Could coronavirus derail the decades-long shift to value-based care?

As the coronavirus sickens tens of thousands of Americans while pressuring the bottom lines of medical providers, analysts worry the pandemic could also hit pause on the decades-long march toward value-based care, as hospitals and doctors look to recoup revenue in the short-term instead of putting more dollars at risk.

Massive health systems and independent physician offices alike are diverting funds to shore up resources like personal protective equipment, ventilators and staff to prepare for an expected influx of COVID-19 patients or to cope with those already there. Expenses are skyrocketing as providers halt non-essential visits including lucrative elective procedures like joint replacements, winnowing down a major source of revenue.​

Clinicians in value-based payment arrangements face higher levels of financial risk than their fee-for-service counterparts. Money spent preparing for the coronavirus and treating COVID-19 patients will be a sunk cost and they could be dinged financially again at the end of the year when their spending and performance is evaluated.

Already, the coronavirus is leading providers to think about exiting the models.

survey published this week of more than 220 accountable care organizations nationwide found almost 60% are likely to drop out of their risk-based model to avoid financial losses. Some 77% are “very concerned” about the coronavirus’ impact on their 2020 performance.

“The value-based movement is at a critical juncture,” wrote National Association of ACOs CEO Clif Gaus in a letter to CMS Administrator Seema Verma last month.

Fee-for-service still dominates — roughly 40% of healthcare payments made in 2018 were under fee-for-service, according to the Health Care Payment Learning & Action Network (LAN) — but it’s been on the downswing. One in three healthcare payments currently flows through some sort of alternative payment model, and that has been projected to grow.

Among the four main types of value-based arrangements — shared risk, global capitation, bundled care and shared savings —​ most require an upfront financial commitment. And providers are unlikely to put more capital at risk given the current economic situation, analysts told Healthcare Dive, instead focusing on making up the losses they sustained during the outbreak by ramping up capacity.

Doctor’s offices and hospitals will reschedule delayed procedures and even operate on weekends to recapture as much revenue as possible before they’re likely to consider taking on more risk.

“Even if you’re not in the hotspots, you are preparing right now. This puts on hold a lot of the initiatives that have been on the value-based side of things,” Jefferies senior healthcare analyst Brian Tanquilut told Healthcare Dive. “I don’t think the value-based discussion goes away, but I think it will take a recovery of the hospital system before it can go there.”

Pleas for loss waivers

The National Association of ACOs told CMS in mid-March that ACOs in Medicare’s flagship ACO program the Shared Savings Program, along with other shared risk models like the Next Generation ACO model and the upcoming Direct Contracting initiative, could face losses beyond their control because of the pandemic.

CMS did pause some reporting requirements for value-based initiatives late last month. The agency pushed back the deadline for groups participating in the Medicare ACO program, Merit-based Incentive Payment System and the Hospital Readmissions Reduction Program to report quality data, or waived reporting entirely for the fourth quarter of 2019. The relaxation was framed as a way to help value-based organizations free up time and resources amid the pandemic.

But provider groups including NAACOS and the American Hospital Association have lobbied aggressively for the Trump administration to forgive all ACO losses for 2020. CMS is reviewing their request.

But all normal rules have gone out the window, experts say, and it’s almost impossible to move the needle toward value in the future when providers are facing a tsunami of patients now.

“This is not about managing a population. This is about doing everything you can to keep these people alive,” Dean Ungar, vice president of Moody’s Investors Service, told Healthcare Dive. “Coronavirus is really a five-alarm fire. But if your building’s on fire, that doesn’t really tell you how to maintain your business in normal circumstances.”

Silver lining?

Some, however, are more optimistic that the unique financial challenges brought on by the pandemic highlight the problems with the traditional fee-for-service model and could even nudge providers toward value-based arrangements down the line.

“If all of your revenue is based on patients walking in the door, when they can’t walk in the door anymore, you’re kind of up the creek without a paddle,” Dan Bowles, SVP of growth and network operations at accountable care organization Aledade told Healthcare Dive. “You need to find a way to create non-visit-based revenue.”

Some hope the pandemic could help the value-based movement in the long term as practices look for ways to uncouple revenue from patient volume. And, as medical costs continue to rise, accounting for 19% of the country’s GDP, any pause in the shift to value-based care due to the coronavirus is likely to be a short detour, not a complete derailment.

“Maybe some providers are going to see it in a different light when their business kind of dries up — see that there’s a benefit to it,” Ungar said. “Ultimately, it’s a trend of where things are going, but it’s a big ship and it’s moving slowly.”

And value-based care arrangements were built predominantly for the populations being hit hardest by the coronavirus: those with serious underlying medical conditions like chronic lung disease or severe obesity.

If those vulnerable patients were being treated in value-based arrangements, it’s possible more COVID-19 cases could have been caught earlier before they became life-threatening, Moody’s analyst Stefan Kahandaliyanage told Healthcare Dive. That could renew industry’s focus on managing the health of those most at-risk from novel infectious diseases in the future.

“Costs are very high and there’s been a pandemic,” Kahandaliyanage said. “Let’s get more healthy before the next pandemic comes.”

Duke Health, Geisinger sue HHS over Medicare payments

January Healthcare Industry Lawsuits and Settlements - Elite Learning

Five hospitals recently sued HHS over its calculation of Medicare Part A disproportionate share hospital payments for patients who were enrolled in Medicare Advantage plans under Part C of the Medicare Act.

The federal lawsuit was filed Dec. 21 by Duke Raleigh (N.C.) Hospital, Durham (N.C.) Regional Hospital, Geisinger Medical Center in Danville, Pa., Geisinger Wyoming Valley Medical Center in Wilkes-Barre, Pa., and The Washington (Pa.) Hospital. 

The hospitals’ lawsuit takes issue with a Medicare policy change, adopted in 2004, that included a new methodology for allocating Medicare Part C days in the disproportionate share hospital formula. The appeals court has ruled against HHS in three actions challenging its attempts to apply its Part C days policy to deny DSH payments to hospitals. However, the hospitals argue that HHS is disregarding those decisions and a decision by the U.S. Supreme Court. 

“The agency has continued to apply the Part C days policy adopted in the now-vacated 2004 rule in violation of these decisions, including in the payment determinations at issue for the plaintiff hospitals in this case, in a recently issued proposed rule seeking to re-adopt the same 2004 policy retroactively, and in a ruling that would leave undisturbed the payment determinations from which hospitals have appealed and, as construed by the agency’s administrative Board, not permit further administrative or judicial review of those determinations,” the complaint filed Dec. 21 states. 

The hospitals argue that HHS’ attempts to apply the policy should be rejected. The hospitals are asking the court to declare the final payment determinations reflecting the policy change invalid. 

Kaiser Permanente halts elective surgeries at some California hospitals

Vigil outside Kaiser honors suicide victims denied mental health care –  SFBay

Twenty-one Kaiser Permanente hospitals in Northern California are suspending elective, non-urgent procedures through Jan. 4 as they continue to face a surge in COVID-19 hospitalizations, according to The Mercury News.

The Oakland, Calif.-based system announced the suspension Dec. 26, days after Chairman and CEO Greg Adams said during a news conference, “We simply will not be able to keep up if the COVID surge continues to increase. We’re at or near capacity everywhere.”

California reported a record-high 20,059 current COVID-19 hospitalizations Dec. 27, a 13 percent increase from one week prior, according to The COVID Tracking Project.

Find a running list of other health systems that have adjusted their elective surgery timelines, organized by state, here

CHI Franciscan, Virginia Mason ink definitive agreement to combine

Virginia Mason and CHI Franciscan Announce Merger

Two hospital systems in Washington state, CHI Franciscan and Virginia Mason Health System, have signed a definitive agreement to combine through a joint operating company that would be a subsidiary of Chicago-based CommonSpirit Health. 

The two organizations inked the agreement Dec. 21 and made it public Dec. 23. The parties signed a letter of intent to explore a combination in July.

The combination would create a nine-hospital system. Two of the hospitals would be from Seattle-based Virginia Mason and seven would come from Tacoma, Wash.-based CHI Franciscan, which is part of CommonSpirit Health.

News of the planned merger prompted Virginia Mason’s 256-bed hospital in Yakima, Wash., to part ways with the health system before it combined with CHI Franciscan. The board of Virginia Mason Memorial said it wants to become an “independent, local healthcare system” instead of joining a larger system. 

The two health systems said they expect the transaction to be finalized around Jan. 1, 2021, pending regulatory approval. 

Fired Nurse Faces Board Review for Wearing Hospital Scrubs

Fired Nurse Faces Board Review for Wearing Hospital Scrubs | MedPage Today

In late November, Cliff Willmeng’s wife handed him a sealed envelope at their Minneapolis home “with some trepidation,” he recalled. He looked at the sender printed on the front: “Minnesota Board of Nursing.” Willmeng, a registered nurse, opened the letter and read that the board was investigating his conduct as a nurse at United Hospital in St. Paul, from which he’d been fired in May. Clearly his license was at stake.

Willmeng was disappointed, but not surprised. He believes the review is due to his standing up for his own safety and that of other nurses, and for filing a lawsuit and union grievance against United’s parent company, Allina Health, after his termination.

He also thinks the investigation, like his firing, has been orchestrated to scare other healthcare workers away from reporting safety violations and concerns as the pandemic rages, and to make an example out of the former union steward.

The investigation is being led by a former Allina executive: “It feels meant to intimidate me,” he said.

Taking a Stand for Safety

Willmeng is a 13-year nursing veteran, husband, and father, who began working at United in October 2019.

When the pandemic hit late last winter, managers instructed nurses to use and reuse their own scrubs rather than hospital-issued scrubs. They were asked to launder their scrubs themselves at home.

Willmeng and others worried about bringing the virus home and pressed for the hospital scrubs. These scrubs were available, he said, and healthcare workers were permitted to wear hospital gear at Abbott Northwestern, another Allina hospital in Minneapolis.

In addition, while United managers told staff their laundering co-op could not keep up with demand for all the scrubs, the co-op denied that assertion, said Brittany Livaccari, RN, an ER nurse and union steward at United.

Willmeng addressed his concerns with management, filed state OSHA complaints, and enlisted the Minnesota Nurses Association (MNA). “He was taking action 100% to protect himself and to protect his patients,” Livaccari said.

But management did not change its policy, which was devised before the pandemic, and pointed to early-pandemic CDC and Minnesota Department of Health (MDH) guidelines — even when Willmeng shared emerging reports suggesting the policy was jeopardizing safety.

“It did feel like a pissing match,” Livaccari said. “We didn’t feel like we were being protected. … We weren’t being valued.”

Managers repeatedly wrote up Willmeng and colleagues who wore the hospital scrubs despite the policy. “It definitely felt like an intimidation tactic — ‘You’re going to do this, you’re going to follow these policies,'” Livaccari said. “A lot of staff chose to stop wearing those scrubs because they needed their job, they have families to pay for, they were afraid.”

Willmeng continued to wear the hospital scrubs. “I had to decide whether that policy was most important, or the safety of my workplace and public health and my family,” he said.

On May 8, the hospital terminated Willmeng. He said its stated cause was violating hospital policies regarding uniform code and a respectful workplace.

Two weeks later, the local nurses’ union held a rally that drew hundreds of supporters for Willmeng and blasted the hospital’s scrub policy.

‘I’m Not a Bad Nurse’

In June, Willmeng sued Allina for whistleblower retaliation and wrongful termination. The case is scheduled to be heard next August.

His union grievance is set to be arbitrated in January. He maintains his firing was not for “just cause” because United’s uniform code policy violated standard nursing practices.

Willmeng has been running the website WeDoTheWork, which describes itself as “worker-run journalism.” It’s an independent but union-affiliated publication that “unflinchingly tells our side of the story, and takes the fight to management.”

He’s been publicizing his case on that website. In his Twitter account he notes, “I believe in the working class, democratically run economy, socialism, and revolution.”

Willmeng is applying for jobs, but despite his experience, a national nursing shortage, and reports of severe understaffing as hospitalizations surge again, Willmeng has not even been interviewed by any of the roughly 20 medical centers he has applied to.

He thinks he is being blackballed. “I’m not a bad nurse,” he said.

The board letter cited these concerns: “On April 16, 2020, you received a written warning for not following the uniform policy,” reads one item, citing a report shared with the board. “On May 5, 2020, you were issued a final written warning for repeatedly violating policy. … On May 8, 2020, you were terminated from employment based on violating hospital policies, behavioral expectations, code of conduct, and not following the directions of your manager.” The letter asks Willmeng to respond to eight questions.

“This looks like it was taken right out of my HR file,” he said. The board will not reveal who reported him, citing confidentiality policies. But he is certain — given the detail in the letter — that it was Allina/United management.

The nursing board cannot comment on Willmeng’s review to protect confidentiality, said executive director Shirley Brekken, MS, RN. The board receives about 1,200 complaints annually and first determines whether a complaint would merit disciplinary action if true. If so, it launches a review.

Allina declined to answer questions via a spokesperson, citing the lawsuit. “We cannot appropriately retain employees who willfully and repeatedly choose to violate hospital policies,” according to an emailed statement. Throughout the pandemic Allina has been following CDC and MDH guidelines, “which do not consider hospital issued scrubs as PPE [personal protective equipment].”

“In the early days of the pandemic, our local and national supply chain was extremely stressed,” the statement continues. “Our practices are aligned with other local and national hospitals … and have enabled us to allocate the appropriate supplies for daily patient care and ongoing care for COVID-19 patients.”

But United healthcare workers still lack hospital scrubs and enough N95 masks, Livaccari said, and the hospital is severely understaffed as the patient load increases. “We hear, ‘It’s a pandemic. You have to do more with less,'” she said. “It’s a really bad situation.”

Retaliation and Intimidation

Some think Willmeng’s review was initiated primarily to retaliate against him, not to protect public health and safety.

“Hospitals, they want a docile workforce, they want a workforce they can control,” said John Kauchick, RN, a retired 37-year nursing veteran who advocates for workplace rights. They do so “by fear and intimidation,” he added. “A nurse’s number one fear is to be turned in to a board of nursing for anything.”

“If you’re a whistleblower and you speak truth to power, that will get you a disciplinary hearing even more so than if there is patient harm.”

The letter was drafted more than six months after Willmeng was fired, and after he filed the lawsuit and union grievance. Just before he received the letter, he was elected to the MNA board. The timing strikes Willmeng and Kauchick as significant.

“If you think there’s been a violation, you are supposed to report that in a much shorter time period,” Kauchick said. Kauchick thinks Allina filed the complaint as leverage, to persuade Willmeng to drop the grievance and lawsuit.

But Livaccari noted the process can take up to six months, and that every firing is supposed to be reported to the board.

Like Kauchick, she takes umbrage with the review’s leader: Stephanie Cook, MSN, RN, a board nursing practice specialist who spent 24 years as a director with Allina. She was a member of multiple Allina committees, including its ethics committee, according to reports. She was with Allina as recently as 2018. Brekken confirmed her employment with Allina, noting that it’s “a very large system.”

Regardless, that’s a conflict of interest, Kauchick and Livaccari said, arguing that Cook should not be part of the review. “It’s just so blatantly obvious. How are you going to look at this with an unbiased lens when you worked for the organization that says Cliff was in the wrong?” Livaccari said. “It’s so inappropriate.”

This is not uncommon, Kauchick said, noting state nursing board reviews are “really just designed to get rid of whistleblowers. It’s like a buddy system. They hire higher-ups from big hospital systems. It’s just incestuous.”

Brekken was aware of Cook’s background before a colleague assigned this review to Cook, she said, noting the board vets staff for personal involvement in cases. Brekken “might consider” removing Cook from the review given her connection to Allina, she said, but added: “Many individuals on our staff may have worked for a particular health system throughout their career.”

The board could throw out the complaint or take action. Such actions typically range from a reprimand to revoking a nurse’s license, Brekken said. A staff member and board member together will review the report and Willmeng’s response, but she said the board itself makes final decisions.

Willmeng is also focused on the grievance, which asks Allina to provide full back pay and reinstate him.

“I would not feel comfortable; I’d feel very anxious” going back, he said. “But I’m an ER nurse. I belong in the ER…. It’s important for a frontline healthcare worker to demonstrate that when they stand up and speak truthfully and assertively about working conditions and patient safety, that they can’t just be triangulated.”

His salary — about twice his current unemployment benefits — is also a draw, he acknowledged.

Meanwhile, he continues applying for other jobs. His life insurance cost doubled and his family switched to his wife’s lesser health insurance plan, he said. A fourth-grade teacher with a local public school system, her salary is the primary support for themselves and their two children.

Willmeng also just hired an attorney at $250 an hour to help him respond to the board letter. “It’s not something I take lightly,” he said. “There’s cause for real concern. That’s my nursing license, that’s everything.

Kaiser Permanente CEO: ‘We’re at or near capacity everywhere’

Kaiser Permanente's health system reaches carbon-neutral status |  FierceHealthcare

Hospital executives in California are sounding alarms on their inpatient capacity as COVID-19 hospitalizations surge in the state, according to ABC News.

As of Dec. 23, California is among the eight states where the virus is spreading quickest. On Dec. 22, the state saw one of its biggest jumps in one-day COVID-19 hospitalizations, with an additional 653 patients admitted to hospitals

Officials from Oakland-based Kaiser Permanente, San Francisco-based Dignity Health and Sacramento-based Sutter Health said during a Dec. 22 news conference that they are facing capacity issues. In some cases, COVID-19 patients are being treated in hallways, gift shops and conference rooms.

Greg Adams, the chairman and CEO of Kaiser Permanente, said during the conference, “We simply will not be able to keep up if the COVID surge continues to increase. We’re at or near capacity everywhere.”

Many hospital officials said Thanksgiving gatherings contributed to the surge. The executives urged Californians to not gather for Christmas and New Year’s. 

COVID-19 patient killed by hospital roommate in California, police say

COVID-19 patient charged with murder in deadly beating of fellow patient at California  hospital - ABC13 Houston

A patient accused of fatally beating his roomate at Antelope Valley Hospital in Lancaster, Calif., has been arrested and charged with murder, elder abuse and a hate crime enhancement, according to the Los Angeles County Sherrif’s Department

The victim, an 82-year-old man, was being treated for COVID-19 and sharing a room with the suspect, identified as 37-year-old Jesse Martinez. The victim, whose name has not been released, began to pray in his hospital room on Dec 17. That act upset Mr. Martinez, who allegedly struck the victim with an oxygen tank. The man died of his injuries Dec. 18, police said.

Mr. Martinez is being held at the Twin Tower Correctional Facility in Los Angeles, and his bond is set at $1 million. He’s scheduled to appear in court Dec. 28.  

Police said the investigation into the incident is ongoing, and the motive is not immediately clear. 

Hospital finances bleak as 2020 nears end

Hospital margins and revenues continued to fall in November, while expenses remained above 2019 levels, according to Kaufman Hall’s December Flash report, which examines metrics from the previous month. 

The median hospital operating margin in November was 2.5 percent year to date with funding from the Coronavirus Aid, Relief and Economic Security Act. Without the funds, the median hospital operating margin narrowed to -1.1 percent. 

Skyrocketing COVID-19 cases are already stretching hospitals’ capacity, and Kaufman Hall expects the situation to worsen in coming months as holiday gatherings and colder weather push case counts up even further. 

7 hospital mergers called off in past year

Garner Health Law Corporation

There were several hospital mergers that, at some point in their lifetime, were called off in the past year. 

Below are seven hospital mergers called off since December 2019, beginning with the most recent:

1. Sanford, Intermountain halt merger talks
Sanford Health indefinitely suspended discussions in early December about a planned merger with Salt Lake City-based Intermountain Health because of the abrupt exit of Sanford’s longtime president and CEO, Kelby Krabbenhoft. Sanford and Intermountain announced in October they had signed a letter of intent to merge, with completion of the deal expected in 2021. The combination would create a $15 billion, 70-hospital system. In its statement issued Dec. 4, Sanford said it will pause current merger and acquisition activity while it addresses other organizational needs. 

2. Advocate Aurora, Beaumont cancel merger
Advocate Aurora Health, which has dual headquarters in Milwaukee and Downers Grove, Ill., and Southfield, Mich.-based Beaumont Health called off their merger plan Oct. 2, about five months after signing a letter of intent to combine. The proposed merger faced criticism from some Beaumont physiciansnurses and donors. In August, the Beaumont board of trustees confirmed it would delay a vote on the planned merger. The trustees decided to postpone the vote after seeing the results of a survey, completed by 1,500 of the system’s 5,000 physicians, that revealed a lack of confidence in Beaumont’s leadership and concerns about its proposed merger with Advocate Aurora. The merger of Beaumont and Advocate Aurora would have created a $17 billion system with 36 hospitals.

3. California hospital ends merger talks with Dignity Health
County officials overseeing Ventura (Calif.) County Medical Center ended merger talks with San Francisco-based Dignity Health in July after leaders from both parties deemed an affiliation too risky. County Health Care Agency Director Bill Foley said Dignity officials considered it a risk to take on public hospitals, while county managers were concerned they would give up control but still face risk for buildings and finances. County officials were also concerned VCMC would lose its designation as a public hospital under either a lease or a contract with Dignity, which would put roughly $150 million in annual funding at risk. 

4. Beaumont, Summa Health cancel $6.1B merger plan  
Southfield, Mich.-based Beaumont Health called off a proposed merger with Akron, Ohio-based Summa Health in late May. They ended talks about five months after signing a definitive agreement, under which Summa Health would have become a subsidiary of Beaumont. The proposed deal, which had already received all necessary regulatory approvals, would have created a nonprofit system with 12 hospitals and $6.1 billion in annual revenue. 

5. 4 Chicago hospitals call off $1.1B merger plan  
Chicago-based Advocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital and St. Bernard Hospital signed a letter of intent in January to combine into a single health system and build at least one new hospital and several community health centers. The hospitals called off the deal in late May after government funding for the $1.1 billion plan fell through. 

6. Geisinger, AtlantiCare sever merger
Danville, Pa.-based Geisinger and Atlantic City, N.J.-based AtlantiCare severed their merger in March, about five years after the two systems combined. The separation of the two organizations is expected to take up to 18 months, the two organizations said in March. 

7. Wisconsin health systems call off merger
La Crosse, Wis.-based Gundersen Health System and Marshfield (Wis.) Clinic Health System abandoned plans in December 2019 to merge into a 13-hospital rural healthcare network. The two systems said they “mutually decided to remain independent” after several months of productive and collaborative discussions.

UMass Memorial, Harrington file merger plans

https://www.wbjournal.com/article/umass-memorial-harrington-file-merger-plans

Harrington Hospital in Southbridge

UMass Memorial Health Care and the Harrington HealthCare System have filed paperwork for regulatory approval for their plans for Harrington to become part of the UMass Memorial system.

Worcester-based UMass Memorial said Tuesday the two hospital systems filed the first in a series of required filings with state regulatory agencies for their proposed marriage. The review process, to include Massachusetts Health Policy Commission and Attorney General’s Office, is expected to take up to four months.

UMass Memorial and Harrington first said in January they intended on Harrington being folded into the much larger UMass Memorial system, which is the largest employer in Central Massachusetts. Harrington, whose main hospital is in Southbridge, has remained one of a small and shrinking number of independent hospitals in the state.

The two systems already collaborate through a system allowing Harrington care providers to consult remotely with UMass Memorial specialists in caring for critically ill patients. Harrington will also be brought into UMass Memorial’s electronic patient records system as part of the planned integration.

UMass Memorial has committed to operating Harrington’s hospital campuses in Southbridge and Webster as acute-care hospitals for at least five years. Upon regulatory approval, Harrington will join UMass Memorial’s Medical Center in Worcester, Marlborough Hospital and Clinton Hospital.