Patient acuity is driving up hospital costs, AHA says

https://www.healthcarefinancenews.com/news/patient-acuity-driving-hospital-costs-aha-says?mkt_tok=NDIwLVlOQS0yOTIAAAGGiU3xe0NkF9CXkX2TRevw1rc34F0gW3xrh4u01QiSJCzDyJT2rG2TAkJAz344ryPgANhHM9yerPG9lZlib0xHBLXAwqAMIXRTIvQXgJLT

The AHA wants Congress to halt Medicare payment cuts and extend or make permanent certain waivers, among other requests.

The American Hospital Association has released a report on patient acuity that shows hospital patients are sicker and more medically complex than they were before the COVID-19 pandemic.

This is driving up hospital costs for labor, drugs and supplies, according to the AHA report. 

Hospital patient acuity, as measured by average length of stay, rose almost 10% between 2019 and 2021, including a 6% increase for non-COVID-19 Medicare patients as the pandemic contributed to delayed and avoided care, the report said. For example, the average length of stay rose 89% for patients with rheumatoid arthritis and 65% for patients with neuroblastoma and adrenal cancer. 

In 2022, patient acuity as reflected in the case mix index rose 11.1% for mastectomy patients, 15% for appendectomy patients and 7% for hysterectomy patients.

WHY THIS MATTERS

Mounting costs, combined with economy-wide inflation and reimbursement shortfalls, are threatening the financial stability of hospitals around the country, according to the AHA report.

The length of stay due to increasing acuity is occurring at a time of significant financial challenges for hospitals and health systems, which have still not received support to address the Delta and Omicron surges that have comprised the majority of all COVID-19 admissions, the AHA said. 

The AHA is asking Congress to halt its Medicare payment cuts to hospitals and other providers; extend or make permanent certain waivers that improve efficiency and access to care; extend expiring health insurance subsidies for millions of patients; and hold commercial insurers accountable for improper and burdensome business practices.

THE LARGER TREND

Hospitals, through the AHA, have long been asking the federal government for relief beyond what’s been allocated in provider relief funds.

In January, the American Hospital Association sought at least $25 billion for hospitals to help combat workforce shortages and labor costs exacerbated by what the AHA called “exorbitant” rates on the part of some staffing agencies. The Department of Health and Human Services released $2 billion in additional funding for hospitals.

In March, the AHA asked Congress to allocate additional provider relief funds beyond the original $175 billion in the Coronavirus Aid, Relief and Economic Security Act.

Earlier this month, the Centers for Medicare and Medicaid Services increased what it originally proposed for payment in the Inpatient Prospective Payment system rule. The AHA said the increase was not enough to offset expenses and inflation.

15 million people may lose Medicaid coverage after COVID-19 PHE ends, says HHS

https://www.healthcarefinancenews.com/news/15-million-people-may-lose-medicaid-coverage-after-covid-19-phe-ends-says-hhs?mkt_tok=NDIwLVlOQS0yOTIAAAGGiU3xe03L9n9GxXZ9yaIV-qA-J7yJdgxxS3cvHsltDu68qeQvkjp9itAyWko5emSDE6no51ICx_rIZyr_2p4wJhXx3hLDN834FGQ0wrLf

Children, young adults will be impacted disproportionately, with 5.3 million children and 4.7 million adults ages 18-34 predicted to lose coverage.

Roughly 15 million people could lose Medicaid coverage when the COVID-19 public health emergency ends, and only a small percentage are likely to obtain coverage on the Affordable Care Act exchanges, according to a new report from the Department of Health and Human Services.

Using longitudinal survey data and 2021 enrollment information, HHS estimated that, based on historical patterns of coverage loss, this would translate to about 17.4% of Medicaid and Children’s Health Insurance Program (CHIP) enrollees leaving the program.

About 9.5% of Medicaid enrollees, or 8.2 million people, will leave Medicaid due to loss of eligibility and will need to transition to another source of coverage. Based on historical patterns, 7.9% (6.8 million) will lose Medicaid coverage despite still being eligible – a phenomenon known as “administrative churning” – although HHS said it’s taking steps to reduce this outcome.

Children and young adults will be impacted disproportionately, with 5.3 million children and 4.7 million adults ages 18-34 predicted to lose Medicaid/CHIP coverage. Nearly one-third of those predicted to lose coverage are Hispanic (4.6 million) and 15% (2.2 million) are Black.

Almost one-third (2.7 million) of those predicted to lose eligibility are expected to qualify for marketplace premium tax credits. Among these, more than 60% (1.7 million) are expected to be eligible for zero-premium marketplace plans under the provisions of the American Rescue Plan. Another 5 million would be expected to obtain other coverage, primarily employer-sponsored insurance.

An estimated 383,000 people projected to lose eligibility for Medicaid would fall in the coverage gap in the remaining 12 non-expansion states – with incomes too high for Medicaid, but too low to receive Marketplace tax credits. State adoption of Medicaid expansion in these states is a key tool to mitigate potential coverage loss at the end of the PHE, said HHS.

States are directly responsible for eligibility redeterminations, while the Centers for Medicare and Medicaid Services provides technical assistance and oversight of compliance with Medicaid regulations. Eligibility and renewal systems, staffing capacity, and investment in end-of-PHE preparedness vary across states. 

HHS said it’s working with states to facilitate enrollment in alternative sources of health coverage and minimize administrative churning. These efforts could reduce the number of eligible people losing Medicaid, the agency said.

The Inflation Reduction Act of 2022 extends the ARP’s enhanced and expanded Marketplace premium tax credit provisions until 2025, providing a key source of alternative coverage for those losing Medicaid eligibility, said HHS.

WHAT’S THE IMPACT?

While the model projects that as many as 15 million people could leave Medicaid after the PHE, about 5 million are likely to obtain other coverage outside the marketplace and nearly 3 million would have a subsidized Marketplace option. And some who lose eligibility at the end of the PHE may regain it during the unwinding period, while some who lose coverage despite being eligible may re-enroll.

The findings highlight the importance of administrative and legislative actions to reduce the risk of coverage losses after the continuous enrollment provision ends, said HHS. Successful policy approaches should address the different reasons for coverage loss.

Broadly speaking, one set of strategies is needed to increase the likelihood that those losing Medicaid eligibility acquire other coverage, and a second set of strategies is needed to minimize administrative churning among those still eligible for coverage.

Importantly, some administrative churning is expected under all scenarios, though reducing the typical churning rate by half would result in the retention of 3.4 million additional enrollees.

THE LARGER TREND

CMS has released a roadmap to ending the COVID-19 public health emergency as health officials are expecting the Biden administration to extend the PHE for another 90 days after mid-October.

The end of the PHE, last continued on July 15, is not known, but HHS Secretary Xavier Becerra has promised to give providers 60 days’ notice before announcing the end of the public health emergency.

A public health emergency has existed since January 27, 2020.

Congress isn’t done with messy health care fights

https://www.axios.com/2022/08/17/congress-isnt-done-with-messy-health-care-fights

The Inflation Reduction Act is law. But that doesn’t mean major health care interests are done testing their lobbying clout. Many are already lining up for year-end relief from Medicare payment cuts, regulatory changes and inflation woes.

The big picture: Year-end spending bills often contain health care “extenders” that delay cuts to hospitals that treat the poorest patients or keep money flowing to community health centers. But lawmakers may be hard-pressed to justify the price tag this time, and are seeing an unusual assortment of appeals for help.

Background: 2% Medicare sequester cuts that had been paused by the pandemic took effect last month. Another 4% cut could come at year’s end, if lawmakers don’t delay it.

  • These automatic reductions in spending come amid health labor force shortages, supply chain problems and other pressures that are making providers jockey for relief.
  • It will fall to Congress to pick winners and losers among hospitals, physicians, home health care groups, nursing homes and ambulance services. And each says the consequences of not helping are dire.
  • “The core question is how do they come up with the money and how do they decide to prioritize who give it to?” said Raymond James analyst Chris Meekins.

Go deeper: Hospitals are pressing hard for relief from the year-end sequester, and want Congress to extend or make permanent programs that support rural facilities and are slated to expire on Sept. 30, absent legislative action.

  • The American Hospital Association has estimated its members will lose at least $3 billion by year’s end.
  • Hospitals in the government’s discount drug program also have to be made whole after the Supreme Court unanimously overturned a huge pay cut stemming from a 2018 rule. And the industry also is seeking to reverse a planned cuts to supplementary payments for uncompensated care.

Doctors and nursing homes are among the other players lining up for relief from sequester cuts, specific Medicare payment changes that affect their businesses or new regulations.

  • The American Medical Association says Medicare cuts could threaten physician practices that have been racked by pandemic-induced retirements and burnout. “This is really about allowing patients and Medicare beneficiaries to continue care,” AMA President Jack Resneck told Axios.
  • National Association for Home Care and Hospice President Bill Dombi said over half of the home health agencies will run deficits if lawmakers don’t act. “When you have that many providers in the red, you can foresee there will be negative consequences. They’re already rejecting 20 to 30% of referrals for admissions to care, so it will be affecting patients,” said Dombi.
  • Ambulance services are also struggling. “Ambulance providers around the country are at a very near breaking point as we kind of walk along the ledge leading to this cliff at the end of the calendar year,” Shawn Baird, president of the American Ambulance Association and chief operating officer of Metro West Ambulance in Oregon, told Axios.

The other side: Despite Congress’ willingness to delay payment cuts, there’s not enough money to make everyone happy. And concerns about Medicare program’s solvency that emerged during the lengthy debate over the Democrats’ tax, climate and health package could dampen lawmakers’ enthusiasm for costly fixes that favor one provider group.

  • The continuation of the COVID-19 public health emergency and its myriad temporary payment allowances could also lessen a sense of urgency around provider relief.

The bottom line: For all the dire warnings, it’s unlikely Congress will do much until December, when it will likely pass a continuing resolution or an omnibus spending bill and could then move to delay the 4% cut.

Medical Abortion and Emergency Contraception: What’s the Difference?

Pharmaceutical options for both emergency contraception and abortion are available to those who can get pregnant. In this episode we take a look at the availability of these medications, how they work, and the differences between them.

House expected to vote to pass healthcare and climate reform bill, sending it to President Biden for signature

https://mailchi.mp/11f2d4aad100/the-weekly-gist-august-12-2022?e=d1e747d2d8

The $740B Inflation Reduction Act (IRA) includes significant reforms for Medicare’s drug benefits, including capping seniors’ out-of-pocket drug spending at $2,000 per year, and insulin at $35 per month. Medicare plans to fund these provisions by requiring rebates from manufacturers who increase drug prices faster than inflation, and through negotiating prices for a limited number of costly drugs. Drug prices are consistently a top issue for voters, but seniors won’t see most of these benefits until 2025 or beyond, well after this year’s midterms and the 2024 general election. 

The Gist: While this package allows Democrats to deliver on their campaign promise to allow Medicare to negotiate drug prices, the scope is more limited than previous proposals. Over the next decade, Medicare will only be able to negotiate prices for 20 drugs that lack competitors and have been on the market for several years.

Still, because much Medicare drug spending is concentrated on a few high-cost drugs, the Congressional Budget Office projects the bill will reduce Medicare spending by $100B over ten years. However, these negotiated rates and price caps don’t apply to the broader commercial market, and some experts are concerned this will lead manufacturers to raise prices on those consumers—creating yet another element of the cost-shifting which has been the hallmark of our nation’s healthcare system. 

The pharmaceutical industry also claims that this “government price setting” will hamper drug development (although there is limited to no evidence to support this proposition), signaling that they will likely spend the next several years trying to influence the rulemaking process as the new law is implemented.

New York judge dismisses surgeon’s lawsuit challenging surprise billing law

A New York federal judge on Wednesday dismissed a surgeon’s legal challenge that sought to roll back key pieces of a federal law that protects patients from surprise out-of-network bills.

Judge Ann Donnelly ruled against the surgeon, finding that the law is constitutional, and dismissed the case for lack of standing and dismissed the surgeon’s request for a preliminary injunction.

Katie Keith, a lawyer and health policy expert at Georgetown University who tracks surprise billing litigation, called the ruling good news for consumers.

The lawsuit threatened to once again expose millions of patients to surprise out-of-network bills, Keith previously said in a Health Affairs report on the litigation.

Daniel Haller, a surgeon, and his private practice filed suit in December against federal regulators alleging that the ban on surprise billing was unconstitutional along with the independent dispute resolution process, the way in which providers and payers are supposed to resolve payment disagreements.

Haller said the law deprives physicians the right to be paid a reasonable value for their services, according to the complaint.

Under the law, physicians and insurers can enter into an independent dispute resolution process to come to an agreement on the payment for services. The process was intended to keep patients out of the middle of these payment disputes.

Haller argued the process favored insurers — not providers.

However, a key part of that process was struck down by a Texas judge, who ruled in favor of providers in February.

Donnelly said Haller and his team did not show that they even went through the arbitration, or IDR, process, “much less that the IDR process resulted in a payment amount below the reasonable value,” according to Wednesday’s opinion.

“At the time of oral argument — almost six months after the Act went into effect — the plaintiffs could not say whether they had participated in the IDR process. They do not allege that the IDR process has caused any concrete harm, so their claims of constitutional injury are speculative,” Donnelly said.

Haller’s practice, Long Island Surgical, and its team of six physicians perform procedures on patients who are admitted after an emergency department visit.

Almost 80% of Long Island Surgical’s patients have an insurance plan that does not have a contractual relationship with the surgical group. In other words, Haller and his colleagues are almost always out-of-network, potentially putting patients at risk of a surprise medical bill.

The No Surprises Act tried to solve this problem, and it bans surprise billing in most cases.

The law aimed to tackle one of the most frustrating issues in healthcare, which could ensnare even savvy patients. Patients could be unknowingly treated by out-of-network providers, and then get bills their insurers refused to pay in full or part, leaving them stuck to pay the remaining balance.

7 healthcare takeaways from Senate Democrats’ newly passed $739B landmark bill

With a 51-50 vote, Senate Democrats passed a sweeping $739 billion bill Aug. 7 that furthers some of the largest changes to healthcare in years.

Titled the Inflation Reduction Act, the bill touches energy, tax reform and healthcare. The House is expected to take it up Aug. 12, with Democrats aiming to approve it and send it to President Joe Biden’s desk.  

Here are seven healthcare takeaways from the 755-page bill

Drug pricing

1. For the first time, Medicare would be allowed to negotiate the price of prescription medicines with manufacturers. Negotiation powers will apply to the price of a limited number of drugs that incrementally increases over the next seven years. Ten drugs will be eligible for negotiations beginning in 2026; eligibility expands to 15 drugs in 2027 and 20 by 2029

2. The HHS secretary will provide manufacturers of selected drugs with a written initial offer that contains HHS’ proposal for the maximum fair price of the drug and reasoning used to calculate that offer. Manufacturers will have 30 days to either accept HHS’ offer or propose a counteroffer.  

3. Members of Medicare Part D prescription drug plan would see their out-of-pocket costs for prescription drugs capped at $2,000 per year, with the option to break that amount into monthly payments, beginning in 2025.

4. Democrats lost on a provision to place a $35 cap on insulin for Americans covered by private health plans. The provision to cap insulin at $35 dollars for Medicare enrollees passed by a of 57-43. 

5. Drug companies will be required to rebate back price differences to Medicare if they raise prices higher than the rate of inflation, coined an “inflation rebate.”

6. The legislation makes all vaccines covered under Medicare Part D free to beneficiaries with no deductibles, co-insurance or cost-sharing, starting in 2023. 

Tax subsidies 

7. The legislation extends the Affordable Care Act’s federal health insurance subsidies, now set to expire at the end of the year, through 2025. Democrats say the extension will prevent an estimated 3.4 million Americans from losing health coverage.

Inpatient payment increase not enough, AHA says

https://www.healthcarefinancenews.com/news/inpatient-payment-increase-not-enough-aha-says?mkt_tok=NDIwLVlOQS0yOTIAAAGGA2hNPoWk8cdzEHcBC5xk1t_79ltx5DUnzCdiUWpAvrtC-_vON29agi9pNZf0kUGl9cKeinq1FXBXdCEr_RCHDNPIsIG9WjhKw1KLwH8

Hospitals are forced to absorb inflationary expenses, particularly related to supporting their workforce, AHA says.

The Centers for Medicare and Medicaid Services’ increase in the inpatient payment rate for 2023 is welcome but not enough to offset expenses, according to the American Hospital Association.

CMS set a 4.1% market basket update for 2023 in its final rule released Monday, calling it the highest in the last 25 years. The increase was due to the higher cost in compensation for hospital workers.

The final rule gave inpatient hospitals a 4.3% increase for 2023, as opposed to the 3.2% increase in April’s proposed rule.

WHY THIS MATTERS

CMS used more recent data to calculate the market basket and disproportionate share hospital payments, a move that better reflects inflation and labor and supply cost pressures on hospitals, the AHA said.

“That said, this update still falls short of what hospitals and health systems need to continue to overcome the many challenges that threaten their ability to care for patients and provide essential services for their communities,” said AHA Executive Vice President Stacey Hughes. “This includes the extraordinary inflationary expenses in the cost of caring hospitals are being forced to absorb, particularly related to supporting their workforce while experiencing severe staff shortages.”

The AHA would continue to urge Congress to take action to support the hospital field, including by extending the low-volume adjustment and Medicare-dependent hospital programs, Hughes said.

In late July, Senate and House members urged CMS to increase the inpatient hospital payment.

Premier, which works with hospitals, also said the 4.3% payment update falls short of reflecting the rising labor costs that hospitals have experienced since the onset of the pandemic. 

“Coupled with record high inflation, this inadequate payment bump will only exacerbate the intense financial pressure on American hospitals,” said Soumi Saha, senior vice president of Government Affairs for Premier.

THE LARGER TREND

Recent studies show hospitals remain financially challenged since the COVID-19 pandemic’s effect on revenue and supply chain and labor expenses. Piled onto that has been inflation that has added to soaring expenses.

Hospital margins were up slightly from May to June, but are still significantly lower than pre-pandemic levels, according to a Flash Report from Kaufman Hall.

The effects of the pandemic on the healthcare industry have been profound, resulting in the creation of new business models, according to a report from McKinsey.

Transformational change is necessary as hospitals have been hit hard by eroding margins due to cost inflation and expenses, Fitch found.

National uninsured rate hit record low this year

The national uninsured rate reached an all-time low of 8 percent in the first quarter of 2022, according to an HHS report released Aug. 2. 

The report analyzed data from the National Health Interview Survey and the American Community Survey, according to an Aug. 2 HHS news release. 

Three things to know:

1. The previous record low uninsured rate was 9 percent, set in 2016. 

2. The uninsured rate among adults ages 18-64 was 11.8 percent in the first quarter of 2022. The uninsured rate for children ages 0-17 was 3.7 percent. 

3. About 5.2 million people have gained health coverage since 2020. Gains in coverage are concurrent with the implementation of the American Rescue Plan’s enhanced ACA Marketplace subsidies, the continuous enrollment provision in Medicaid, several state Medicaid expansions and enrollment outreach efforts.  

Critics say Mark Cuban’s pharmacy isn’t tackling the big issue: brand-name drugs

Mark Cuban’s pharmacy, Cost Plus Drug Co., has hundreds of drugs marked at discounted prices, but some pharmacy experts say there’s a larger problem that needs fixing, CNBC reported July 28. 

The online pharmacy launched in January with about 100 drugs, and by its one-year anniversary, plans to have more than 1,500 medications, according to the company’s website. The business model, which allocates for a $3 pharmacy dispensing fee, $5 shipping fee and a 15 percent profit margin with each order, aims to uproot the pharmaceutical industry, which has faced criticism for years about its opaque business practices

Gabriel Levitt, the president of PharmacyChecker, a company that monitors the cheapest drug prices, told CNBC there’s more to be done.

“As much as I support the venture, what they’re doing does not address the big elephant in the room,” Mr. Levitt said. “It’s really brand-name drugs that are increasing in price every year and forcing millions of Americans to cut back on medications or not take them at all.”

Brand-name drugs are 80 percent to 85 percent more expensive than generics since brand-name drugs have to repeat clinical tests to prove efficacy, according to the FDA. Cost Plus Drug Co. only offers generics. Mr. Cuban told CNBC he hopes to sell brand-name medications “within six months,” but added that it’s a tentative timeline.