Jobless claims spike to another weekly record amid coronavirus crisis

Jobless claims spike to 6.6 million, another weekly record amid ...

6.6 million people filed for unemployment last week, a staggering number that eclipses the record set just days ago amid the coronavirus pandemic, according to government data released Thursday.

Why it matters: Efforts to contain the outbreak are continuing to create a jobs crisis, causing the sharpest spikes in unemployment filings in American history.

  • The colossal number of unemployment filings is worse than most Wall Street banks were expecting.

The big picture: Nearly 10 million Americans have filed for unemployment claims in recent weeks, as businesses around the country shut down in response to the pandemic.

  • But the data lags by a week, so it’s almost certain labor departments around the country are still processing claims and people are still applying.




Fifth Circuit Appeals Court Strikes Down the Affordable Care Act’s Individual Mandate

The Fallout from Texas v. U.S.:

Yesterday, a three-judge panel from the Fifth Circuit Court of Appeals struck down the Affordable Care Act (ACA)’s individual mandate. The judges agreed with a lower court decision issued in the case, Texas v. U.S., in December 2018 that the individual mandate is unconstitutional but, unlike the lower court, did not decide that the rest of the ACA is also unconstitutional. Instead, the judges remanded, or sent back, the decision to the same lower court judge to consider. California Attorney General Xavier Becerra, who is leading the 21 Democratic state attorneys general defending the law, along with the U.S. House of Representatives, immediately announced he would appeal the decision to the Supreme Court.

Whether the Supreme Court will decide to take the case now or wait for the decision of Judge O’Connor’s, of the lower court, is uncertain. If the Court decides to take the case now, they could expedite the briefing process and issue a decision in 2020. If it does not take the case now, a ruling will be delayed until after the 2020 presidential election.

No one knows how the Supreme Court will ultimately rule. But we do know that if the Court decides to strike down the ACA, the human toll will be immense and tragic. The law has granted unprecedented health security to millions:

  • 18.2 million formerly uninsured people have gained coverage since 2010
  • 53.8 million Americans with preexisting health conditions are now protected
  • 12.7 million low-income people are insured through expanded Medicaid
  • 10.6 million people have coverage through the ACA marketplaces, 9.3 million of whom receive tax credits to help them pay their premiums
  • 5.5 million young adults have gained coverage, many by staying on their parents’ plans
  • 45 million Medicare beneficiaries have much better drug coverage.

Such a decision will also trigger massive disruption throughout the U.S. health system. The health care industry represents nearly 20 percent of the nation’s economy; the ACA has touched every corner of it. The law restructured the individual and small-group health insurance markets, expanded and streamlined the Medicaid program, improved Medicare benefits, and reformed the way Medicare pays doctors, hospitals, and other providers. It was a catalyst for the movement toward value-based care and established a regulatory pathway for biosimilars — less expensive versions of biologic drugs. States have rewritten laws to incorporate the ACA’s provisions. Insurers, hospitals, physicians, and state and local governments have invested billions of dollars in adjusting to these changes.

The law’s popular preexisting health condition protections have made it possible for people with minor-to-serious health problems to apply for coverage in the same way healthier people have always done. These protections have given the estimated 53.8 million Americans with preexisting health conditions the peace of mind that they will never be denied health insurance because of their health.

More than 150 million people who get coverage through their employers now are eligible for free preventive care, and their children can stay on their policies to age 26.

The wide racial and income inequities in health insurance coverage that have been partly remedied by the ACA would return. Hospitals and providers, especially safety-net institutions, would struggle with mounting uncompensated care burdens and sicker and more costly patients who are not receiving the preventive care they need.

The ACA tore down financial barriers to health care for millions, many of whom were uninsured for most of their lives. It has demonstrably helped people get the health care they need in states across the country. Research indicates that Medicaid expansion has led to improved health status and lower mortality risk.

To date, neither the Trump administration, which has sided with the plaintiffs in the case, nor its Republican colleagues in Congress have offered a replacement plan in the event the law is struck down. The historic progress made by Americans, particularly those with middle and lower incomes and people of color, could unravel. Voters are already telling policymakers they are worried about their ability to afford health care. Yesterday’s decision and the uncertain path forward to the Supreme Court is certain to escalate those worries. With the nation entering the 2020 presidential election year, the Supreme Court may decide to take up the case this term.



Benefit design, higher deductibles will increase bad debt for hospitals

Legislative proposals could reduce bad debt, but would likely introduce additional complexity to billing processes.

Changes in insurance benefit design that shift greater financial responsibility to the patient, rising healthcare costs and confusing medical bills will continue to drive growth in bad debt — often faster than net patient revenue, according to a new report from Moody’s.

Legislative proposals to simplify billing have the potential to reduce bad debt, but the downside for hospitals is that they’ll likely introduce additional complexity to billing processes and complicate relationships with contracted physician groups. A recent accounting change will reduce transparency around reporting bad debt.

Higher cost sharing and rising deductibles are the main contributors to the trend of patients assuming greater financial responsibility, a trend that’s been occurring for more than a decade, and that will further increase the amount of uncollected payments. Hospitals and providers are responsible for collecting copays and deductibles from patients, which may not always be possible at the time of service; the longer the delay between providing service and collecting payment, the less likely a hospital is to collect payment.

On top of that, the higher an individual’s deductible is, the greater the share of reimbursement that a hospital has to collect. The prevalence of general deductibles increased to 85% of covered workers in 2018, up from 55% in 2006, and the amount of the annual deductible almost tripled in that time to an average of $1,573.

Multiple factors are driving the trend toward higher cost sharing, including a desire among employees and employers for stable premium growth despite steadily rising healthcare costs and the growing popularity of high deductible health plans.


Hospitals face an uphill battle when it comes to reducing bad debt. Strategies include point-of-service collections, enhanced technology to better estimate a patient’s responsibility for a medical bill, and offering low-cost financing or payment plans.

A common feature of these approaches is educating patients about what portion of a medical bill is their responsibility, after taking into account the specifics of their insurance plan. But hospitals often find it hard to provide reliable cost estimates for a given service, which can thwart efforts to provide patients with an accurate estimate of their financial responsibility.

One difficulty is that medical bills partly depend on the complexity of service and amount of resources consumed — which may not be known ahead of time. There’s also the need to incorporate specific benefits of the patient’s own insurance plan. A certain amount of bad debt is likely to arise from patients accessing emergency care given the insufficient time to determine insurance coverage.

Another difficulty in billing is surprise medical bills, received by insured patients who inadvertently receive care from providers outside their insurance networks, usually in emergency situations. While the term “surprise medical bills” refers to a specific, narrow slice of healthcare costs, they have become part of the broader debate about the affordability and accessibility of U.S. healthcare.


To minimize surprise bills, Congress is considering proposals to essentially “bundle” all of the services a patient receives in an emergency room into a single bill. Under a bundled billing approach, the hospital would negotiate a set charges for a single or “bundled” episode of care in the emergency room. The hospital would then allocate payments to the providers involved.

This approach, which major hospital and physician trade groups oppose, has the potential to significantly affect hospitals and disrupt the business models of physician staffing companies, according to Moody’s. Many hospitals outsource the operations and billing of their emergency rooms or other departments to staffing companies. Bundling services would require a change in the contractual relationship between hospitals and staffing companies.

Another recent proposal in Congress would require in-network hospitals to guarantee that all providers operating at their facilities are also in network. This approach adds significant complexity because many physicians and ancillary service providers are not employed or controlled by the hospitals where they work. Some hospitals would likely seek to employ more physicians, leading to increases in salaries, benefits and wages expense.


Paying for healthcare shouldn’t bankrupt families

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Healthcare costs in the U.S. are too high. Americans struggle to afford basic needs like prescription drugs and too often face crushing surprise bills after undergoing necessary medical procedures. Seniors in particular feel the weight of health expenses when they discover that the Medicare benefits they earned don’t always provide sufficient coverage.

While the Affordable Care Act instituted protections for Americans with pre-existing conditions, guaranteed essential health benefits and made some progress in lowering patients’ costs, those advancements are under attack in the courts and through regulatory actions. I chair the House Ways and Means Committee, which has jurisdiction over a great deal of our nation’s healthcare system, including Medicare. Under Democratic leadership, we are fighting to bring down healthcare costs and preserve critical existing health protections.

Our committee hit the ground running this year. The first hearing I convened as chairman focused on protecting Americans with pre-existing conditions. Nearly 130 million Americans have a pre-existing condition—anything from asthma to cancer to diabetes. Thanks to the ACA, insurance companies can no longer refuse to cover these individuals. The hearing shed light on the importance of this safeguard and the ways it provides Americans with greater peace of mind and financial security.

We also highlighted the immense pain families will endure if 18 Republican state attorneys general succeed in their case to repeal the law.

House Democrats, along with Democratic state attorneys general, jumped into this court battle and continue to defend the millions of Americans with health conditions from discrimination and financial ruin.

We also took concrete steps to increase transparency and lower drug prices. Ways and Means advanced legislation that sheds light across the healthcare supply chain—from pharmaceutical manufacturers to pharmacy benefit managers—to help reduce costs for families. More can be done. In the coming months, the committee will consider legislation to improve the Medicare Part D program, establishing an out-of-pocket cap on expenses for beneficiaries. This would lower costs for seniors and save taxpayers money.

Part D reform is just one way to improve Medicare for beneficiaries. Many seniors aren’t aware that Medicare does not cover routine vision, hearing or dental exams. I will work to change that. Helping seniors access the glasses, hearing aids or dental care they need will save them money on the front end. This coverage will also prevent the trauma and expense of falls or other related health problems that could arise down the road as a result of inadequate services.

Some of the most jarring and devastating medical costs Americans encounter are surprise medical bills. Ways and Means plans to tackle this problem too. We are crafting legislation now that will help patients avoid the huge expenses that follow inadvertently being treated by out-of-network providers.

Healthcare is a necessity and it’s a human right. Paying for it shouldn’t bankrupt families. We can lower patient costs without stifling medical innovation or throwing hospitals into turmoil. It’s possible to achieve commonsense solutions that strengthen our nation’s healthcare system while reducing the burden on consumers.


Many Americans clueless about out-of-pocket medical costs, study finds

Image result for cartoon clueless on out-of-pocket medical costs

When it comes to out-of-pocket medical costs, many people are unaware of their potential financial burden, according to a new study released by Discover Personal Loans, a provider of banking tools and resources across various financing options.

For the study, researchers examined the average cost of certain medical procedures and compared them to perceptions of costs from 969 surveyed U.S. residents.

Four takeaways from the study:

1. Researchers found that a three-day hospitalization, knee replacement surgery and an appendectomy had the greatest variation of average actual costs compared to average perceived costs.

2. For example, surveyed Americans perceived the average cost of a three-day hospitalization to be $11,013, while the actual average cost posted on is about $30,000. That’s a variation of 63 percent.

3. The variation between average actual cost and average perceived cost for a knee replacement surgery and an appendectomy were 34 percent and 32 percent, respectively.

4. Surveyed Americans anticipate spending $2,016 for an emergency room visit, up 5 percent from the average actual cost from the Health Care Cost Institute and cited by CNN, $1,917.

Read more about the study here.




Recession could come in 6 to 9 months, Morgan Stanley says

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Recent moves from President Donald Trump to raise tariffs on Chinese goods are leading the global economy closer to the brink of recession, according to a Morgan Stanley note cited by Newsweek.

In a recent research note, Morgan Stanley said if President Trump goes through with proposals to raise existing tariffs and China responds, the global economy would fall into recession in the next six to nine months. Specifically, Morgan Stanley’s U.S. public policy lead, Michael Zezas, said the tariffs would be what pushes the global economy into recession.

“Friday’s escalation of tariffs between the U.S. and China suggests they’ve not moved any closer on the key negotiation points that have separated them since May 5,” he said, according to Newsweek. “Neither side sees the benefit to cooperating as better than hanging tough. … We expect that tensions will continue to escalate at least until the costs of doing so are too big to ignore.”

The president said Aug. 23 that he plans to raise existing tariffs to 30 percent from 25 percent on $250 billion of Chinese goods starting Oct. 1. Additionally, he proposed tariffs on another $300 billion of Chinese imports to increase from 10 percent to 15 percent over the coming months. The president’s proposals come after China said it will impose tariffs on another $75 billion of U.S. imports, and that it would reinstate tariffs on auto products that were previously suspended.

Read more here.




Piedmont now requires 25% advance payment for self-pay patients

Piedmont Healthcare is taking a bold approach in its fight against bad debt: The not-for-profit health system now requires patients who’ll be on the hook for the entirety of their bill to pay one-quarter of it before they can receive non-emergent services.

Atlanta-based Piedmont launched the advance payment policy this month. It requires uninsured, self-pay patients and those with high-deductible commercial policies to pay 25% of their bill before they can receive services.

“To move to point-of-service collections is a big shift,” said Joseph Fifer, CEO of the Healthcare Financial Management Association. “To do it even beforehand, that’s even a bigger movement, given where we’re starting from.”

Leaders from Piedmont’s revenue-cycle team told Modern Healthcare in an interview at the HFMA’s annual conference in Orlando, Fla., that the new policy is the latest phase in what has been five years of improved patient education around out-of-pocket costs, including sending patients price estimates—even if patients didn’t ask for them—prior to almost all services.

But they acknowledge not everyone will welcome the change.

“As much as people in healthcare want transparency, they get uncomfortable when you start talking about requirements for things, because requirements mean that a patient may hear ‘no’ to their healthcare,” said Andrea Mejia, Piedmont’s executive director of patient financial care and revenue cycle, “so that gets controversial.”

Like many of its peers, 11-hospital Piedmont shoulders a heavy bad-debt load, or bills that go unpaid that the system expected to be paid, as health insurers increasingly require patients to foot bigger portions of their bills.

The health system’s $250.7 million bad-debt expense in fiscal 2018 was about 8% of its $3 billion in revenue that year—up from 6.5% of revenue the prior year and much higher than the 2% national average the American Hospital Directory calculated in 2017.

Not-for-profit hospitals’ bad debt is projected to increase at least 8% this year as the high-deductible health plan trend continues, according to Moody’s Investors Service.

Requiring upfront payment is relatively common at physician practices. Some hospitals likely employ the tactic, too, but they’re unlikely to publicize such policies, said Jonathan Wiik, healthcare strategy principal with TransUnion Healthcare.

The HFMA’s Fifer said he couldn’t think of examples of other health systems that have implemented blanket pre-pay policies like Piedmont’s, and said he doesn’t think it’s prevalent.

He called it a “major shift” in an industry that’s long been too focused on back-end collection.

UPMC in Pittsburgh earlier this month scrapped its plan to seek pre-payment from out-of-network Highmark Medicare Advantage members once the academic health system’s consent decrees with Highmark end on June 30.

Effect on access

Piedmont’s Mejia said the policy’s potential to dissuade patients from receiving necessary care for serious conditions is “a very legitimate concern.”

The policy raises red flags, said Berneta Haynes, senior director of policy and access with the consumer advocacy group Georgia Watch. She said she fears it could hamper access to care and take away patients’ ability to negotiate. “It does have the potential to become a real impediment for folks seeking healthcare,” she said.

It’s not unheard of for hospitals to create pre-payment rules, said Mark Rukavina, business development manager in Community Catalyst’s Center for Consumer Engagement in Health Innovation. When they do, leaders need to ensure the rules don’t create barriers to care. That means screening for financial assistance, informing patients of the financial assistance policy and making exceptions when necessary, such as for cancer patients.

“These kinds of payments, especially if you’re dealing with larger bills, are certainly going to have a chilling effect on people and their willingness or ability to access care,” Rukavina said.

Brian Unell, Piedmont’s vice president of revenue cycle, said the new advance payment policy allows Piedmont’s physicians to escalate cases to administration in situations where patients need care urgently, such as for cancer treatment.

“That’s been the biggest lesson learned so far and pushback we’ve gotten,” he said.

There’s currently no ceiling amount on what patients could be forced to pay before receiving services, but Unell said the system would probably make an exception if 25% ended up being $2,500, for example. Piedmont discounts its billed charges by 70% for self-pay patients.

Final step in collections

The new policy is the third in a three-phase collection policy Piedmont has implemented since late 2017. The first phase was 15% pre-pay requirement for walk-in visits, including lab tests and X-rays. It did not apply to the system’s urgent-care clinics. Officials said they wanted to implement the policy in few facilities. The second phase expanded the 15% requirement to scheduled services like surgeries.

For policies like Piedmont’s to be successful, they need to have very good relationships with their referring physicians, TransUnion’s Wiik said. The rub tends to enter when physicians argue that their patients aren’t getting medically necessary services, he said.

In Piedmont’s case, the policy also has the unintended effect of competing with its physicians, some of whom have their own pre-payment policies, Unell said.

Wiik argues that if patients were truly unable to pay the bill, the hospital’s financial assistance policy or Medicaid eligibility would kick in.

“Do you have an inability or an unwillingness to pay?” he said. “There’s a difference.”

Policies like Piedmont’s can be tricky, but the benefit is that they find patients who really can pay who may not have otherwise paid, Wiik said.

While one goal of Piedmont’s policy is probably cash flow, the HFMA’s Fifer said his hunch is the primary driver is engaging patients in a conversation about financial responsibility.

Piedmont has increased its same-store, upfront collections by about 500% since 2014 thanks to revenue cycle improvements it has made in that time, Unell said. The health system has also expanded its back-end patient financing options, including moving more toward monthly payments. The system does not offer discounts to patients who agree to pay in a lump sum right away.

Unell described Piedmont’s revenue-cycle work as a journey, and said the system is constantly evolving based on new information.

“None of this is easy,” Unell said, “and by no means do we have it figured out.”