Category Archives: Center for Medicare and Medicaid Services (CMS)

OPPS Rule to Update Outpatient Payments, Hospital Price Transparency

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CMS proposes in the Outpatient Prospective Payment (OPPS) rule to increase Medicare outpatient payments by 2.8 percent next year while bolstering hospital price transparency enforcement.

The OPPS rule states that payment rates for hospitals that meet applicable quality reporting requirements will increase in 2024 based on the projected market basket percentage increase of 3.0 percent, less 0.2 percentage points for the productivity adjustment.

Meanwhile, ambulatory surgical centers (ASCs) would also see a 2.8 percent increase in payment rates next year under the proposed ASC rule that was released alongside the OPPS rule.

CMS also proposes to continue using the productivity-adjusted hospital market basket update to ASC payment system rates for another two years despite plans to shift away from the system as hospital procedures shift to ASC settings. But disruptions to care patterns during the COVID-19 pandemic have prompted CMS to extend the application of the hospital market basket update.

The OPPS and ASC proposed rules also include a new benefit category for Medicare beneficiaries who require more frequent services than individual outpatient therapy visits but less intensive services than a partial hospitalization program. The benefit would be the Intensive Outpatient Program and include its own payment and program requirements for services across various settings, including hospital outpatient departments, community mental health centers, and federally qualified health centers.

Starting next year, CMS also proposes establishing payment for intensive outpatient program services as part of Opioid Treatment Programs. These intensive behavioral health services are available for individuals with mental health conditions and substance use disorders.

Other payment policies proposed in the rule include an update to Medicare payment rates for partial hospitalization program services, remote mental health services, and OPPS and ASC dental services, as well as changes to community mental health center Conditions of Participation (CoPs). The proposed rule also contains updates to the 340B payment rate, which CMS proposed to remedy via previous rulemaking to return improper payments to eligible hospitals.

“This proposed rule reflects CMS’ commitment to ensure Medicare is comprehensive in its ability to address patient needs, filling gaps in the health care system including behavioral health,” Meena Seshamani, MD, Deputy Administrator and Director for CMS’ Center for Medicare, said in a statement. “Through these proposals, we will ensure people get timely access to quality care in their communities, leading to improved outcomes and better health.”

HOSPITAL PRICE TRANSPARENCY CHANGES ON HORIZON

In addition to payment updates, the OPPS proposed rule also includes extensive updates to hospital price transparency requirements to increase compliance and enforcement.

Previous OPPS rules have required hospitals to make standard charges, including payer-specific negotiated rates, available to the public in a machine-readable file on their websites and through a more patient-friendly list of shoppable services. Hospitals face financial penalties of up to $2 million if they do not comply with the requirements.

However, a recent website assessment conducted by CMS found that about 70 percent of hospitals were fully meeting display criteria for the machine-readable file, 27 percent were partially meeting display criteria, and just 3 percent failed to post any required pricing data online by the fall of 2022. The rates improved from a previous compliance assessment in early 2021 when 30 percent of hospitals did not publish the required pricing data.

However, the latest OPPS rule aims to increase compliance by altering enforcement actions. For example, the rule would allow CMS to require an authorized hospital official to certify the accuracy and completeness of the data in the machine-readable file. Hospitals may also have to submit additional documentation to determine hospital compliance and an acknowledgment of receipt of the warning notice if CMS deems them out of compliance.

If CMS has to take action to address noncompliance, CMS may also notify the hospital’s health system leadership of the issue and work with the health system to address compliance issues across its system.

Finally, CMS proposes to publicize a hospital’s assessment of compliance, any compliance actions taken against a hospital, and notifications sent to health system leadership.

Additionally, the OPPS rule would update hospital price transparency requirements, requiring hospitals to display the required pricing data using a CMS template versus any machine-readable file format. Pricing data would also have to be encoded in a CSV or JSON format using a CMS template layout and other specified technical instructions.

CMS aims to increase machine-readable file accessibility by proposing a requirement to place a “footer” at the bottom of a hospital’s homepage that links to the webpage with the pricing data. Hospitals would also have to ensure that a .txt file is included in the root folder of the publicly available website chosen by the hospital for posting its machine-readable format.

Healthcare stakeholders can comment on the OPPS and ASC proposed rules through September 11th. CMS expects to release the final rules in November.

CMS proposes $9B repayment to 340B hospital participants

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Dept of Health and Human Services (HHS), District Court, District Court of Appeals, Health System, Hospital, Hospital Industry, Medicare 340B Drug Discount Program, Medicare Budget Neutrality, Medicare Reimbursement, Supreme Court • Leave a comment

https://mailchi.mp/cc1fe752f93c/the-weekly-gist-july-14-2023?e=d1e747d2d8

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) issued a proposal to remedy its four years of payment cuts to the more than 1,600 hospitals participating in the 340B Drug Pricing Program through one-time, lump-sum payments that will total roughly $9B. 

In 2018, CMS reduced drug reimbursement to 340B covered-entity hospitals by nearly 30 percent, in an attempt to align reimbursement with hospitals’ actual drug acquisition costs. The Supreme Court overturned those cuts in 2022, ruling that the Department of Health and Human Services (HHS) had violated rulemaking procedure. As CMS rulemaking on Medicare payment must be budget-neutral, the agency will offset the remedy payments with a 0.5 percent cut to all hospitals for non-drug items and services covered under the Hospital Outpatient Prospective Payment System (OPPS) over the next 16 years. Stakeholders have until September 5th to comment on the proposed rule. Once the final rule is published later this year, CMS plans to repay 340B participant hospitals within 60 days of their application for remedy.

The Gist: After worries about how last year’s Supreme Court ruling would be implemented, 340B participant hospitals will be relieved to receive their payment corrections up front instead of over time, especially given current margin challenges.

But while this issue is now set to be resolved, other critical decisions about the 340B program’s fate are pending before courts. Earlier this year, Bayer and EMD Serono became the 20th and 21st drugmakers to restrict discounts to contract pharmacies, following an appellate court decision in January that sided with the pharmaceutical manufacturers.

Meanwhile, appellate courts in other jurisdictions are set to hear at least two more cases on the issue, amid conflicting rulings about whether HHS can enforce contract pharmacy discounts.

Rural hospital closures rising again with end of COVID aid

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Financial Instability, Financial Reserves, Financial Stewardship, Financial Strength, Financial Viability, Financially Distressed, Hospital Bankruptcy, Hospital Closure, Innovation, Innovative Care Models, Rural Health, Rural Hospital • Leave a comment

https://mailchi.mp/7f59f737680b/the-weekly-gist-june-30-2023?e=d1e747d2d8

After a brief reprieve thanks to COVID relief funds, rural hospital closures are once again on the rise, with 11 facilities already closing in the first half of this year. 

More rural facilities have already closed in 2023 than the previous two years combined, and this year is on pace to be the second-highest number of rural hospital beds lost since 2005. 

And the majority of rural hospitals that haven’t closed are experiencing negative operating margins, with almost one in three at immediate or high risk of closure due to declining volumes, shifting payer mix, and increased labor and supply costs.

Leaders at rural hospitals now face difficult decisions including drastically cutting services, merging with a larger system, or closing their doors altogether. The Centers for Medicare and Medicaid Services (CMS) launched the Rural Emergency Hospital Program recently, designed to financially support small rural hospitals that convert to providing emergency services only, but so far program uptake has been limited. 

While efforts to prop up hospitals will help to sustain access to care in the near term, rural communities ultimately need a new model for care, with reimagined facilities, supported by enhanced virtual connections to specialists and higher-acuity services.

FDA advisers endorse experimental Alzheimer’s drug, Leqembi

Posted on by • Posted in Alzheimer Drug, Center for Medicare and Medicaid Services (CMS), Cognitive Decline, Food and Drug Administration (FDA), Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, Leqembi, Memory Care, Memory Treatment Center, Out of Pocket Expenses • Leave a comment

https://mailchi.mp/edda78bd2a5a/the-weekly-gist-june-23-2023?e=d1e747d2d8

This month, a panel of expert advisers recommended the Food and Drug Administration (FDA) grant full approval to Leqembi, a drug developed by Eisai and Biogen that targets amyloid plaques in the brain that are linked to the development of Alzheimer’s.

The drug was found to slow cognitive decline in patients by 27 percent over 18 months, though not without some serious side effects, including brain swelling and bleeding. While Leqembi received accelerated FDA approval in January 2023, it is now likely to become the first Alzheimer’s drug that slows the progression of the disease to secure full FDA approval. The Centers for Medicare and Medicaid Services (CMS) recently announced that it intends to cover this new class of Alzheimer’s drugs, as long as prescribing physicians participate in patient registries designed to continue collecting data about the drugs and their efficacy. The FDA is expected to make a final decision on Leqembi by early July. 

The Gist: In addition to risks of patient harm, much of the controversy around Leqembi surrounds its $27K list price. Payers, especially Medicare, are worried that it will balloon spending while exposing patients to unaffordable cost-sharing.

With the number of Americans diagnosed annually with Alzheimer’s and other dementias projected to double by 2050, Leqembi has the potential both to help millions and to drive unsustainable spending patterns, and it will be difficult to achieve the former without the latter.

But with full approval likely, a coming frenzy of investor activity to launch memory treatment centers for drug infusion services, capitalizing on the expected huge demand for the drug, seems inevitable.

The Glaring Disconnect between the Fed and CMS

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Federal Reserve, Fee for Service Reimbursement, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Inflation, Medicaid, Medicare, Medicare Advantage, Medicare Part D, Physician, Population Distribution, Population Growth, Prescription Drugs, Price Transparency, Value-Based Healthcare • Leave a comment
The Glaring Disconnect between the Fed and CMS

Two important reports released last Wednesday point to a disconnect in how policymakers are managing the U.S. economy and how the health economy fits.

Report One: The Federal Reserve Open Market Meeting

At its meeting last week, the Governors of the Federal Open Market Committee (FOMC) voted unanimously to keep the target range for the federal funds rate at 5% to 5.25%–the first time since last March that the Fed has concluded a policy meeting without raising interest rates.

In its statement by Chairman Powell, the central bank left open the possibility of additional rate hikes this year which means interest rates could hit 5.6% before trending slightly lower in 2024.

In conjunction with the (FOMC) meeting, meeting participants submitted projections of the most likely outcomes for each year from 2023 to 2025 and over the longer run:

Median202320242025Longer RunLonger Run Range
% Change in GDP1.11.11.81.81.6-2.5
Unemployment rate &4.14.54.54.03.6-4.4
PCE Inflation rate3.22.52.12.02.0
Core PCE Inflation3.92.62.2**

*Longer-run projections for core PCE inflation are not collected.

Notes re: the Fed’s projections based on these indicators:

  • The GDP (a measure of economic growth) is expected to increase 1% more this year than anticipated in its March 2023 analysis while estimates for 2024 were lowered just slightly by 0.1%. Economic growth will continue but at a slower pace.
  • The unemployment rate is expected to increase to 4.1% by the end of 2023, a smaller rise in joblessness than the previous estimate of 4.5%. (As of May, the unemployment rate was 3.7%). Unemployment is returning to normalcy impacting the labor supply and wages.
  • inflation: as measured by the Personal Consumption Expenditures index, will be 3.2% at the end of 2023 vs. 3.3% they previously projected. By the end of 2024, it expects inflation will be 2.5% reaching 2.1% at the end of 2025. Its 2.0% target is within reach on or after 2025 barring unforeseen circumstances.
  • Core inflation projections, which excludes energy and food prices, increased: the Fed now anticipates 3.9% by the end of 2023–0.3% above the March estimate. Price concerns will continue among consumers.

Based on these projections, two conclusions about nation’s monetary policy may be deduced the Fed’s report and discussion:

  • The Fed is cautiously optimistic about the U.S. economy in for the near term (through 2025) while acknowledging uncertainty exists.
  • Interest rates will continue to increase but at a slower rate than 2022 making borrowing and operating costs higher and creditworthiness might also be under more pressure.

Report Two: CMS

On the same day as the Fed meeting, the actuaries at the Centers for Medicare and Medicaid Services (CMS) released their projections for overall U.S. national healthcare spending for the next several years:

“CMS projects that over 2022-2031, average annual growth in NHE (5.4%) will outpace average annual growth in gross domestic product (GDP) (4.6%), resulting in an increase in the health spending share of GDP from 18.3% in 2021 to 19.6% in 2031. The insured percentage of the population is projected to have reached a historic high of 92.3% in 2022 (due to high Medicaid enrollment and gains in Marketplace coverage). It is expected to remain at that rate through 2023. Given the expiration of the Medicaid continuous enrollment condition on March 31, 2023 and the resumption of Medicaid redeterminations, Medicaid enrollment is projected to fall over 2023-2025, most notably in 2024, with an expected net loss in enrollment of 8 million beneficiaries. If current law provisions in the Affordable Care Act are allowed to expire at the end of 2025, the insured share of the population is projected to be 91.2%.  In 2031, the insured share of the population is projected to be 90.5%, similar to pre-pandemic levels.”

The report includes CMS’ assumptions for 4 major payer categories:

  • Medicare Part D: Several provisions from the Inflation Reduction Act (IRA) are expected to result in out-of-pocket savings for individuals enrolled in Medicare Part D. These provisions have notable effects on the growth rates for total out-of-pocket spending for prescription drugs, which are projected to decline by 5.9% in 2024, 4.2% in 2025, and 0.2% in 2026.
  • Medicare: Average annual expenditure growth of 7.5% is projected for Medicare over 2022-2031. In 2022, the combination of fee-for-service beneficiaries utilizing emergent hospital care at lower rates and the reinstatement of payment rate cuts associated with the Medicare Sequester Relief Act of 2022 resulted in slower Medicare spending growth of 4.8% (down from 8.4% in 2021).
  • Medicaid: On average, over 2022-2031, Medicaid expenditures are projected to grow by 5.0%. With the end of the continuous enrollment condition in 2023, Medicaid enrollment is projected to decline over 2023-2025, with most of the net loss in enrollment (8 million) occurring in 2024 as states resume annual Medicaid redeterminations. Medicaid enrollment is expected to increase and average less than 1% through 2031, with average expenditure growth of 5.6% over 2025-2031.
  • Private Health Insurance: Over 2022-2031, private health insurance spending growth is projected to average 5.4%. Despite faster growth in private health insurance enrollment in 2022 (led by increases in Marketplace enrollment related to the American Rescue Plan Act’s subsidies), private health insurance expenditures are expected to have risen 3.0% (compared to 5.8% in 2021) due to lower utilization growth, especially for hospital services.

And for the 3 major recipient/payee categories:

  • Hospitals: Over 2022-2031, hospital spending growth is expected to average 5.8% annually. In 2023, faster growth in hospital utilization rates and accelerating growth in hospital prices (related to economy wide inflation and rising labor costs) are expected to lead to faster hospital spending growth of 9.3%.  For 2025-2031, hospital spending trends are expected to normalize (with projected average annual growth of 6.1%) as there is a transition away from pandemic public health emergency funding impacts on spending.
  • Physicians and Clinical Services: Growth in physician and clinical services spending is projected to average 5.3% over 2022-2031. An expected deceleration in growth in 2022, to 2.4% from 5.6% in 2021, reflects slowing growth in the use of services following the pandemic-driven rebound in use in 2021. For 2025-2031, average spending growth for physician and clinical services is projected to be 5.7%, with an expectation that average Medicare spending growth (8.1%) for these services will exceed that of average Private Health Insurance growth (4.6%) partly as a result of comparatively faster growth in Medicare enrollment.
  • Prescription Drugs: Total expenditures for retail prescription drugs are projected to grow at an average annual rate of 4.6% over 2022-2031. For 2025-2031, total spending growth on prescription drugs is projected to average 4.8%, reflecting the net effects of key IRA provisions: Part D benefit enhancements (putting upward pressure on Medicare spending growth) and price negotiations/inflation rebates (putting downward pressure on Medicare and out-of-pocket spending growth).

Thus, CMS Actuaries believe spending for healthcare will be considerably higher than the growth of the overall economy (GDP) and inflation and become 19.6% of the total US economy in 2031. And it also projects that the economy will absorb annual spending increases for hospitals (5.8%) physician and clinical services (5.3%) and prescription drugs (4.6%).

My take:

Side-by-side, these reports present a curious projection for the U.S. economy through 2031: the overall economy will return to a slightly lower-level pre-pandemic normalcy and the healthcare industry will play a bigger role despite pushback from budget hawks preferring lower government spending and employers and consumers frustrated by high health prices today.

They also point to two obvious near-term problems:

1-The Federal Reserve pays inadequate attention to the healthcare economy. In Chairman Powell’s press conference following release of the FOMC report, there was no comment relating healthcare demand or spending to the broader economy nor a question from any of the 20 press corps relating healthcare to the overall economy. In his opening statement (below), Chairman Powell reiterated the Fed’s focus on prices and called out food, housing and transportation specifically but no mention of healthcare prices and costs which are equivalent or more stressful to household financial security:

“Good afternoon. My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people…My colleagues and I are acutely aware that high inflation imposes hardship as it erodes purchasing power, especially for those least able to meet the higher costs of essentials like food, housing, and transportation. We are highly attentive to the risks that high inflation poses to both sides of our mandate, and we are strongly committed to returning inflation to our 2% objective.”

2-Congress is reticent to make substantive changes in Medicare and other healthcare programs despite its significance in the U.S. economy. It’s politically risky. In the June 2 Congressional standoff to lift the $31.4 debt ceiling, cuts to Medicare and Social Security were specifically EXCLUDED. Medicare is 12% of mandated spending in the 2022 federal budget and is expected to grow from a rate of 4.8% in 2022 to 8% in 2023—good news for investors in Medicare Advantage but concerning to consumers and employers facing higher prices as a result.

Even simplifying the Medicare program to replace its complicated Parts A, B, C, and D programs or addressing over-payments to Medicare Advantage plans (in 2022, $25 billion per MedPAC and $75 billion per USC) is politically tricky. It’s safer for elected officials to support price transparency (hospitals, drugs & insurers) and espouse replacing fee for service payments with “value” than step back and address the bigger issue: how should the health system be structured and financed to achieve lower costs and better health…not just for seniors or other groups but everyone.

These two realities contribute to the disconnect between the Fed and CMS. Looking back 20 years across 4 Presidencies, two economic downturns and the pandemic, it’s also clear the health economy’s emergence did not occur overnight as the Fed navigated its monetary policy. Consider:

  • National health expenditures were $1.366 trillion (13.3% of GDP) in 2000 and $4.255 billion in 2021 (18.3% of the GDP). This represents 210% increase in nominal spending and a 37.5% increase in the relative percentage of the nation’s GDP devoted to healthcare. No other sector in the economy has increased as much.
  • In the same period, the population increased 17% from 282 million to 334 million while per capita healthcare spending increased 166% from $4,845 to $12,914. This disproportionate disconnect between population and health spending growth is attributed by economists to escalating unit costs increases for the pills, facilities, technologies and specialty-provider services we use—their underlying cost escalation notably higher than other industries.
  • There were notable changes in where dollars were spent: hospitals were unchanged (from $415 billion/30.4% of total spending to $1.323 trillion/31.4% of total spending), physician services shrank (from $288.2 billion/21.1% of total spending to 664.6 billion/15.6% pf total spending), prescription drugs were unchanged (from $122.3 billion/8.95% to $378 billion/8.88% of total spending) and public health increased slightly (from $43 billion/$3.2% of total spending to $187.6 billion/4.4% of total spending).
  • And striking differences in sources of funding: out of pocket spending shrank from $193.6/14.2% of payments to $433 billion/10.2% % of payments; private insurance shrank from $441 billion/32.3% of payments to $1.21 trillion/28.4% of total payments; Medicare grew from $224.8 billion/16.5% of payments to $900.8 billion/21.2% of payments; Medicaid + CHIP grew from $203.4 billion/14.9% to $756.2 billion/17.8% of payments; and Veterans Health grew from $19.1 billion/1.4% of payments to $106.0 billion/2.5% of payments.

Thus, if these trends continue…

  • Aggregate payments to providers from government programs will play a bigger role and payments from privately insured individuals and companies will play a lesser role.
  • Hospital price increases will exceed price increases for physician services and prescription drugs.
  • Spending for healthcare will (continue to) exceed overall economic growth requiring additional funding from taxpayers, employers and consumers AND/OR increased dependence on private investments that require shareholder return AND/OR a massive restructure of the entire system to address its structure and financing.

What’s clear from these reports is the enormity of the health economy today and tomorrow, the lack of adequate attention and Congressional Action to address its sustainability and the range of unintended, negative consequences on households and every other industry if left unattended. It’s illustrative of the disconnect between the Fed and CMS: one assumes it controls the money supply while delegating to the other spending and policies independent of broader societal issues and concerns.

The health economy needs fresh attention from inside and outside the industry. Its impact includes not only the wellbeing of its workforce and services provided its users. It includes its direct impact on household financial security, community health and the economic potential of other industries who get less because healthcare gets more.

Securing the long-term sustainability of the U.S. economy and its role in world affairs cannot be appropriately addressed unless its health economy is more directly integrated and scrutinized. That might be uncomfortable for insiders but necessary for the greater good. Recognition of the disconnect between the Fed and CMS is a start!

Minnesota passes path to public option

Posted on by • Posted in Affordability, Center for Medicare and Medicaid Services (CMS), Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Medicaid Section 1115 Waiver, Medicare Waiver, Operating Margin, Public Option • Leave a comment

https://mailchi.mp/3ed7bdd7f54b/the-weekly-gist-june-2-2023?e=d1e747d2d8

Last week the Minnesota legislature passed a bill to initiate the creation of a public option health insurance plan available to state residents of all incomes. The bill funds an actuarial analysis of the policy and requires the state to apply for a Centers for Medicare and Medicaid Services (CMS) waiver to begin implementation by 2027. The public option plan will build upon MinnesotaCare, a state health plan currently covering residents with incomes below 200 percent of the federal poverty line. 

The Gist: Minnesota joins Washington, Colorado, and Nevada as the fourth state to authorize a public option health plan. But unlike these other three states, whose public option programs rely on private payers to manage risk and administration with tighter price controls, Minnesota intends to create a “true” public option in which the government competes directly with private payers. 

Analysis funded by a hospital and insurance trade group found that a public option could reduce Minnesota hospital revenues by more than $2B over 10 years, while only lowering the uninsured rate by half a percentage point.

Though Minnesota lawmakers were more concerned with lowering healthcare spending and improving health insurance affordability for state residents, the success of the program will depend in part on how it negotiates with providers, who justifiably fear a worsening payer mix that further threatens margins. 

Assessing Progress on the Hospital Price Transparency Rule

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Price Transparency • Leave a comment

https://revcycleintelligence.com/features/assessing-progress-on-the-hospital-price-transparency-rule

More than a year after the regulation went into effect, compliance with the hospital price transparency rule remains low, as hospitals are hesitant to invest in necessary software and resources.

The Centers for Medicare and Medicaid Services (CMS) established the hospital price transparency rule to help individuals know the cost of a hospital item or service before receiving it.

CMS proposed the price transparency rule in the 2020 Medicare Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule. The rule came in response to rising healthcare costs. Policymakers implemented regulations that give consumers more control over what they pay for healthcare services.

The rule went into effect on January 1, 2021, but hospitals have been slow to comply with the regulation. Without consistent compliance from hospitals and health systems, the rule does little to protect consumers from high healthcare prices.

WHAT IS THE PRICE TRANSPARENCY RULE?

The price transparency rule requires hospitals to publish the costs of their items and services on a publicly available website in two ways.

First, hospitals must have a single machine-readable digital file with standard charges for all their items and services. Standard charges include gross charges, discounted cash prices, payer-specific negotiated chargers, and de-identified minimum and maximum negotiated charges.

Hospitals must also display standard charges of at least 300 shoppable services that consumers can schedule in advance. That information must be displayed in a consumer-friendly format that includes plain language descriptions. Hospitals should also group the services with related ancillary services.

Hospitals may offer an online price estimator tool instead of publishing standard charges for the most common shoppable services. According to CMS, the price estimator tool must provide estimates for as many of the 70 CMS-specified shoppable services that the hospital offers and any additional shoppable services to reach a total of 300 services.

In addition, the tool must allow consumers to receive an estimate of the amount they will have to pay for a given service. Hospitals must display the price estimator tool on their websites and make it accessible to the public for free. Consumers also need to be able to access the tool without creating a user account.

CMS established an enforcement plan to ensure hospitals comply with the price transparency rule. The agency planned to evaluate complaints made by individuals or entities, review analyses of noncompliance, and audit hospital websites. However, more than one year after the regulation went into effect, hospitals are still not complying with the price transparency rule.

PRICE TRANSPARENCY RULE COMPLIANCE

The price transparency regulation received immediate pushback from hospital and provider groups. Before the policy went into effect, the American Hospital Association (AHA) sued HHS over the rule, stating that it would confuse consumers and increase prices.

In addition, AHA and fellow hospital and provider groups submitted an emergency stay of enforcement motion in December 2020 to pause the audits and fines that would result from noncompliance. The groups said the CMS enforcement actions would force hospitals to divert resources that hospitals needed to respond to COVID-19.

Since the rule was implemented, these concerns have perhaps been reflected in the high rates of noncompliance among hospitals.

Data from as early as January 2021 revealed that pricing information was inconsistent and incomplete among the top 20 largest hospitals in the country. The hospitals published some form of pricing information but not all complied with the price transparency requirements, including posting prices for 300 shoppable services.

The Kaiser Family Foundation (KFF) analyzed data from the two largest hospitals in each state and the District of Columbia and found similar trends. For example, 80 percent of the hospitals provided gross charge information on a price estimator tool and a machine-readable file, but only 35 of the 102 hospitals displayed payer-specific negotiated rates.

Moreover, research from Manatt Health found hospitals were more likely to comply with the shoppable services requirement than the machine-readable file requirement.

According to an Insights analysis from Xtelligent Healthcare Media, hospital networks frequently had inaccessible machine-readable files and shoppable services. In addition, many hospitals required patients to provide personally identifiable information in exchange for pricing data and had machine-readable files that lacked the required charges.

PatientRightsAdvocate.org has been tracking hospital compliance with the price transparency rule since May 2021. Between May and July, the organization found that out of 500 randomly selected US hospitals, only 5.6 percent were compliant with the rule.

Between December 2021 and January 2022, the organization reviewed 1,000 more hospitals and found that only 143 complied with all aspects of the price transparency rule.

WHY ARE HOSPITALS NOT COMPLYING?

Under the 2022 Medicare OPPS rule, CMS shared the penalties for not complying with the price transparency rule. Hospitals with less than 30 beds would receive penalties of $300 per day, while hospitals with 31 or more beds would receive a $10 per bed per day penalty, with a maximum daily fine of $5,500.

However, hospitals have not received any penalties for noncompliance as of February 2022. CMS has sent around 345 warning notices to noncompliant hospitals since the rule went into effect, the agency told Becker’s Hospital Review.

The threat of financial penalties does not seem to be enough to ensure compliance, though.

Shortly after the rule took effect, noncompliant hospitals said they were not fully complying due to resource constraints and a limited understanding of the rule. Some hospitals also mentioned that they were waiting to see how their competitors responded to the rule before achieving compliance.

More than one year later, in April 2022, financial leaders expressed similar concerns regarding compliance. Revenue cycle leaders told KLAS that a top barrier to achieving compliance was the confusing and complex regulations included in the rule.

Price transparency compliance also requires significant investment in software and outside resources, the KLAS report noted. As hospitals and health systems struggle financially due to the COVID-19 pandemic, investing in price transparency software may not be a top priority.

In addition, revenue cycle leaders reported experiencing difficulties with the software used to publish machine-readable files and a master list of prices online.

Until CMS starts delivering monetary penalties for noncompliance or adjusts the regulation to reduce the financial burden for health systems, hospital compliance with the price transparency rule will likely remain slim.

Special Report: Physicians on the Brink or At the Starting Line?

Posted on by • Posted in America's Physician Groups (APG), American Medical Association (AMA), Caregiver Workforce, Center for Medicare and Medicaid Services (CMS), Consumerism, Health Policy, Medicaid, Medicare, Physician, Physician Burnout, Physician Compensation, Private Equity • Leave a comment
Special Report: Physicians on the Brink or At the Starting Line?

Tomorrow, America’s Physician Groups (APG) will kick-off its Annual Spring Conference “Going the Distance” in San Diego with breakout sessions focused on wide ranging operational issues and 3 general sessions that address restoring trust in the profession, lessons from the pandemic and Medicare Advantage.

Next Thursday, the American Medical Association (AMA) will kick off its 5-day House of Delegates session in Chicago with a plethora of resolutions and votes on the docket and committee reports on issues like the ethical impact of private equity on physicians in private equity owned practices, health insurer payment integrity and much more.

These meetings are coincident with the expected resolution of the debt-ceiling dispute in Congress which essentially leaves current Medicare and Medicaid payments to physicians and others in tact through 2025. So, for at least the time being, surprises in insurer payments to physicians are not anticipated.

Nonetheless, it’s a critical time for APG and AMA as their members face unparalleled market pressures:

  • Trust in the profession has eroded. Media attention to its bad actors has expanded.
  • Settings have changed: the majority now work as employees of large groups owned by hospitals or private equity sponsors.
  • Consumer (patient) expectations about physician quality, access and service are more exacting.
  • Technologies that improve precision in diagnostics and therapies and integration of social determinants in care planning have altered where, how and by whom care is delivered.
  • Affordability and lack of price transparency are fundamental concerns for U.S. consumers (and voters), employers and Congress. While drug PBMs, hospitals and health insurers are a focus of attention, physicians are not far behind.
  • Private equity and retail giants are creatine formidable competition in primary and specialty care.
  • Media coverage of “bad actors” engaged in fraudulent activity (i.e. unnecessary care, medications, et al) has increased.
  • Operating losses in hospitals remain significant limiting hospital investments in their employed medical practices.

Both organizations remain steadfast in the belief that the future for U.S. healthcare is physician centric:

  • For APG, it’s anchored in a core belief that changing payer incentives from fee-for-service to value is the essential means toward the system’s long-term sustainability and effectiveness. (APG represents 335 physician organizations)
  • For AMA, “true north” is the profession’s designated role as caregivers and stewards of the public’s health and wellbeing. (AMA’s membership includes 22% of the nation’s 1.34 million practicing physicians, medical students and residents).

But market conditions have taken their toll on physician psyche even as CMS has altered its value agenda.

Physicians are highly paid professionals. Per Sullivan Cotter and Kaufman Hall, their finances took a hit during the pandemic and their finances in 2022-2023 has been stymied by inflationary pressures. Thus, most worry about their income and they’re hyper-sensitive to critics of their compensation.

Fueling their frustration, virtually all believe insurance companies are reimbursement bullies, hospitals spend too much on executive salaries (aka suits) and administration and not enough on patient care and patients are increasingly difficult and unreasonable. Most think the profession hasn’t done enough to protect them and 65% say they’re burned out. That’s where APG and AMA find themselves relative to their members.

My take:

The backdrop for the APG and AMA meetings in the next 2 weeks could not be more daunting. Inflationary pressures dog the health economy as each advances an advocacy agenda suitable to their member’s needs.

But something is missing: a comprehensive, coherent, visionary view of the health system’s future in the next 10-20 years wherein physicians will play a key role.

That view should include…

  • How value and affordability are defined and actualized in policies and practice.
  • How the caregiver workforce is developed, composed and evaluated based on shifting demand.
  • How incentives should be set and funding sourced and rationalized across all settings and circumstances of service.
  • How consumerism can be operationalized.
  • How prices and costs in every sector (including physician services) can become readily accessible.
  • How a seamless system of health can be built.
  • How physician training and performance can be modernized to participate effectively in the system’s future.

The U.S. health system’s future is not a repeat of its past.  Recognizing this, physicians and the professional associations like APG and AMA that serve them have an obligation to define its future state NOW.

Some physicians are on the brink of despair; others are at the starting line ready to take on the challenge.

5 questions Medicare Advantage data doesn’t answer

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Denial, Denial Rates, Health Insurance Coverage Adequacy, Medicare, Medicare Advantage, Medicare Supplement, Out of Pocket Expenses, Prior Authorization, Underinsured • Leave a comment

https://www.beckerspayer.com/payer/5-questions-medicare-advantage-data-doesnt-answer.html

A lack of data about Medicare Advantage plans means there are several unanswered questions about the program, according to an analysis from Kaiser Family Foundation. 

The analysis, published April 25, breaks down the kinds of Medicare Advantage data not publicly available. Some missing data is not collected from insurers by CMS, and some data is collected by the agency but not available to the public. 

Here are five questions researchers can’t answer without more data, according to Kaiser Family Foundation: 

  1. Insurers are not required to report how many enrollees use supplemental benefits and if members incur out-of-pocket costs with their supplemental benefits. Without this data, researchers can’t answer what share of enrollees use their supplemental benefits, how much members spend out of pocket for supplemental benefits, and if these benefits are working to achieve better health outcomes. 
  2. CMS does not require Medicare Advantage plans to report prior authorizations by type of service. Without more granular data, researchers can’t determine which services have the highest rates of denial and if prior authorization rates vary across insurers and plans. 
  3. Insurers are also not required to report the reasons for prior authorization denials to CMS. This leaves unanswered questions, including what is the most common reason for denials and if rates of denials vary across demographics. 
  4. Medicare Advantage plans do not report complete data on denied claims for services already provided. Without this data, researchers cannot determine how often payers deny claims for Medicare-covered services and reasons why these claims are denied. 
  5. CMS does not publish the names of employers or unions that receive Medicare funds to provide Medicare Advantage plans to retired employees. Without more data, researchers can’t tell which industries use Medicare Advantage most often and how rebates vary across employers.

What’s driving the bidding war for primary care practices?

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Market Consolidation, Market Power, Medicare Advantage, Mergers & Acquisitions, Outcomes, Physician Practice Acquisition, Physician Practice Valuation, Primary Care, Quality of Care, Value-Based Contracting, Value-Based Healthcare • Leave a comment

https://mailchi.mp/5e9ec8ef967c/the-weekly-gist-april-14-2023?e=d1e747d2d8

Published in the April edition of Health Affairs Forefront, this piece unpacks why payers and other corporations have replaced health systems as the top bidders for primary care practices, driving up practice purchase prices from hundreds of dollars to tens of thousands of dollars per patient. While corporate players like UnitedHealth Group, Amazon, and Walgreens have spent an estimated $50B on primary care, it pales in comparison to the potential “$1T opportunity” in value-based care projected by McKinsey and Company.

The authors argue that this tantalizing opportunity exists because the Centers for Medicare and Medicaid Services (CMS) invited corporations to “re-insure” Medicare through capitated arrangements in Medicare Advantage (MA) and its Direct Contracting program.

While CMS intended to promote risk and value-based incentives to improve care quality and costs, the incentive structures baked into these programs have afforded payers record profits, despite neither improving patient outcomes nor reducing government healthcare spending.

The Gist: While the critiques of MA reimbursement structures in this piece are familiar, they are woven together into a convincing rebuke of the “unintended consequences” of CMS’s value-based care policy. 

Through poorly designing incentives, CMS paved a runway for corporate America to capture the lion’s share of the financial returns of value-based care, paying prices for primary care that health systems can’t match.

Meanwhile, despite skyrocketing valuations for primary care practices, primary care services remain underfunded and inadequately reimbursed, pushing primary care groups closer to payers with excess profits to invest.