocates over potential cherrypicked results.

A spate of previous studies found hospital tie-ups raise the price tag of care on payers and patients. Congressional advisory group MedPAC found both vertical and horizontal provider consolidation are correlated with higher healthcare costs, the brunt of which is often borne by consumers in the form of higher premiums and out-of-pocket costs.

A 2018 study published in the Quarterly Journal of Economics found prices rose 6% after hospitals were acquired, partially due to limiting market competition. Groups like the left-leaning Center for American Progress have called for increased scrutiny from antitrust regulators as a result, but — despite snowballing M&A — there’s been little change in antitrust regulation since the 1980s. The Federal Trade Commission won several challenges to hospital consolidation in the 2010s, but the agency only contests 2% to 3% of mergers annually, according to MedPAC analysts.

Providers, like most actors across the healthcare ecosystem, are increasingly under fire for high prices and predatory billing practices. President Donald Trump’s administration finalized a rule late last year that would force hospitals to reveal secret negotiated rates with insurers, relying on the assumption that transparency would shame both actors into lowering prices.

A cadre of provider groups led by the AHA sued HHS over the regulation, arguing it violates the First Amendment and would place undue burden on hospitals, while potentially stifling competition. The lawsuit is currently being reviewed by the U.S. District Court for the District of Columbia.

 

 

 

Hospital M&A spurs rising healthcare costs, MedPAC finds

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Antitrust, Center for Medicare and Medicaid Services (CMS), Federal Trade Commission (FTC), Health Insurance Industry, Health Policy, Health System, High Deductible Health Plans, High Premiums, Horizontal Consolidation, Horizontal Integration, Hospital, Hospital Industry, Market Consolidation, Market Power, Medicare Payment Advisory Commission (MedPAC), Mergers & Acquisitions, Monopoly, Monopoly Behavior, Mortality, Out of Pocket Expenses, Quality, Quality of Care, Readmission, Vertical Consolidation, Vertical Integration • Leave a comment

https://www.healthcaredive.com/news/hospital-ma-spurs-rising-healthcare-costs-medpac-finds/566858/

Dive Brief:

  • Both vertical and horizontal hospital consolidation is correlated with higher healthcare costs, according to a congressional advisory committee on Medicare, in yet another study finding rampant mergers and acquisitions drive up prices for consumers.
  • The Medicare Payment Advisory Commission found providers with greater market share see higher commercial profit margins, leading to higher costs per discharge, though the direct relationship between market share and cost per discharge was not statistically meaningful itself.
  • MedPAC also found vertical integration between health systems and physician practices increases prices and spending for consumers. The top-down consolidation leads to higher prices for commercial payers and Medicare alike, as hospitals have more bargaining heft and benefit from Medicare’s payment hikes for hospital outpatient departments.

Dive Insight:

Hospital consolidation has become a major point of concern for policymakers, antitrust regulators and patient advocacy groups. A slew of prior studies have found unchecked provider M&A contributes to higher healthcare costs, with the brunt often borne by consumers in the form of higher premiums and out-of-pocket costs.

Since 2003, the number of “super-concentrated” markets has increased from 47% to 57%, according to the MedPAC analysis of CMS and American Hospital Association data. Those markets, with a high amount of consolidation, rarely see new providers enter, which stifles competition, and are rarely reviewed by the government.

There’s been little change in antitrust regulation since the 1980s and, though the Federal Trade Commission has won several challenges to hospital consolidation in the 2010s, the agency only challenges 2% to 3% of mergers annually.

MedPAC also found super-concentrated insurance markets actually led to lower costs per discharge compared to lower levels of payer concentration, deflating somewhat hospital lobbies’ arguments that payer consolidation is driving prices higher.

Committee members called for more analysis of how macro trends like an aging population and federal policy could be driving consolidation and impacting prices, leading some to call for a revamp of the hospital payment framework itself.

“We have to change the way hospitals are paid. I don’t see another solution,” said Brian DeBusk, CEO of Tennesse-based DeRoyal Industries, a medical manufacturer. “Are you going to undo a thousand hospital mergers? Are you going to enact rate setting? I don’t see another way.”

MedPAC also looked at vertical integration, where hospitals snap up physicians practices downstream. According to the Physician Advocacy Institute, only 26% of physician practices were owned by hospitals in 2012, but by last year that number had spiked to 44%.

Since 2012, billing has shifted from physician offices to hospital outpatient departments, especially in specialty practices. In chemotherapy administration, for example, physician offices saw almost 17% less volume between 2012 and 2018, while outpatient centers saw a 53% increase in volume, according to MedPAC.

Physicians in hospital-owned practices also refer more patients to the hospital’s facilities and, despite a common stumping point that integration improves quality through care coordination, its effect on quality is “ambiguous,” MedPAC analyst Dan Zabinski said Thursday at the committee’s November meeting.

Despite the mountain of evidence, the AHA published a widely-decried study in September claiming acquired hospitals see a reduction in operating expenses and a statistically significant drop in readmission and mortality rates. The study was criticized for not using actual claims data in its analysis among other methodological and conflict of interest concerns.

Republican leaders in the House Energy and Commerce Committee asked MedPAC to study provider consolidation in August, and the body’s full findings will be included in its March report to Congress.​