Category Archives: Hospital Industry

Outlook remains negative for US for-profit hospitals, Moody’s says

Posted on by • Posted in Credit Quality, Credit Ratings, For-Profit, Health System, Hospital, Hospital Industry, Market Outlook, Market Trends, Market Uncertainty, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.beckershospitalreview.com/finance/outlook-remains-negative-for-us-for-profit-hospitals-moody-s-says.html?utm_medium=email

Fitch gives negative ratings outlook for APAC life insurance | Insurance Business

Moody’s Investors Service maintained its negative outlook for U.S. for-profit hospitals due to waning federal aid, shifting payer mixes and varying volume trends.

Moody’s expects for-profit hospitals earnings before interest tax depreciation and amortization to decline by a low-to-mid single-digit rate in the next 12 to 18 months.

The credit rating agency maintained the negative outlook for several reasons, including that government aid to providers is beginning to wind down and most providers will see adverse payer mix shifts in the next year due to the high unemployment rate in the U.S.

In addition, volume trends and acuity levels are likely to vary significantly for these for-profit providers across the U.S. and the number of procedures performed outside of the hospital setting will continue to increase, which will weaken hospital earnings, Moody’s said. 

Further, the credit rating agency said that many providers implemented rapid and aggressive cost cutting measures, which enabled them to exit the second quarter largely unscathed.

“Some hospitals have said that for every lost dollar of revenue, they were able to cut about 50 cents in costs. However, we believe that these levels of cost cuts are not sustainable,” Moody’s said.

Overall, Moody’s said it expects volumes to gradually return to pre-COVID-19 levels in 2021.

 

 

 

8 health systems with strong finances

Posted on by • Posted in Balance Sheet, Credit Quality, Credit Ratings, Financial Ratios, Health System, Hospital, Hospital Industry, Key Metrics, Key Performance Indicators, Key Ratios, Market Consolidation, Market Power, Market Share, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.beckershospitalreview.com/finance/8-health-systems-with-strong-finances-091620.html?utm_medium=email

Here are eight health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.

1. Minneapolis-based Allina Health has an “AA-” rating and stable outlook with Fitch. The health system has a strong financial profile and is the acute care leader in the broad Twin Cities metro area, Fitch said. The credit rating agency said Allina’s proven ability to rebound quickly from operating challenges supports the stable outlook.

2. Children’s Healthcare of Atlanta has an “Aa2” rating and stable outlook with Moody’s. The system has strong operating margins and is the leading pediatric provider in the Atlanta area, Moody’s said. The credit rating agency expects Children’s Healthcare of Atlanta to continue to generate robust margins and maintain exceptional liquidity while undergoing a new campus expansion project.

3. La Crosse, Wis.-based Gundersen Health System has an “AA-” rating and stable outlook with Fitch. The health system has consistently strong operating performance, strong balance sheet metrics and a low debt burden, Fitch said. The credit rating agency said Gundersen’s rating continues to be supported by its leading market position and expanding operating platform.

4. Houston Methodist has an “AA” rating and stable outlook with S&P. The system, which comprises an academic medical center and six community hospitals, has a strong enterprise profile and a history of excellent margins and cash flow, S&P said. The credit rating agency said Houston Methodist is well positioned to withstand the pressures from COVID-19.

5. Indianapolis-based Indiana University Health has an “AA” rating and stable outlook with Fitch. The health system has a solid balance sheet and strong operating cash flow despite short-term pressure from the COVID-19 pandemic. The credit rating agency expects IU Health’s EBITDA margins will range between 12 percent and 14 percent annually when margins recover from the pandemic.

6. Broomfield, Colo.-based SCL Health has an “AA-” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. The system has a track record of exceptional operations, consistent improvement in unrestricted liquidity levels and significant financial flexibility, Fitch said. The credit rating agency said SCL Health is well positioned to manage the pressures of COVID-19, having built up cash reserves.

7. San Diego-based Scripps Health has an “AA” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. The health system has a strong balance sheet, strong operations and has maintained a low leverage position, Fitch said. The credit rating agency expects Scripps will continue generating operating levels that are consistent with historical trends following recovery from the pandemic.

8. San Diego-based Sharp HealthCare has an “Aa3” rating and stable outlook with Moody’s and an “AA” rating and stable outlook with S&P. The health system has a healthy financial profile, an excellent balance sheet, a solid business position and is the leading provider in a competitive service area, S&P said. The credit rating agency said the system’s financial performance has remained stable despite COVID-19 and the recession.

 

 

Jefferson Health CFO walks back stance that Einstein is at risk without merger

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https://www.beckershospitalreview.com/finance/jefferson-health-cfo-walks-back-stance-that-einstein-is-at-risk-without-merger.html?utm_medium=email

Jefferson Health Announces Partnership with Prepared Health to Coordinate Care Transitions from Hospital to Home - Dina

Jefferson Health walked back its stance that Einstein Health Network’s flagship hospital is at risk of financial failure without a merger during the first day of arguments at a trial, according to Law360.

The Federal Trade Commission’s legal challenge to block the proposed merger of Einstein Healthcare Network and Jefferson Health started in court Sept. 14. The FTC argues that combining the two Philadelphia-based systems would reduce competition in the Philadelphia region and Montgomery County.

In response to the legal challenge, Jefferson Health and Einstein argued that the merger is a matter of survival for Einstein’s flagship hospital. 

The health systems argued that Einstein, which has only had annual operating profits twice since 2012, is on a path to financial failure without the deal and needs $500 million to invest in key capital projects and deferred maintenance. Further, the organizations said that without the infusion, Einstein will continue to weaken “as it is forced to cut services or close facilities.”

However, at day one of the trial, Jefferson Health CFO Peter DeAngelis conceded during arguments that Jefferson had no evidence that Einstein is in danger of insolvency, despite painting the finances as bleak, according to Law360. 

The hearing on the preliminary injunction is expected to last the entire week, but a decision won’t happen by the end of the week. An additional round of filings must be submitted by the FTC and the two health systems by Sept. 28. The judge overseeing the case hopes to issue a decision before Jan. 1, according to The Philadelphia Inquirer. 

 

 

 

 

Atlantic Health System to add 8th hospital

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/atlantic-health-system-to-add-8th-hospital.html?utm_medium=email

Health Services in Rockaway, NJ - Morristown - Atlantic Health

CentraState Healthcare System, a single-hospital system based in Freehold, N.J., has signed a letter of intent to join Atlantic Health System, a seven-hospital system based in Morristown, N.J.

Under the agreement, Atlantic Health will become the majority corporate member in CentraState and both systems would hold seats on CentraState’s board.

The systems signed the letter of intent after expanding their oncology and neuroscience clinical affiliation earlier this year.

“We are thrilled to partner with CentraState to support their longstanding commitment to the community and make this investment in the health and well-being of New Jersey’s residents and families,” said Atlantic Health System President and CEO Brian Gragnolati in a news release. “Having worked closely over the past few years with the CentraState team, we feel fortunate for this opportunity to combine our talents and resources to deliver high quality, affordable and accessible care for patients across the state.”

Both systems will now begin the due diligence process and work toward a definitive agreement. 

 

 

 

 

ACOs in Medicare Shared Savings Program post third year of savings

Posted on by • Posted in Accountable Care Organization (ACO), Health Policy, Health System, Hospital, Hospital Industry, Medical Group, Medicare, Medicare ACO, Medicare Shared Savings Program (MSSP), Physician, Physician Practice Management • Leave a comment

https://www.healthcaredive.com/news/ACOS-medicare-shared-savings-health-affairs-seema-verma/585210/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-09-15%20Healthcare%20Dive%20%5Bissue:29671%5D&utm_term=Healthcare%20Dive

PYA Releases Updated Medicare ACO Road Map White Paper - PYA

Dive Brief:

  • The Medicare Shared Savings Program saved the agency $1.19 billion in 2019, according to CMS performance results of 541 accountable care organizations released Monday.
  • This marks the third year of savings for the value-based care program and its largest yet, CMS Administrator Seema Verma wrote in a Health Affairs blog post Monday. ACOs taking on more risk continued to outperform those that didn’t, Verma wrote, including those under its Pathways to Success rule rolled out in December 2018.
  • ACOs in the Pathways to Success program generated net per-beneficiary savings of $169 compared to $106 for legacy track ACOs, Verma said, suggesting the policies are incentivizing ACOs to deliver more coordinated and efficient care.

Dive Insight:

ACOs are groups of doctors, hospitals and other providers with payments tied to the cost and quality of care they provide beneficiaries. According to Verma’s post, the number of ACOs taking on downside financial risk has nearly doubled since the Pathways to Success program launched for those in the Medicare Shared Savings Program.

New participation options under the rule require accountability for spending increases, generally after two years for new ACOs, and close evaluation of care quality. The new benchmarks and speed at which ACOs would need to take on downside risk was initially shot down by ACOs.

But CMS also created an option for “low-revenue” ACOs, generally run by physician practices rather than hospitals, allowing them an additional year before taking on downside risk for cost increases.

According to the blog post, physician-led ACOs performed better than hospital-led ACOs.

But the National Association of Accountable Care Organizations said only 5% of eligible ACOs took CMS’ offer on the Pathways to Success program structure early and instead chose to remain under the previous MSSP rules.

“To get program growth back on track, Congress needs to take a close look at the Value in Health Care Act, which makes several improvements to the Medicare ACO program and better incentivizes Advanced Alternative Payment Models,” trade group CEO Clif Gaus said in a statement.

Farzad Mostashari, CEO of the Aledade, pointed to physician-led ACOs out-performing hospital ACOs in a statement on the results. “What we need now is to help more practices participate in these models of care,” he said.

Low-revenue ACOs, typically physician-led, had per beneficiary savings of $201 compared to $80 per beneficiary for high-revenue ACOs. Low-revenue ACOs in the Pathways to Success program saved $189 per beneficiary while high-revenue ACOs in the program saved $155 per beneficiary, according to the 2019 performance results.

 

 

 

 

CMS kills controversial Medicaid fiscal accountability rule

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Fiscal Accountability Rule, Medicaid Supplemental Payments • Leave a comment

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What You Need to Know About the Medicaid Fiscal Accountability Rule (MFAR) | KFF

Dive Brief:

  • CMS is axing its proposed Medicaid Fiscal Accountability Rule, agency head Seema Verma announced via Twitter late Monday afternoon, in a move quickly cheered by provider organizations.
  • The rule proposed last year would have increased federal oversight of how states fund their Medicaid programs and potentially resulted in funding cuts for the cash-strapped safety net insurance. Myriad providers, patient advocacy groups and lawmakers in both states and the halls of Congress opposed the rule as a result.
  • “We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study. Therefore, CMS is withdrawing the rule from the regulatory agenda,” Verma said.

Dive Insight:

MFAR was designed to increase fiscal transparency in the 55-year-old Medicaid program, but was quickly met with a firestorm of controversy, with even bipartisan House and Senate members raising concerns it could lead to states being forced to choose between program cuts or raising taxes to replace the lost funding.

One estimate, conducted by Manatt Health for the American Hospital Association, estimated the changes proposed in the rule would cut Medicaid funding by almost $50 billion annually, shrinking the program by 8%.

“Hospitals and health systems will be greatly relieved when the proposed rule is formally withdrawn,” AHA EVP Tom Nickels said in a statement.

Bruce Siegel, CEO of America’s Essential Hospitals, a lobby representing hospitals serving a disproportionate amount of vulnerable patients, called CMS’ decision “wise and welcome … especially as state budgets and providers strain under the heavy financial burden and economic fallout of COVID-19.”

Medicaid is jointly funded by the states and the federal government. Generally, CMS matches every dollar states spend at rates that vary depending on the state, its covered services and its population. There are no limits for how much federal funding a state can receive, and snowballing spending in Medicaid has resulted in concerns about cost control.

Medicaid spending swelled from $456 billion in 2013 to $576 billion in 2016, per CMS data, mostly due to an expanding federal share.

The most acute worries on the federal side stemmed from supplemental payments, or payments state Medicaid agencies give to providers for going above and beyond routine care, normally for high-need patients or those in underserved areas.

Supplemental payments to healthcare providers have increased from 9.4% of all other payments in 2010 to 17.5% in 2017, according to CMS, and are generally uneven across state lines, contributing to geographic funding disparities.

Oversight agencies, including the Government Accountability Office and the Office of the Inspector General, flagged the growth in payments and called for stronger Medicaid oversight in a series of reports from 2006 to 2015.

As a result, CMS proposed the MFAR rule in November 2019. If finalized, it would require states to report Medicaid payment and financing data at the individual provider level, instead of an aggregate, and establish definitions for “base” and “supplemental” payments. It would also have allowed CMS to sunset existing supplemental payment methodologies after up to three years, requiring states to get approval for a longer period, and close financing loopholes that might allow states to re-use federal Medicaid dollars to fund additional payments.

At the outset, CMS attempted to stamp out criticisms the rule could winnow Medicaid funding. “Alarmist estimates that this rule, if finalized, will suddenly remove billions of dollars from the program and threaten beneficiary access are overblown and without credibility,” Verma wrote in a blog post on the proposal in February.

But the rule received more than 4,000 public comments, most of them negative. The swirling concerns about unintended consequences, especially as COVID-19 exacerbates worries about care access, have now brought CMS back to the drawing board on Medicaid fiscal accountability.

As of late Monday, MFAR remained on the Federal Register.

Other actions from the Trump administration to overhaul Medicaid have faced similar backlash, including unpopular efforts to instill requirements linking coverage to work hours and an early 2020 push to cap federal funding for states in exchange for wider latitude in program administration.

 

 

 

 

Why Your Hand Sanitizer May Be Ineffective Or Tainted By Cancer-Causing Chemicals

Posted on by • Posted in Cancer Causing, Coronavirus, Food and Drug Administration (FDA), Hand Sanitizer, Health System, Hospital, Hospital Industry, Impurities, Lawsuit, Legal Liability, Occupational Safety and Health Administration (OSHA), Public Health, Public Safety, Supply Chain • Leave a comment

https://www.forbes.com/sites/ericmack/2020/09/10/why-your-hand-sanitizer-may-be-ineffective-or-tainted-by-cancer-causing-chemicals/?utm_source=newsletter&utm_medium=email&utm_campaign=coronavirus&cdlcid=5d2c97df953109375e4d8b68#115d2e346241

Since the start of the coronavirus pandemic, hand sanitizers have become a sought-after staple of life in a Covid-19-afflicted world. But supply chains have been turned upside down in our new normal, and some sketchy suppliers have at times stepped in to fill the vacuum. The result for consumers could be hand sanitizer that doesn’t work as advertised and might even be filled with impurities that can cause cancer.

When the pandemic set in during the spring, New Mexico’s Rolling Still Distillery began switching gears from making its trademark green chile vodka and other spirits to producing hand sanitizer for sale and free distribution during the early days of lockdown.

In the middle of May, Rolling Still founder Dan Irion (disclosure: Irion and I have lived in the same small town for years and occasionally hang out socially) began to receive a number of emails from bulk ethanol producers, offering up the alcohol for sanitizer production at prices as low as $1.60 a gallon, quite a deal over the $9 per gallon or more Rolling Still normally pays for its key ingredient.

To take advantage of the steep discount, Rolling Still would need to come up with $60,000 and take possession of a huge tank of the stuff.

Irion balked at the offer after he couldn’t get a straight answer about the quality of the ethanol. He asked one of the suppliers if organic alcohol was available and was told simply: “It’s all good. Don’t worry about it.”

He called Brian Coutu from Rolling Still’s regular alcohol supplier, Greenfield Global, who warned him away from what he says is fuel-grade ethanol potentially loaded with chemicals that are known to cause cancer.

Coutu knew this because Greenfield was getting the same cold calls Irion received, but as a large corporation, it could easily test samples.

“They send us a sample and it’s just God awful…it’s got acetaldehyde and benzene and all kind of nasty stuff in it; it’s not pure,” Coutu told me over the phone. “What (fuel producers) are trying to do is dump it off to these companies that run it through charcoal and try to do a million other things to make it USP grade (safe for food, drug or medicinal use), which it’s still not.”

Irion and Coutu both told me that the cold calls had largely stopped by the end of June. The price of ethanol cratered at the end of March as the pandemic took hold and fuel demand dropped. It stayed low through May before edging back near pre-pandemic levels at the end of June.

“Because of the fast and furious nature of the hand sanitizer industry at that time, we might have done it,” Irion says. “I’m sure there are others who saw this as a way to do something good and make money.”

And this is the big question for right now. How much of the sanitizer that made it to warehouses, store shelves and ultimately into our homes, cars and hands was produced from industrial fuel-grade ingredients rather than safe medical or food grade alcohol?

“You’re seeing less pure forms get into the market because there is a shortage of ethanol,” says Mike Sandoval, President and Chief Operating Officer of Santé Laboratories. “We see tert-butyl impurities, we see methanol, we see benzene in many of the hand sanitizers we test… We’ve seen some tequila grade ethanol that when you open the bottle it smells terrible, unless you like tequila… we’re seeing a lack of transparency in this space.”

 

Not just distilleries

Santé Labs works primarily in the hemp and CBD markets, providing quality testing and other services. CBD manufacturers can work with large amounts of ethanol and also turned to making hand sanitizers in the spring.

Sandoval says he began seeing CBD manufacturers and related companies using “untraditional sources” of ethanol from places like Mexico, Guatemala, South America and the fuel industry. The raw alcohol often came with a certificate of authenticity claiming 100 percent purity, but in reality it might actually contain chemical impurities and a significant amount of water.

“They come from a price sensitive market where no one wants to pay for high quality tests… They’re not used to operating in sophisticated manufacturing where you are required to test incoming raw material. For example the ethanol or isopropyl alcohol that goes in a hand sanitizer. You’re supposed to test (according to Food and Drug Administration rules) the purity of that ingredient before you formulate it, and that’s just not happening.”

For its part, the FDA has recently made public guidance on a testing method to detect impurities in hand sanitizers like those seen by Greenfield and Sante Labs.

“The agency’s investigation of contaminated hand sanitizers is ongoing,” the FDA said in an email. “Producing, importing and distributing toxic hand sanitizers poses a serious threat to the public and will not be tolerated.”

The takeaway from all this is that the ethanol market for manufacturers new to the production of hand sanitizer was flooded with sketchy raw alcohol that could be diluted or tainted with carcinogens. If that raw material isn’t tested on the front end, the resulting final product can come out with those impurities and an alcohol concentration that doesn’t meet the claims stated on the label.

The FDA maintains a list of hand sanitizers to avoid because they’ve been found to contain dangerous amounts of methanol, or an insufficient amount of its actual sanitizing ingredient, such as ethanol or isopropyl alcohol. However, the FDA’s enforcement powers are limited. A new waiver program created in response to the pandemic makes it easier for manufacturers to get around substantiating their label claims.

“Nine out of ten people are not meeting the label claim,” Sandoval says. “So most of the hand sanitizer you’re using from stores – and I even saw one from Wal-Mart that was a big brand… their hand sanitizers were crystallizing and turning green. I guarantee that they’re at 50 percent ethanol when they need to be at 70 percent.”

This brings up yet another concern, which is the shortage of proper plastic bottles and containers for sanitizer. Sandoval suspects that some manufacturers may have resorted to using the wrong type of containers, which then react with the alcohol, leaching chemicals into the sanitizer and turning its color.

“This entire supply chain is upside down because there’s a shortage of everything.”

 

Covering the stink of subpar sanitizer

Coutu at Greenfield Global says he’s aware of companies that have purchased their alcohol from unconventional sources, lured by prices as much as 90 percent lower than what Greenfield would charge.

The FDA relaxed the allowable limit of impurities like acetaldehyde and benzene that can make it into hand sanitizer, but Coutu says the limits still only allow a very small amount, whereas the samples Greenfield was testing had levels of contamination ten to 100 times higher than the new limits.

“And the odor on it is just not acceptable. It smells like burnt tequila… there’s some pretty nasty stuff out there and it’s dangerous.”

New services have even popped up this year, with fragrance manufacturers offering up products to help reduce the bad odor of some ethanol-based hand sanitizers.

Irion feels like he dodged a bullet by not jumping at the deeply discounted supply of ethanol others may not have been able to resist.

Rolling Still continued buying the organic alcohol it uses in both its spirits and sanitizer. It’s now ramping up production of sanitizer, which Irion says has no need for added fragrances to mask any ethanol odors, but some local osha and sage is infused to lighten the scent.

The alcohol used is also distilled five times just to make sure all impurities are removed.

 

 

 

 

Losing the edge on telemedicine?

Posted on by • Posted in Consumer Loyalty, Consumer Preferences, Consumer Trust, Consumerism, Coronavirus, Health System, Hospital, Hospital Industry, Office Visit, Pandemic, Physician, Primary Care, Telemedicine, Virtual Care Strategy, Virtual Healthcare, Virtual Visit • Leave a comment

https://mailchi.mp/365734463200/the-weekly-gist-september-11-2020?e=d1e747d2d8

What8217s Missing in the Health Care Tech Revolution

At the beginning of the pandemic, physicians and health systems implemented telemedicine solutions with unprecedented speed. In doing so, they went from mostly lagging behind payers and disruptors in digital medicine, to becoming the anchors who kept patients and doctors connected during the greatest health crisis in a century.

But over the past few weeks, we’ve detected a marked shift in the tone and focus of conversations around telemedicine with doctors and executives. Universally, systems have seen a drop in virtual visits as in-person care has returned—and most agree that today’s levels of telemedicine visits are lower than ideal.

“We peaked at 45 percent of outpatient visits delivered virtually in early May. Now telemedicine accounts for just five percent,” one physician leader told us. “I don’t know what ‘percent virtual’ is ideal, but I’m pretty sure it’s more than five percent.” Another leader described a shift from “rally to reality”.

At the height of the crisis, the entire system was singularly focused on keeping patients connected to care, bolstered by a loosening of regulatory and payment restrictions.

As systems now plan for a long-term virtual care strategy, we’re sensing a shift in focus to pre-COVID challenges: operations (centralization is needed to create a sustainable model, but each doctor wants to do virtual visits his own way), payment (should we really invest before we’re sure health plans will continue to pay at parity?), and turf battles (reemerging political discussions of who “owns” virtual care strategy).

Health plans, retailers and disruptors recognize the power of virtual care to build relationships and loyalty with consumers—and will invest heavily behind it. Providers have the advantage today. But to keep it, they’ll have to get out of their own way and continue to build, scale and refine their virtual care platforms.

 

 

 

An Unpleasant Surprise

Posted on by • Posted in 2020 Election Issues, Balance Billing, Employer-Based Health Insurance, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Lobbyist, Out of Pocket Expenses, Out-of-Network, Pandemic, Private Equity, Rev Cycle Management, Revenue Cycle, Surprise Bills, Underinsured, Uninsured • Leave a comment

An Unpleasant Surprise

An Unpleasant Surprise - Tradeoffs

Surprise medical bills have become a major issue for Americans, but federal legislation to protect consumers continues to stall. Is Congress getting closer to halting this practice?

Listen to the full episode below, read the transcript or scroll down for more information.

https://podcasts.google.com/feed/aHR0cHM6Ly9yc3MuYWNhc3QuY29tL3RyYWRlb2Zmcw/episode/YTQzMDkzOGYtY2Q3MS00ZTU0LWI0ZTAtZGIyMGM3YWQ0ZTk4?sa=X&ved=2ahUKEwiRrfOb48zrAhXvmnIEHT-bBvgQkfYCegQIARAF&hl=en

The Basics: The Scope of the Problem

Surprise bills can occur when patients with insurance unknowingly receive care from an out-of-network provider while at an in-network facility (such as a bill from an anesthesiologist for a scheduled surgery).

That provider is not bound by a set rate negotiated with an insurer and may charge more for a service than the insurer is willing to pay, and patients can end up on the hook for the difference.

It is difficult to capture the full extent of the problem, but research shows that surprise bills, also called balance bills, occur often, and have only been increasing in frequency and size over the past few years. 

42% of hospital and ER visits may come with an unexpected charge
$2,000 average size of a surprise bill for a hospital visit
66% of Americans fear surprise bills
80% of Americans support surprise bill protections

The Source: Who’s To Blame?

Physicians

Hospitals employ some physicians directly, but many also contract with speciality physician groups of surgical assistants, anesthesiologists, radiologists, emergency medicine doctors and pathologists who may not be in the same insurance networks as the hospital. This is why most surprise bills occur. Research shows that private equity firms also play an important role, buying up speciality physician groups and using surprise billing as a core part of their business model.

Insurers

Insurers often take a lot of heat for the price of health care, but they play a more limited role in surprise billing. They can create narrow networks that leave hospitals or doctors out and open the door to balance billing. Insurers also do a poor job of maintaining accurate in-network provider directories, which means patients may think they’re choosing an in-network doctor when they are not.

Hospitals

While surprise bills from hospitals are less common than from physicians, they do occur when, for instance, a hospital is not in a patient’s network, but the patient is rushed there because of an emergency.

Ambulances

Air and ground ambulances rides are another source of surprise bills. One analysis showed that air ambulances resulted in median potential surprise bills of almost $21,700.

The Fixes: The Legislation Landscape

Federal Proposals

Over the past two years, Congress has considered at least four bipartisan bills to protect patients from surprise charges, but all four have stalled. The proposals offer different approaches to determine how much insurers will pay out-of-network providers. These bills typically address the problem by adopting a payment standard, arbitration process or a hybrid of the two.

Payment Standard

Insurers reimburse providers for out-of-network bills based on a set amount. Most bills propose using established in-network rates.

Arbitration

This process requires an insurer and provider to submit payment offers to a neutral party who makes the final call.

Hybrid

This approach combines the payment standard with arbitration to resolve disputes. An insurer pays a set amount, and if the provider disagrees, it can initiate arbitration.

State Laws

With federal solutions at a standstill, 30 states have passed varying levels of protections from surprise billing. As of July, 2020, 16 states have more comprehensive protections, which ensure that insured patients are only responsible for paying in-network costs, even when receiving care from out-of-network providers or emergency services at an out-of-network facility. Georgia was the latest state to pass such a law in July 2020. The other 14 states offer far more limited protections.

But even states with comprehensive protections cannot protect all patients from surprise medical bills. States are not able to regulate job-based coverage that falls under a federal law known as the Employee Retirement Income Security Act, which applies to most employer sponsored insurance. These patients remain vulnerable to surprise medical bills until Congress takes action to ban the practice.

Click on the map below for an interactive map from the Commonwealth Fund that details each state’s protections.

State Balance-Billing Protections | Commonwealth Fund

The Sticking Point: Will Congress Pass Protections?

Despite strong bipartisan support for protecting patients from surprise bills, disagreement comes over how much physician groups should charge and how much insurers should pay. Essentially, resolving this issue may mean Congress has to pick sides.

As a result, stakeholders such as hospitals and private equity-backed physician groups, in particular, have pushed back on federal legislation, arguing that banning surprise billing will cripple their bottom line. These equity-backed physician groups have powerful lobbying groups, and in 2019, spent at least $5 million to persuade lawmakers to halt the legislation.

The pandemic has increased the risk that patients will unknowingly receive care from an out-of-network provider or at an out-of-network facility. The Trump administration tried to limit surprise bills for those in need of COVID-19 treatment by banning hospitals and providers that receive money from its Provider Relief Fund from sending balance bills to patients. But this approach leaves significant gaps and has had mixed success.

 

 

Healthcare jobs grew by 75K in August as industry recovers from job losses due to COVID-19

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https://www.fiercehealthcare.com/hospitals/healthcare-jobs-grew-by-75k-august-as-industry-recovers-from-job-losses-due-to-covid-19

The healthcare industry added 75,000 jobs last month, a decline compared with the 126,000 that were added in July, the latest federal jobs report shows.

But there are some bright spots for the industry that is still recovering from major unemployment earlier this year sparked by job losses due to the COVID-19 pandemic.

The Bureau of Labor Statistics’ jobs report released Friday showed that hospitals continue to add more jobs after several major subsystems furloughed and laid off workers at the onset of the pandemic in March.

Hospitals added 14,000 jobs in August, which was below the 27,000 jobs the industry added in July.

The industry shed 26,000 jobs in May as hospitals took massive revenue hits from the cancellation of elective procedures and lower patient volume due to COVID-19.

Job numbers continue to recover robustly for other sectors of the healthcare industry.

Physician offices added 27,000 jobs and dentists another 22,000 in August. Home healthcare agencies added 12,000 positions in August.

But things continue to get worse for nursing homes.

Nursing homes and residential care facilities lost 14,000 jobs. But it was the lowest number of job losses the industry has faced in months.

In July the sector lost 28,000 jobs. In June, 20,000 positions were shed.

While several parts of the healthcare industry are adding jobs, the overall picture has been bleak. The federal government reported last month that healthcare employment has been down by nearly 800,000 jobs since February.

Things could continue to get worse for both hospitals and physician offices. Experts predict that hospital volumes, which have rebounded since major drops in March and April, are still below pre-pandemic levels for some facilities.