Category Archives: American Hospital Association (AHA)

Cash-Pinched Hospitals Press Congress to Break Virus Fund Logjam

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Cash, Cash Reserves, Chronic Care Management, Chronic Conditions, Chronic Diseases, Coronavirus, Credit Quality, Credit Ratings, Crisis, Crisis Management, Deferred Healthcare, Dept of Health and Human Services (HHS), Economic Crisis, Economic Recovery, Economic Stimulus, Employer-Based Health Insurance, Health Insurance Coverage Adequacy, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Bankruptcy, Hospital Industry, Liquidity, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Out of Pocket Expenses, Preexisting Conditions, Safety Net Hospitals, Safety-Net Providers, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

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DIY Money Tree Gift Idea - So TIPical Me

Hospital groups are pressing Congress to put more money into a relief fund for hospitals and providers, even as labor data showed signs of a turnaround for the health-care industry last month.

Congressional leaders are at a standstill over the next coronavirus-relief package and it could be weeks until lawmakers vote on legislation. Hospital groups have said the $175 billion Congress already approved has been a crucial lifeline to keep hospitals from laying off more staff or potentially closing. Some are worried the money may start to run dry soon.

The coronavirus is prompting many Americans to delay health care, and further funding delays exacerbate the need for assistance, the hospitals warn. Some providers that shed jobs earlier in the pandemic have begun adding them back, but employment levels remain far below where they once were.

“The longer we are in the pandemic the more clear it becomes that this is not going to be a short-term issue,” Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals, said.

Leaders of both parties back more federal funding to help hospitals and doctors’ offices stay in business. Democrats proposed $100 billion for the industry, as hospital groups such as AEH sought, in virus-relief legislation (H.R. 6800) the House passed earlier this year. Republicans included $25 billion in their counterproposal.

The Health and Human Services Department has promised about $115 billion of the $175 billion in relief Congress approved this year to help health-care providers offset their Covid-19-related losses, according to agency data. That leaves the industry with about $60 billion left.

The U.S. exceeded 5 million confirmed Covid-19 cases Aug. 9, according to data from Bloomberg News and Johns Hopkins University, more than any other country. Almost 165,000 people in the U.S. have died from the virus.

Industry Impact

The health-care industry added more than 126,000 jobs in July, according to data released last week by the Bureau of Labor Statistics. Dentist offices and hospitals, the section of the industry that was laying off tens of thousands of people in April and May, accounted for more than 70,000 of those new jobs.

Still, there were 797,000 fewer health-care jobs compared to before the pandemic, according to BLS.

The virus hit parts of the heath-care industry unevenly. Large health systems such as HCA Healthcare Inc. and Universal Health Services Inc. posted better-than-expected profits for the second quarter of 2020.

Some hospitals that didn’t have much cash-on-hand to start the year are struggling with lower profits and may need added relief if the virus continues to keep Americans from seeking care, industry watchers said.

“No hospital is going to come out of this year better than they were in prior years,” Suzie Desai, senior director for S&P Global Rating’s Not-for-Profit Health Care group, said.

The federal relief funds helped buoy hospitals this year, hospital groups argue. The American Hospital Association estimates that without relief funds, hospitals margins would have been down 15% and could be down 11% at the end of 2020 if the virus continues to spread at its current pace.

The AHA estimated losses for the nation’s hospitals and health systems will reach $323 billion this year.

 

 

Industry Voices—6 ways the pandemic will remake health systems

Posted on by • Posted in American Hospital Association (AHA), Capital Budget, Capital Expenditure, Cash, Cash Reserves, Competition, Consumer Confidence, Consumer Engagement, Consumer Loyalty, Consumer Trust, Consumer-Centered Care Pathway, Consumerism, Coronavirus, Cost Management, Cost Reduction, Deferred Healthcare, Disruption, Disruptive Technology, Economic Crisis, Economic Recovery, Economic Stimulus, Economy Reopening, Elective Procedures, Elective Surgery, Employer-Based Health Insurance, Financial Pressure, Financial Viability, Financially Distressed, Health Insurance Coverage Adequacy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Job, Job Loss, Job Market, Labor Spend Management, Liquidity, Market Consolidation, Market Power, Market Share, Market Trends, Market Uncertainty, Medicaid, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Out of Pocket Expenses, Pandemic, Patient Engagement, Patient Satisfaction, Primary Care, Primary Care Delivery Model, Return on Investment, Strategic Advantage, Strategic Alignment, Strategic Leadership, Strategy, Streamlining Operations, Telemedicine, Transformation Fundamental, Transformation Sustained, Underinsured, Unemployment, Unemployment Insurance, Uninsured, Virtual Healthcare, Virtual Hospital, Virtual Visit • Leave a comment

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Industry Voices—6 ways the pandemic will remake health systems ...

Provider executives already know America’s hospitals and health systems are seeing rapidly deteriorating finances as a result of the coronavirus pandemic. They’re just not yet sure of the extent of the damage.

By the end of June, COVID-19 will have delivered an estimated $200 billion blow to these institutions with the bulk of losses stemming from cancelled elective and nonelective surgeries, according to the American Hospital Association. 

A recent Healthcare Financial Management Association (HFMA)/Guidehouse COVID-19 survey suggests these patient volumes will be slow to return, with half of provider executive respondents anticipating it will take through the end of the year or longer to return to pre-COVID levels. Moreover, one-in-three provider executives expect to close the year with revenues at 15 percent or more below pre-pandemic levels. One-in-five of them believe those decreases will soar to 30 percent or beyond. 

Available cash is also in short supply. A Guidehouse analysis of 350 hospitals nationwide found that cash on hand is projected to drop by 50 days on average by the end of the year — a 26% plunge — assuming that hospitals must repay accelerated and/or advanced Medicare payments.

While the government is providing much needed aid, just 11% of the COVID survey respondents expect emergency funding to cover their COVID-related costs.

The figures illustrate how the virus has hurled American medicine into unparalleled volatility. No one knows how long patients will continue to avoid getting elective care, or how state restrictions and climbing unemployment will affect their decision making once they have the option.

All of which leaves one thing for certain: Healthcare’s delivery, operations, and competitive dynamics are poised to undergo a fundamental and likely sustained transformation. 

Here are six changes coming sooner rather than later.

 

1. Payer-provider complexity on the rise; patients will struggle.

The pandemic has been a painful reminder that margins are driven by elective services. While insurers show strong earnings — with some offering rebates due to lower reimbursements — the same cannot be said for patients. As businesses struggle, insured patients will labor under higher deductibles, leaving them reluctant to embrace elective procedures. Such reluctance will be further exacerbated by the resurgence of case prevalence, government responses, reopening rollbacks, and inconsistencies in how the newly uninsured receive coverage.

Furthermore, the upholding of the hospital price transparency ruling will add additional scrutiny and significance for how services are priced and where providers are able to make positive margins. The end result: The payer-provider relationship is about to get even more complicated. 

 

2. Best-in-class technology will be a necessity, not a luxury. 

COVID has been a boon for telehealth and digital health usage and investments. Two-thirds of survey respondents anticipate using telehealth five times more than they did pre-pandemic. Yet, only one-third believe their organizations are fully equipped to handle the hike.

If healthcare is to meet the shift from in-person appointments to video, it will require rapid investment in things like speech recognition software, patient information pop-up screens, increased automation, and infrastructure to smooth workflows.

Historically, digital technology was viewed as a disruption that increased costs but didn’t always make life easier for providers. Now, caregiver technologies are focused on just that.

The new necessities of the digital world will require investments that are patient-centered and improve access and ease of use, all the while giving providers the platform to better engage, manage, and deliver quality care.

After all, the competition at the door already holds a distinct technological advantage.

 

3. The tech giants are coming.

Some of America’s biggest companies are indicating they believe they can offer more convenient, more affordable care than traditional payers and providers. 

Begin with Amazon, which has launched clinics for its Seattle employees, created the PillPack online pharmacy, and is entering the insurance market with Haven Healthcare, a partnership that includes Berkshire Hathaway and JPMorgan Chase. Walmart, which already operates pharmacies and retail clinics, is now opening Walmart Health Centers, and just recently announced it is getting into the Medicare Advantage business.

Meanwhile, Walgreens has announced it is partnering with VillageMD to provide primary care within its stores.

The intent of these organizations clear: Large employees see real business opportunities, which represents new competition to the traditional provider models.

It isn’t just the magnitude of these companies that poses a threat. They also have much more experience in providing integrated, digitally advanced services. 

 

4. Work locations changes mean construction cost reductions. 

If there’s one thing COVID has taught American industry – and healthcare in particular – it’s the importance of being nimble.

Many back-office corporate functions have moved to a virtual environment as a result of the pandemic, leaving executives wondering whether they need as much real estate. According to the survey, just one-in-five executives expect to return to the same onsite work arrangements they had before the pandemic. 

Not surprisingly, capital expenditures, including new and existing construction, leads the list of targets for cost reductions.

Such savings will be critical now that investment income can no longer be relied upon to sustain organizations — or even buy a little time. Though previous disruptions spawned only marginal change, the unprecedented nature of COVID will lead to some uncomfortable decisions, including the need for a quicker return on investments. 

 

5. Consolidation is coming.

Consolidation can be interpreted as a negative concept, particularly as healthcare is mostly delivered at a local level. But the pandemic has only magnified the differences between the “resilients” and the “non-resilients.” 

All will be focused on rebuilding patient volume, reducing expenses, and addressing new payment models within a tumultuous economy. Yet with near-term cash pressures and liquidity concerns varying by system, the winners and losers will quickly emerge. Those with at least a 6% to 8% operating margin to innovate with delivery and reimagine healthcare post-COVID will be the strongest. Those who face an eroding financial position and market share will struggle to stay independent..

 

6. Policy will get more thoughtful and data-driven.

The initial coronavirus outbreak and ensuing responses by both the private and public sectors created negative economic repercussions in an accelerated timeframe. A major component of that response was the mandated suspension of elective procedures.

While essential, the impact on states’ economies, people’s health, and the employment market have been severe. For example, many states are currently facing inverse financial pressures with the combination of reductions in tax revenue and the expansion of Medicaid due to increases in unemployment. What’s more, providers will be subject to the ongoing reckonings of outbreak volatility, underscoring the importance of agile policy that engages stakeholders at all levels.

As states have implemented reopening plans, public leaders agree that alternative responses must be developed. Policymakers are in search of more thoughtful, data-driven approaches, which will likely require coordination with health system leaders to develop flexible preparation plans that facilitate scalable responses. The coordination will be difficult, yet necessary to implement resource and operational responses that keeps healthcare open and functioning while managing various levels of COVID outbreaks, as well as future pandemics.

Healthcare has largely been insulated from previous economic disruptions, with capital spending more acutely affected than operations. But the COVID-19 pandemic will very likely be different. Through the pandemic, providers are facing a long-term decrease in commercial payment, coupled with a need to boost caregiver- and consumer-facing engagement, all during a significant economic downturn.

While situations may differ by market, it’s clear that the pre-pandemic status quo won’t work for most hospitals or health systems.

 

 

 

Hospitals lose legal challenge to 340B drug payment cut

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), District Court of Appeals, Health Policy, Health System, Hospital, Hospital Industry, Medicare, Medicare 340B Drug Discount Program, Medicare Site Neutral Payment, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.healthcaredive.com/news/hospitals-lose-legal-challenge-to-340b-drug-payment-cut/582717/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Healthcare%20Dive:%20Daily%20Dive%2008-01-2020&utm_term=Healthcare%20Dive%20Weekender

340B Program: Important, but Weaknesses Cited - Pharmacy Practice News

Dive Brief:

  • A significant rate cut for some medications for 340B hospitals was based on a “reasonable interpretation of the Medicare statute” and can stand, the U.S. Court of Appeals for the District of Columbia ruled Friday.
  • The 2-1 ruling overturns a district court decision that HHS overstepped its bounds when it cut the reimbursement rate for a certain category of outpatient drugs by 28.5% for hospitals enrolled in the 340B drug discount program.
  • The American Hospital Association, which challenged the rate cut along with three individual hospitals, did not immediately respond to a request for comment. An advocacy group for 340B hospitals said in a statement it was disappointed in the ruling and that the rate change has “caused real and lasting pain to safety-net hospitals and the patients they serve.”

Dive Insight:

The decision is another major blow for hospitals, coming two weeks after the same court ruled HHS also acted within its authority when it reduced payments to off-campus hospital outpatient departments.

AHA said this week it is seeking to have that ruling overturned.

HHS made the cut to 340B hospital outpatient drug reimbursement in the 2018 Outpatient Prospective Payment System rule, arguing that those hospitals, which primarily serve low-income populations, get the drugs at a deep discount and thus could be incentivized to overuse them.

The cut was from 106% of the average sales price to 22.5% less than ASP. Hospitals immediately sued, but HHS retained the reduction in the 2019 OPPS. The department has said the change would save Medicare $1.6 billion in 2018.

Writing for the court, Chief Judge Sri Srinivasan said the department did indeed have the authority to make the reduction, “so as to avoid reimbursing those hospitals at much higher levels than their actual costs to acquire the drugs.”

He also called the cut “a fair, or even conservative, measure of the reduction needed to bring payments to those hospitals into parity with their costs to obtain the drugs.”

In a partially dissenting opinion, Circuit Judge Cornelia Pillard wrote that she believes the statute only allows HHS to make the change for a specific group of hospitals under a clause that requires the agency to use a certain data set it did not use.

 

 

 

 

Canceled elective procedures putting pressure on nation’s hospitals

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Bankruptcy, Cash, Cash Reserves, Cash-Flow Improvements, Chronic Care Management, Chronic Conditions, Chronic Diseases, Clinical Testing, Contact Tracing, Coronavirus, Cost Management, Cost Reduction, Credit Quality, Credit Ratings, Crisis, Crisis Management, Deferred Healthcare, Economic Crisis, Economic Recovery, Economic Stimulus, Elective Procedures, Elective Surgery, Emergency Care, Employee Benefits, Employee Furlough, Employee Hiring Freeze, Employee Layoffs, Employee Pay Cuts, Employer-Based Health Insurance, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, Financial Pressure, Financial Viability, Financially Distressed, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Infection Control, Infection Control Plan, Infectious Virus, Labor Spend Management, Liquidity, Market Consolidation, Market Power, Medicare Advance Payments, Mergers & Acquisitions, Mortality, National Strategy, Net Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Outpatient Care, Pandemic, Personal Protective Equipment (PPE), Reorganization, Supply Chain, The CARES Act • Leave a comment

https://www.healthcarefinancenews.com/news/canceled-elective-procedures-putting-pressure-nations-hospitals

U.S. Hospitals Brace for 'Tremendous Strain' from New Virus - JEMS

Even upticks in COVID-19 patients haven’t made up for the revenue losses, since reimbursement for those services is comparatively slim.

Elective procedures are in a strange place at the moment. When the COVID-19 pandemic started to ramp up in the U.S., many of the nation’s hospitals decided to temporarily cancel elective surgeries and procedures, instead dedicating the majority of their resources to treating coronavirus patients. Some hospitals have resumed these surgeries; others resumed them and re-cancelled them; and still others are wondering when they can resume them at all.

In a recent HIMSS20 digital presentation, Reenita Das, a senior vice president and partner at Frost and Sullivan, said that during the pandemic, plastic surgery activity declined by 100%, ENT surgeries declined by 79%, cardiovascular surgeries declined by 53% and neurosurgery surgeries declined by 57%.

It’s hard to overstate the financial impact this is likely to have on hospitals’ bottom lines. Just this week, American Hospital Association President and CEO Rick Pollack, pulling from Kaufman Hall data, said the cancellation of elective surgeries is among the factors contributing to a likely industry-wide loss of $120 billion from July to December alone. When including data from earlier in the pandemic, the losses are expected to be in the vicinity of $323 billion, and half of the nation’s hospitals are expected to be in the red by the end of the year.

Doug Wolfe, cofounder and managing partner of Miami-based law firm Wolfe Pincavage, said this has amounted to a “double-whammy” for hospitals, because on top of elective procedures being cancelled, the money healthcare facilities received from the federal Coronavirus Aid, Relief, and Economic Security Act was an advance on future Medicare payments – which is coming due. While hospitals perform fewer procedures, they will now have to start paying that money back.

All hospitals are hurting, but some are in a more precarious position than others.

“Some hospital systems have had more cash on hand and more liquidity to withstand some of the financial pressure some systems are facing,” said Wolfe. “Traditionally, the smaller hospital systems in the healthcare climate we face today have faced a lot more financial pressure. They’re not able to control costs the same way as a big system. The smaller hospitals and systems were hurting to begin with.”

LOWER REVENUE, HIGHER COSTS

Some hospitals, especially ones in hot spots, are seeing a surge in COVID-19 patients. While this has kept frontline healthcare workers scrambling to care for scores of sick Americans, COVID-19 treatments are not reimbursed at the same level as surgeries. Hospital capacity is being stretched with less lucrative services.

“Some hospitals may be filling up right now, but they’re filling up with lower-reimbursing volume,” said Wolfe. “Inpatient stuff is lower reimbursement. It’s really the perfect storm for hospitals.”

John Haupert, CEO of Grady Health in Atlanta, Georgia, said this week that COVID-19 has had about a $115 million negative impact on Grady’s bottom line. Some $70 million of that is related to the reduction in the number of elective surgeries performed, as well as dips in emergency department and ambulatory visits. 

During one week in March, Grady saw a 50% reduction in surgeries and a 38% reduction in ER visits. The system is almost back to even in terms of elective and essential surgeries, but due to a COVID-19 surge currently taking place in Georgia, it has had to suspend those services once again. ER visits have only come back about halfway from that initial 38% dip, and the system is currently operating at 105% occupancy.

“Part of what we’re seeing there is reluctance from patients to come to hospitals or seek services,” said Haupert. “Many have significantly exacerbated chronic disease conditions.”

Patient hesitation has been an ongoing problem, as has the associated cost of treating coronavirus patients, said Wolfe.

“When they were ramping up to resume the elective stuff, there was a problem getting patients comfortable,” he said. “And the other thing was that the cost of treating patients in this environment has gone up. They’ve put up plexiglass everywhere, they have more wiping-down procedures, and all of these things add cost and time. They need to add more time between procedures so they can clean everything … so they’re able to do less, and it costs more to do less. Even when elective procedures do resume, it’s not going back to the way it was.”

Most hospitals have adjusted their costs to mitigate some of the financial hit. Even some larger systems, such as 92-hospital nonprofit Trinity Health in Michigan, have taken to measures such as laying off and furloughing workers and scaling back working hours for some of its staff. At the top of the month, Trinity announced another round of layoffs and furloughs – in addition to the 2,500 furloughs it announced in April – citing a projected $2 billion in revenue losses in fiscal year 2021, which began on June 1.

Hospitals are at the mercy of the market at the moment, and Wolfe anticipates there could be an uptick in mergers and consolidation as organizations look to partner with less cash-strapped entities. 

“Whether reorganization will work remains to be seen, but there will definitely be a fallout from this,” he said.

 

 

 

 

Appeals court rules HHS has authority to implement site-neutral payments, dealing blow to hospitals

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Dept of Health and Human Services (HHS), District Court, District Court of Appeals, Health Plan, Health System, Hospital, Hospital Industry, Lawsuit, Medicare Site Neutral Payment • Leave a comment

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Appeals court rules HHS has authority to implement site-neutral ...

A federal appeals court ruled the Department of Health and Human Services has the authority to cut Medicare payments to off-campus clinics to bring them in line with independent physician practices, reversing a lower court’s decision.

The ruling from the U.S. Court of Appeals for the District of Columbia delivered Friday strikes a major blow to the hospital industry which has been fighting HHS over the controversial rule.

The American Hospital Association (AHA) led a lawsuit against HHS arguing it did not have the statutory authority to cut payments to the off-campus, provider-based departments. HHS made the cuts in its annual hospital payments rule and the hospitals argued they were unlawful because the cuts were not budget-neutral, a requirement of the payment rule.

But the appeals court agreed with HHS that it had the authority to make the change in the payment rule because of how the law is structured.

 

 

 

 

Providence, Humana back ad campaign urging patients to stop ‘medical distancing’

Posted on by • Posted in American Hospital Association (AHA), Coronavirus, Deferred Healthcare, Emergency Care, Health System, Hospital, Hospital Industry, Marketing, Medical Distancing, Mortality, Pandemic, Physician, Primary Care, Public Health, Public Safety, Social Distancing, Telemedicine, Vaccination, Vaccine • Leave a comment

https://www.healthcaredive.com/news/providence-humana-back-ad-campaign-urging-patients-to-stop-medical-distan/581172/

Dive Brief:

  • A coalition of providers, payers and other healthcare organizations on Tuesday launched an ad campaign to encourage patients not to put off important care during the COVID-19 pandemic.
  • The announcement encourages people to continue social distancing but not “medical distancing” by putting off routine care or avoiding checking on concerning symptoms. That could be either through telemedicine or an in-person visit.
  • The campaign will be on TV, in print and across social media. The 11 organizations behind it include Providence, Humana, Baylor Scott & White, LabCorp and Walgreens.

Dive Insight:

While some hospitals in hotspots in Texas, Florida, California and Arizona have had to once again put off non-emergency procedures, providers in other areas of the country are trying to ramp up regular patient volumes as the number of positive cases eases.

Surveys show, however, that people are wary of returning to the doctor’s office, either because they worry about exposure to the novel coronavirus or have lost coverage to help pay for care.

The new ad campaign seeks to ease these concerns. No dollar figure was attached to the plan, which advertising agency MullenLowe U.S. took on pro bono. It follows an ad the American Hospital Association launched in May to ensure the public facilities are still available for non-COVID-19 care.

Since the pandemic’s onset in the United States, health officials have been concerned about the short- and long-term consequences of routine and preventive care being delayed or put off entirely. Chronic diseases that are caught early can be managed more easily and less expensively.

Also, research shows even some crucial services aren’t being sought even for issues such as strokes and heart attacks. In April, emergency room visits nationwide dropped more than 40%, according to the Centers for Disease Control and Prevention.

Public health experts are also beginning to fear vaccinations may be avoided, which could cause trouble with the upcoming flu season.

For providers the reduction in patient volumes has meant a major revenue loss. Some patient volume has been recaptured, but that rolled back again in recent weeks with hospitals in large states like Texas and Florida again reaching capacity with a COVID-19 surge.

At the end of June, hospital traffic in Arizona, New York and Texas was down week over week, according to an analysis from Jefferies.

Primary care has particularly suffered. Visits to medical offices were down nearly 60% in March and April, meaning losses to those practices could top $15 billion this year, according to a recent Health Affairs study.

The ad campaign stresses that providers have guidelines in place to keep patients safe, such as isolation of those suspected of having COVID-19 and increased virtual options.

“While we understand the fears that many people have around contracting the virus, our country’s medical facilities have adopted CDC guidelines and best practices and even telemedicine options to make your visit as safe as possible to prevent the spread of the virus,” Humana CMO William Shrank said in a statement. “The intent of the campaign is to let people know that protecting yourself against getting this virus does not need to come at the expense of your overall health.”

 

 

 

 

COVID-19 to cost hospitals $323 billion, American Hospital Association says

Posted on by • Posted in American Hospital Association (AHA), Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Recovery, Economic Stimulus, Economy Reopening, Health System, Hospital, Hospital Industry, Liquidity, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Pandemic, Reorganization, Restructure • Leave a comment

https://www.beckershospitalreview.com/finance/covid-19-to-cost-hospitals-323-billion-american-hospital-association-says.html?utm_medium=email

Catastrophic financial impact of COVID-19 expected to top $323 ...

Hospitals will lose $323.1 billion this year because of the COVID-19 pandemic, according to a new report from the American Hospital Association. 

The total includes $120.5 billion in financial losses the association predicts hospitals will see from July through December on top of $202.6 billion in losses they estimated between March and June. The losses are in large part due to lower patient volumes.

“While potentially catastrophic, these projected losses still may underrepresent the full financial losses hospitals will face in 2020, as the analysis does not account for currently increasing case rates in certain states, or potential subsequent surges of the pandemic occurring later this year,” the AHA said.

Hospitals and health systems are reporting an average decline of 19.5 percent in inpatient volume and 34.5 percent in outpatient volume when compared to baseline levels from last year. Most hospitals don’t expect to return to last year’s levels in 2020.

Read the full report here.

 

 

 

In blow to hospitals, judge rules for HHS in price transparency case

Posted on by • Posted in 2020 Election Issues, ACA, American Hospital Association (AHA), Dept of Health and Human Services (HHS), District Court of Appeals, Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Price Transparency, Rev Cycle Management, Revenue Cycle, Surprise Bills • Leave a comment

https://www.healthcaredive.com/news/in-blow-to-hospitals-judge-rules-for-hhs-in-price-transparency-case/580395/

UPDATE: June 24, 2020: The American Hospital Association said it will appeal Tuesday’s ruling  that upholds the Trump administration’s mandate to force hospitals to disclose negotiated rates with insurers. The hospital lobby said it was disappointed in the ruling and will seek expedited review. AHA said the mandate “imposes significant burdens on hospitals at a time when resources are stretched thin and need to be devoted to patient care.”

If AHA seeks to have the rule stayed pending an appellate ruling, the decision on such a request “is likely to be almost as significant as this ruling is, since absent a stay, the rule will likely go into effect before the appellate court rules,” James Burns, a law partner at Akerman, told Healthcare Dive.

Dive Brief:

  • A federal judge ruled against the American Hospital Association on Tuesday in its lawsuit attempting to block an HHS rule pushing for price transparency. The judge ruled in favor of the department, which requires hospitals to reveal private, negotiated rates with insurers beginning Jan. 1.
  • U.S. District Court Judge Carl Nichols, an appointee of President Donald Trump, was swayed neither by AHA’s argument that forcing hospitals to publicly disclose rates violates their First Amendment rights by forcing them to reveal proprietary information nor by the claim that it would chill negotiations between providers and payers. The judge characterized the First Amendment argument as “half-hearted.”
  • Nichols seem convinced that the requirement will empower patients, noting in Tuesday’s summary judgment in favor of the administration that “all of the information required to be published by the Final Rule can allow patients to make pricing comparisons between hospitals.”

Dive Insight:

The ruling is a blow for hospitals, which have been adamantly opposed to disclosing their privately negotiated rates since HHS first unveiled its proposal in July 2019. AHA did not immediately reply to a request for comment on whether it planned to appeal.

The legal debate hinges on the definition of “standard charges”, which is mentioned in the Affordable Care Act, though it was left largely undefined in the text. Trump issued an executive order last year that included negotiated rates as part of that definition.

Cynthia Fisher, founder of patienrightsadvocate.com, which filed an amicus brief in support of HHS, told Healthcare Dive on Tuesday the ruling could make shopping for health services more like buying groceries or retail.

“For the first time we will be able to know prices before we get care,” she said. “This court ruling rejects every claim to keep the secret hidden prices from consumers until after we get care.”

 

 

 

 

Hospitals tell court price transparency laws violate 1st Amendment

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Dept of Health and Human Services (HHS), District Court of Appeals, Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Price Transparency, Rev Cycle Management, Revenue Cycle, Surprise Bills • Leave a comment

https://www.healthcaredive.com/news/AHA-HHS-price-transparency-oral-arguments/577613/

Dive Brief:

  • In the first round of oral arguments in their lawsuit against HHS over a rule requiring hospitals to reveal the secret rates they negotiate with insurers for services, hospital groups argued the requirement exceeds the government’s authority and violates the First Amendment by compelling hospitals to publicly post confidential and proprietary information​.
  • The American Hospital Association, along with other industry groups and health systems that brought the lawsuit, argued in the U.S. District Court for the District of Columbia on Thursday that medical bills aren’t considered commercial speech and don’t fall under the same regulations that traditional advertisements, flyers and other forms of commercial speech offering or promoting services do.
  • “There’s not another market that looks like the market for hospital services,” said U.S. Department of Justice Attorney Michael Baer, who was representing HHS. A majority of patients final bills’ include the negotiated rate, information that should be available to patients, acting as consumers, prior to receiving care, he said.

Dive Insight:

Thursday’s hearing was the first step in what’s likely to be a drawn out legal fight. Negotiated rates between hospitals and insurers have long been private, and hospitals want to keep it that way. 

When HHS passed the final price transparency rule last year, the hospital groups filed a lawsuit in December, warning that requiring disclosure of negotiated rates will confuse patients, overwhelm hospitals and thwart competition. The rule would go into effect Jan. 1, 2021.

According to the lawsuit, the rule creates undue burden on hospitals and health systems, which can have more than 100 contracts with insurers. There can even be multiple contracts with an individual carrier to account for the various product lines, including Medicare Advantage, HMO or PPO.

The rule would require various pricing information, including gross charges, payer-specific rates, minimum and maximum negotiated charges and the amount the hospital is willing to accept in cash from a patient.

Some payers and employer groups have also protested the new rule, calling it wrong-headed.

When the rule initially passed last year, HHS argued that patients already see this pricing data when they receive their explanation of benefits, pushing back against the idea that it’s proprietary business information. They said this information needs to come before a procedure, not after.​

HHS maintains that the rule is intended to give patients better access to payment information so they can make informed decisions as consumers. 

“Patients deserve to know how much it’s going to cost when they get hospital care,” Baer said. “They deserve to know before they open a medical bill or before they choose where they want to receive care.”

 

 

 

 

42 hospitals closed, filed for bankruptcy this year

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The Local Hospital Closed. These Doctors Didn't Give Up.

From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to shut down or file for bankruptcy. At least 42 hospitals across the U.S. have closed or entered bankruptcy this year, and the financial challenges caused by the COVID-19 pandemic may force more hospitals to do the same in coming months. 

COVID-19 has created a cash crunch for many hospitals across the nation. They’re estimated to lose $200 billion between March 1 and June 30, according to a report from the American Hospital Association. More than $161 billion of the expected revenue losses will come from canceled services, including nonelective surgeries and outpatient treatment. Moody’s Investors Service said the sharp declines in revenue and cash flow caused by the suspension of elective procedures could cause more hospitals to default on their credit agreements this year than in 2019. 

Below are the provider organizations that have filed for bankruptcy or closed since Jan. 1, beginning with the most recent. They own and operate a combined 42 hospitals.

Our Lady of Bellefonte Hospital (Ashland, Ky.)
Bon Secours Mercy Health closed Our Lady of Bellefonte Hospital in Ashland, Ky., on April 30. The 214-bed hospital was originally slated to shut down in September of this year, but the timeline was moved up after employees began accepting new jobs or tendering resignations. Bon Secours cited local competition as one reason for the hospital closure. Despite efforts to help sustain hospital operations, Bon Secours was unable to “effectively operate in an environment that has multiple acute care facilities competing for the same patients, providers and services,” the health system said.

Williamson (W.Va.) Hospital
Williamson Hospital filed for Chapter 11 bankruptcy in October and was operating on thin margins for months before shutting down on April 21. The 76-bed hospital said a drop in patient volume due to the COVID-19 pandemic forced it to close. CEO Gene Preston said the decline in patient volume was “too sudden and severe” for the hospital to sustain operations.

Decatur County General Hospital (Parsons, Tenn.)
Decatur County General Hospital closed April 15, a few weeks after the local hospital board voted to shut it down. Decatur County Mayor Mike Creasy said the closure was attributable to a few factors, including rising costs, Tennessee’s lack of Medicaid expansion and broader financial challenges facing the rural healthcare system in the U.S.

Quorum Health (Brentwood, Tenn.)
Quorum Health and its 23 hospitals filed for Chapter 11 bankruptcy April 7. The company, a spinoff of Franklin, Tenn.-based Community Health Systems, said the bankruptcy filing is part of a plan to recapitalize the business and reduce its debt load.

UPMC Susquehanna Sunbury (Pa.)
UPMC Susquehanna Sunbury closed March 31. Pittsburgh-based UPMC announced plans in December to close the rural hospital, citing dwindling patient volumes. Sunbury’s population was 9,905 at the 2010 census, down more than 6 percent from 10 years earlier. Though the hospital officially closed its doors in March, it shut down its emergency department and ended inpatient services Jan. 31.

Fairmont (W.Va.) Regional Medical Center
Irvine, Calif.-based Alecto Healthcare Services closed Fairmont Regional Medical Center on March 19. Alecto announced plans in February to close the 207-bed hospital, citing financial challenges. “Our plans to reorganize some administrative functions and develop other revenue sources were insufficient to stop the financial losses at FRMC,” Fairmont Regional CEO Bob Adcock said. “Our efforts to find a buyer or new source of financing were unsuccessful.” Morgantown-based West Virginia University Medicine will open a 10-bed hospital with an emergency department at the former Fairmont Regional Medical Center by the end of June.

Sumner Community Hospital (Wellington, Kan.)
Sumner Community Hospital closed March 12 without providing notice to employees or the local community. Kansas City, Mo.-based Rural Hospital Group, which acquired the hospital in 2018, cited financial difficulties and lack of support from local physicians as reasons for the closure. “Lack of support from the local medical community was the primary reason we are having to close the hospital,” RHG said. “We regret having to make this decision; however, despite operating the hospital in the most fiscally responsible manner possible, we simply could not overcome the divide that has existed from the time we purchased the hospital until today.”

Randolph Health
Randolph Health, a single-hospital system based in Asheboro, N.C., filed for Chapter 11 bankruptcy March 6. Randolph Health leaders have taken several steps in recent years to improve the health system’s financial picture, and they’ve made progress toward that goal. Entering Chapter 11 bankruptcy will allow Randolph Health to restructure its debt, which officials said is necessary to ensure the health system continues to provide care for many more years.

Pickens County Medical Center (Carrollton, Ala.)
Pickens County Medical Center closed March 6. Hospital leaders said the closure was attributable to the hospital’s unsustainable financial position. A news release announcing the closure specifically cited reduced federal funding, lower reimbursement from commercial payers and declining patient visits.

The Medical Center at Elizabeth Place (Dayton, Ohio)
The Medical Center at Elizabeth Place, a 12-bed hospital owned by physicians in Dayton, Ohio, closed March 5. The closure came after years of financial problems. In January 2019, the Medical Center at Elizabeth Place lost its certification as a hospital, meaning it couldn’t bill Medicare or Medicaid for services. Sixty to 65 percent of the hospital’s patients were covered through the federal programs.

Mayo Clinic Health System-Springfield (Minn.)
Mayo Clinic Health System closed its hospital in Springfield, Minn., on March 1. Mayo announced plans in December to close the hospital and its clinics in Springfield and Lamberton, Minn. At that time, James Hebl, MD, regional vice president of Mayo Clinic Health System, said the facilities faced staffing challenges, dwindling patient volumes and other issues. The hospital in Springfield is one of eight hospitals within a less than 40-mile radius, which has led to declining admissions and low use of the emergency department, Dr. Hebl said.

Faith Community Health System
Faith Community Health System, a single-hospital system based in Jacksboro, Texas and part of the Jack County (Texas) Hospital District, first entered Chapter 9 bankruptcy — a bankruptcy proceeding that offers distressed municipalities protection from creditors while a repayment plan is negotiated — in February. The bankruptcy court dismissed the case May 26 at the request of the health system. The health system asked the court to dismiss the bankruptcy case to allow it to apply for a Paycheck Protection Program loan through a Small Business Association lender. On June 11, Faith Community Health System reentered Chapter 9 bankruptcy.

Pinnacle Healthcare System
Overland Park, Kan.-based Pinnacle Healthcare System and its hospitals in Missouri and Kansas filed for Chapter 11 bankruptcy on Feb. 12. Pinnacle Regional Hospital in Boonville, Mo., formerly known as Cooper County Memorial Hospital, entered bankruptcy about a month after it abruptly shut down. Pinnacle Regional Hospital in Overland Park, formerly called Blue Valley Hospital, closed about two months after entering bankruptcy.

Central Hospital of Bowie (Texas)
Central Hospital of Bowie abruptly closed Feb. 4. Hospital officials said the facility was shut down to enable them to restructure the business. Hospital leaders voluntarily surrendered the license for Central Hospital of Bowie.

Ellwood City (Pa.) Medical Center
Ellwood City Medical Center officially closed Jan. 31. The hospital was operating under a provisional license in November when the Pennsylvania Department of Health ordered it to suspend inpatient and emergency services due to serious violations, including failure to pay employees and the inability to offer surgical services. The hospital’s owner, Americore Health, suspended all clinical services at Ellwood City Medical Center Dec. 10. At that time, hospital officials said they hoped to reopen the facility in January. Plans to reopen were halted Jan. 3 after the health department conducted an onsite inspection and determined the hospital “had not shown its suitability to resume providing any health care services.”

Thomas Health (South Charleston, W.Va.)
Thomas Health and its two hospitals filed for Chapter 11 bankruptcy on Jan. 10. In an affidavit filed in the bankruptcy case, Thomas Health President and CEO Daniel J. Lauffer cited several reasons the health system is facing financial challenges, including reduced reimbursement rates and patient outmigration. The health system announced June 18 that it reached an agreement in principle with a new capital partner that would allow it to emerge from bankruptcy.

St. Vincent Medical Center (Los Angeles)
St. Vincent Medical Center closed in January, roughly three weeks after El Segundo, Calif.-based Verity Health announced plans to shut down the 366-bed hospital. Verity, a nonprofit health system that entered Chapter 11 bankruptcy in 2018, shut down St. Vincent after a deal to sell four of its hospitals fell through. In April, Patrick Soon-Shiong, MD, the billionaire owner of the Los Angeles Times, purchased St. Vincent out of bankruptcy for $135 million.

Astria Regional Medical Center (Yakima, Wash.)
Astria Regional Medical Center filed for Chapter 11 bankruptcy in May 2019 and closed in January. When the hospital closed, 463 employees lost their jobs. Attorneys representing Astria Health said the closure of Astria Regional Medical Center, which has lost $40 million since 2017, puts Astria Health in a better financial position. “As a result of the closure … the rest of the system’s cash flows will be sufficient to safely operate patient care operations and facilities and maintain administrative solvency of the estate,” states a status report filed Jan. 20 with the bankruptcy court.