The Biden administration has proposed giving rehabilitation facilities a 2.2% payment increase for the 2022 federal fiscal year that starts in October.
The payment rate outlined in a proposed rule released late Thursday is slightly below the 2.4% that CMS gave rehab facilities for the 2021 federal fiscal year. CMS proposed in a separate rule a 2.3% increase for payments to inpatient psychiatric facilities as well.
Both payment rules also give updates on outlier payments, which help facilities deal with the costs of treating extremely costly beneficiaries.
For rehab facilities, CMS proposes to maintain outlier payments to 3% of the total facility payments for fiscal 2022, which begins on Oct. 1.
CMS also aims to keep the outlier payments for psychiatric facilities at 2% for 2022.
A major change for both rules is a new addition aimed to track coverage of COVID-19 vaccinations among healthcare personnel.
CMS also wants to add vaccination coverage among healthcare personnel as a measure to the quality reporting program for psychiatric facilities. The program outlines quality metrics that facilities need to meet.
“This measure would be reported using the COVID-19 modules on the [Centers for Disease Control and Prevention’s] National Healthcare Safety Network web portal,” a fact sheet on the psychiatric payment rule said.
The agency also is proposing a similar measure for rehab facilities to report any vaccinations of healthcare personnel for COVID-19.
“This proposed measure is designed to assess whether [IRFs] are taking steps to limit the spread of COVID-19 among their [healthcare personnel], reduce the risk of transmission within their facilities and help sustain the ability of [rehabilitation facilities] to continue serving their communities through the public health emergency and beyond,” a fact sheet on the rehab rule said.
In the rehab facility rule, CMS also asked for comments on how to improve health equity for all patients.
CMS is seeking comments on whether to add more measures that address patient equity in standardized patient assessment data elements, which must be collected by facilities after post-acute care.
The agency also wants comments on ways to attain health equity for psychiatric facilities as well.
“CMS is committed to addressing the significant and persistent inequities in health outcomes in the United States through improving data collection to better measure and analyze disparities across programs and policies,” the agency said in a fact sheet.
Comments for both rules are due by June 7.
Americans in Massachusetts receive the best healthcare in the country, while those in Georgia receive the worst, according to an analysis by WalletHub, a personal finance website.
To identify the best and worst states for healthcare, analysts compared the 50 states and the District of Columbia across 44 different measures of healthcare cost, access and outcomes. The metrics ranged from average hospital expenses per inpatient day to share of patients readmitted to hospitals. Read more about the methodology here.
Here are the 10 states with the highest overall rank across cost, access and outcomes, according to the analysis:
3. Rhode Island
4. District of Columbia
5. North Dakota
10. South Dakota
Here are the bottom 10 states on healthcare cost, access and outcomes combined:
4. North Carolina
8. South Carolina
Access the full list here.
Over the past months, the country and the economy have radically shifted to unchartered territory. Now more than ever, we must reexamine how we spend health care dollars.
While the COVID-19 pandemic has exposed challenges with health care in America, we see two overarching opportunities for change:
1) the under-delivery of evidence-based care that materially improves the lives and well-being of Americans and
2) the over-delivery of unnecessary and, sometimes, harmful care.
The implications of reallocating our health care spending to high-value services are far-ranging, from improving health to economic recovery.
To prepare for coronavirus patients and preserve protective equipment, clinicians and hospitals across the country halted non-urgent visits and procedures. This has led to a substantial reduction in high-value care: emergency care for strokes or heart attacks, childhood vaccinations, and routine chronic disease management. However, one silver lining to this near shutdown is that a similarly dramatic reduction in the use of low-value services has also ensued.
As offices and hospitals re-open, we have a once in a century opportunity to align incentives for providers and consumers, so patients get more high-value services in high-value settings, while minimizing the resurgence of low-value care. For example, the use of pre-operative testing in low-risk patients should not accompany the return of elective procedures such as cataract removal. Conversely, benefit designs should permanently remove barriers to high-value settings and services, like patients receiving dialysis at home or phone calls with mental health providers.
People with low incomes and multiple chronic conditions are of particular concern as unemployment rises and more Americans lose their health care coverage. Suboptimal access and affordability to high-value chronic disease care prior to the COVID-19 pandemic was well documented As financially distressed providers re-open to a new normal, hopeful to regain their financial footing, highly profitable services are likely to be prioritized.
Unfortunately, clinical impact and profitability are frequently not linked. The post-COVID reopening should build on existing quality-driven payment models and increase reimbursement for high-value care to ensure that compensation better aligns with patient-centered outcomes.
At the same time, the dramatic fall in “non-essential care” included a significant reduction in services that we know to be harmful or useless. Billions are spent annually in the US on routinely delivered care that does not improve health; a recent study from 4 states reports that patients pay a substantial proportion (>10 percent) of this tab out-of-pocket. This type of low-value care can lead to direct harm to patients — physically or financially or both — as well as cascading iatrogenic harm, which can amplify the total cost of just one low-value service by up to 10 fold. Health care leaders, through the Smarter Health Care Coalition, have hence called on the Department of Health and Human Services Secretary Azar to halt Medicare payments for services deemed low-value or harmful by the USPSTF.
As offices and hospitals reopen with unprecedented clinical unmet needs, we have a unique opportunity to rebuild a flawed system. Payment policies should drive incentives to improve individual and population health, not the volume of services delivered. We emphasize that no given service is inherently high- or low-value, but that it depends heavily on the individual context. Thus, the implementation of new financial incentives for providers and patients needs to be nuanced and flexible to allow for patient-level variability. The added expenditures required for higher reimbursement rates for highly valuable services can be fully paid for by reducing the use of and reimbursement for low-value services.
The delivery of evidence-based care should be the foundation of the new normal. We all agree that there is more than enough money in U.S. health care; it’s time that we start spending it on services that will make us a healthier nation.
Healthcare is Hard: A Podcast for Insiders; June 11, 2020
Over the course of nearly 20 years as Chief Research Officer at The Advisory Board Company, Chas Roades became a trusted advisor for CEOs, leadership teams and boards of directors at health systems across the country. When The Advisory Board was acquired by Optum in 2017, Chas left the company with Chief Medical Officer, Lisa Bielamowicz. Together they founded Gist Healthcare, where they play a similar role, but take an even deeper and more focused look at the issues health systems are facing.
As Chas explains, Gist Healthcare has members from Allentown, Pennsylvania to Beverly Hills, California and everywhere in between. Most of the organizations Gist works with are regional health systems in the $2 to $5 billion range, where Chas and his colleagues become adjunct members of the executive team and board. In this role, Chas is typically hopscotching the country for in-person meetings and strategy sessions, but Covid-19 has brought many changes.
“Almost overnight, Chas went from in-depth sessions about long-term five-year strategy, to discussions about how health systems will make it through the next six weeks and after that, adapt to the new normal. He spoke to Keith Figlioli about many of the issues impacting these discussions including:
- Corporate Governance. The decisions health systems will be forced to make over the next two to five years are staggeringly big, according to Chas. As a result, Gist is spending a lot of time thinking about governance right now and how to help health systems supercharge governance processes to lay a foundation for the making these difficult choices.
- Health Systems Acting Like Systems. As health systems struggle to maintain revenue and margins, they’ll be forced to streamline operations in a way that finally takes advantage of system value. As providers consolidated in recent years, they successfully met the goal of gaining size and negotiating leverage, but paid much less attention to the harder part – controlling cost and creating value. That’s about to change. It will be a lasting impact of Covid-19, and an opportunity for innovators.
- The Telehealth Land Grab. Providers have quickly ramped-up telehealth services as a necessity to survive during lockdowns. But as telehealth plays a larger role in the new standard of care, payers will not sit idly by and are preparing to double-down on their own virtual care capabilities. They’re looking to take over the virtual space and own the digital front door in an effort to gain coveted customer loyalty. Chas talks about how it would be foolish for providers to expect that payers will continue reimburse at high rates or at parity for physical visits.
- The Battleground Over Physicians. This is the other area to watch as payers and providers clash over the hearts and minds of consumers. The years-long trend of physician practices being acquired and rolled-up into larger organizations will significantly accelerate due to Covid-19. The financial pain the pandemic has caused will force some practices out of business and many others looking for an exit. And as health systems deal with their own financial hardships, payers with deep pockets are the more likely suitor.”
The inequalities in American health care extend right into the hospital: Cash-strapped safety-net hospitals treat more people of color, while wealthier facilities treat more white patients.
Why it matters: Safety-net hospitals lack the money, equipment and other resources of their more affluent counterparts, which makes providing critical care more difficult and exacerbates disparities in health outcomes.
The big picture: A majority of patients who go to safety-net hospitals are black or Hispanic; 40% are either on Medicaid or uninsured.
The other side: Wealthy hospitals, including many prominent academic medical centers, are “far less likely to serve or treat black and low-income patients even though those patients may live in their backyards,” said Arrianna Planey, an incoming health policy professor at the University of North Carolina.
- An investigation by the Boston Globe in 2017 found black people in Boston “are less likely to get care at several of the city’s elite hospitals than if you are white.”
- The Cleveland Clinic has expanded into a global icon for health care, but rarely cares for those in the black neighborhoods that surround its campus, Dan Diamond of Politico reported in 2017.
Between the lines: The way the federal government is bailing out hospitals for the revenues they’ve lost during coronavirus is exacerbating this inequality. More money is flowing to richer hospitals.
- For example, the main hospital within University of Colorado Health has gotten $79.3 million from the government’s main “provider relief” fund — about the same amount as Cook County Health, Chicago’s public hospital system, which predominantly treats low-income black and Hispanic people. It has gotten $77.6 million from that pot.
- The Colorado system, however, is sitting on billions of dollars in cash and investments that Chicago’s safety-net hospitals don’t have. Chicago has also seen a worse coronavirus outbreak.
The bottom line: Poor hospitals that treat minorities have had to rely on GoFundMe pages and beg for ventilators during the pandemic, while richer systems move ahead with new hospital construction plans.
Nurses at 15 HCA hospitals represented by National Nurses United protested last week, saying the for-profit hospital chain threatened layoffs. Nurses took to the sidewalks outside of their hospitals with signs, after they said they were told to expect cuts to benefits and staff if they didn’t give up negotiated wage increases.
In an emailed statement, HCA said it had no plans for layoffs.
A letter obtained by MedCity News threatened the possibility of reductions if the nurses did not accept HCA’s proposal.
The letter stated:
“The facts are that non-represented colleagues across the HCA Healthcare enterprise are taking pay reductions and non-represented colleagues are giving up wage increases this year. HCA Healthcare has made these tough decisions in order to preserve jobs. To be equitable to all of our colleagues across the enterprise, we recently reached out to unions, with the hope that during this time of crisis, they would support the same measures for our unionized employees to minimize the impact on your compensation and employment status. … If the (National Nurses Organizing Committee) and/or (Service Employees International Union) reject our proposal, colleagues represented by these unions will no longer be eligible for continued pandemic pay, may be subject to layoffs and may face other benefit changes.”
Nurses interviewed by MedCity News said they were asked to give up other benefits.
Zoe Schmidt, a registered nurse who works at Research Medical Center in Kansas City, said they were also asked to forego their 401(k) matching for the year and shift differential pay, or increased compensation for nurses that work night and weekend shifts.
Seattle Children’s Hospital has filed a lawsuit to block the release of health department records regarding mold at its facility, according to court documents cited by King 5.
The hospital’s legal team filed an amended complaint in an attempt to block the release of state and county health records.
Documents previously released to the media through a public records request revealed a nearly 20-year history of Aspergillus mold in the air handling system of the hospital’s operating rooms.
The health records sought by the media are “confidential and sensitive,” Adrian Urquhart Winder, attorney for Seattle Children’s, said, according to King 5. The attorney cited a state law that says records produced for quality improvement purposes cannot be publicly disclosed.
On Jan. 10, Mark Del Beccaro, MD, former CMO and senior vice president of Seattle Children’s Hospital, resigned, according to a hospital spokesperson. King 5 could not reach Dr. Del Beccaro for comment.
- Hospital consolidation is associated with poorer patient experiences and doesn’t improve care, according to a study published Thursday in the New England Journal of Medicine, refuting a common provider justification for rampant mergers and acquisitions.
- The study funded by HHS’ health quality research division, the Agency for Healthcare Research and Quality, found that acquired hospitals saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates. Acquired hospitals did improve slightly in clinical process, though that can’t be directly chalked up to the results of an acquisition, researchers found.
- It’s further evidence that bigger isn’t always better when it comes to hospitals, and adds onto a heap of previous studies showing provider mergers lead to higher prices for commercially insured patients.
Hospitals continue to turn to M&A to navigate tricky industry headwinds, including lowering reimbursement and flatlining admissions as patients increasingly turn to alternate, cheaper sites of care. Provider trade associations maintain consolidation lowers costs and improves operations, which trickles down to better care for patients.
Though volume of deals has ebbed and flowed, hospital M&A overall has steadily increased over the past decade. The hospital sector in 2018 saw 90 deals, according to consultancy Kaufman Hall, up 80% from just 50 such transactions in 2009.
Thursday’s study analyzed CMS data on hospital quality and Medicare claims from 2007 through 2016 and data on hospital M&A from 2009 to 2013 to look at hospital performance before and after acquisition, compared with a control group that didn’t see a change in ownership.
American Hospital Association General Counsel Melinda Hatton took aim at the study’s methods to refute its findings, especially its reliance on a common measure of patient experience called HCAHPS.
“Using data collected from patients to make claims about quality fails to recognize that it is often incomplete, as patients are not required to and do not always respond comprehensively,” Hatton told Healthcare Dive in a statement. “The survey does not capture information on the critical aspects of care as it is delivered today.”
The results contradict a widely decried AHA-funded study last year conducted by Charles River Associates that found consolidation improves quality and lowers revenue per admission in the first year prior to integration. The research came quickly under fire by academics and patient advocates over potential cherrypicked results.
A spate of previous studies found hospital tie-ups raise the price tag of care on payers and patients. Congressional advisory group MedPAC found both vertical and horizontal provider consolidation are correlated with higher healthcare costs, the brunt of which is often borne by consumers in the form of higher premiums and out-of-pocket costs.
A 2018 study published in the Quarterly Journal of Economics found prices rose 6% after hospitals were acquired, partially due to limiting market competition. Groups like the left-leaning Center for American Progress have called for increased scrutiny from antitrust regulators as a result, but — despite snowballing M&A — there’s been little change in antitrust regulation since the 1980s. The Federal Trade Commission won several challenges to hospital consolidation in the 2010s, but the agency only contests 2% to 3% of mergers annually, according to MedPAC analysts.
Providers, like most actors across the healthcare ecosystem, are increasingly under fire for high prices and predatory billing practices. President Donald Trump’s administration finalized a rule late last year that would force hospitals to reveal secret negotiated rates with insurers, relying on the assumption that transparency would shame both actors into lowering prices.
A cadre of provider groups led by the AHA sued HHS over the regulation, arguing it violates the First Amendment and would place undue burden on hospitals, while potentially stifling competition. The lawsuit is currently being reviewed by the U.S. District Court for the District of Columbia.
- Both vertical and horizontal hospital consolidation is correlated with higher healthcare costs, according to a congressional advisory committee on Medicare, in yet another study finding rampant mergers and acquisitions drive up prices for consumers.
- The Medicare Payment Advisory Commission found providers with greater market share see higher commercial profit margins, leading to higher costs per discharge, though the direct relationship between market share and cost per discharge was not statistically meaningful itself.
- MedPAC also found vertical integration between health systems and physician practices increases prices and spending for consumers. The top-down consolidation leads to higher prices for commercial payers and Medicare alike, as hospitals have more bargaining heft and benefit from Medicare’s payment hikes for hospital outpatient departments.
Hospital consolidation has become a major point of concern for policymakers, antitrust regulators and patient advocacy groups. A slew of prior studies have found unchecked provider M&A contributes to higher healthcare costs, with the brunt often borne by consumers in the form of higher premiums and out-of-pocket costs.
Since 2003, the number of “super-concentrated” markets has increased from 47% to 57%, according to the MedPAC analysis of CMS and American Hospital Association data. Those markets, with a high amount of consolidation, rarely see new providers enter, which stifles competition, and are rarely reviewed by the government.
There’s been little change in antitrust regulation since the 1980s and, though the Federal Trade Commission has won several challenges to hospital consolidation in the 2010s, the agency only challenges 2% to 3% of mergers annually.
MedPAC also found super-concentrated insurance markets actually led to lower costs per discharge compared to lower levels of payer concentration, deflating somewhat hospital lobbies’ arguments that payer consolidation is driving prices higher.
Committee members called for more analysis of how macro trends like an aging population and federal policy could be driving consolidation and impacting prices, leading some to call for a revamp of the hospital payment framework itself.
“We have to change the way hospitals are paid. I don’t see another solution,” said Brian DeBusk, CEO of Tennesse-based DeRoyal Industries, a medical manufacturer. “Are you going to undo a thousand hospital mergers? Are you going to enact rate setting? I don’t see another way.”
MedPAC also looked at vertical integration, where hospitals snap up physicians practices downstream. According to the Physician Advocacy Institute, only 26% of physician practices were owned by hospitals in 2012, but by last year that number had spiked to 44%.
Since 2012, billing has shifted from physician offices to hospital outpatient departments, especially in specialty practices. In chemotherapy administration, for example, physician offices saw almost 17% less volume between 2012 and 2018, while outpatient centers saw a 53% increase in volume, according to MedPAC.
Physicians in hospital-owned practices also refer more patients to the hospital’s facilities and, despite a common stumping point that integration improves quality through care coordination, its effect on quality is “ambiguous,” MedPAC analyst Dan Zabinski said Thursday at the committee’s November meeting.
Despite the mountain of evidence, the AHA published a widely-decried study in September claiming acquired hospitals see a reduction in operating expenses and a statistically significant drop in readmission and mortality rates. The study was criticized for not using actual claims data in its analysis among other methodological and conflict of interest concerns.
Republican leaders in the House Energy and Commerce Committee asked MedPAC to study provider consolidation in August, and the body’s full findings will be included in its March report to Congress.