Appeals court upholds nearly 30% payment cut to 340B hospitals

https://www.fiercehealthcare.com/hospitals/appeals-court-upholds-nearly-30-payment-cut-to-340b-hospitals?mkt_tok=eyJpIjoiWkRReFlqRmpaamRtWVdabSIsInQiOiJFTEp3SjQ3NG01NXcwRTg3Z0hCZkdTRlwvOURSeEVlblwvRlFUWlZcL09ONjZGNVEybzl3ekl3VFd2ZEgxSjY2NGQ0TkFIRFdtQ0ZDWUx0ak96NU15d09qMWcrdm9BMFUxOSszcVI0T21rak5raEN0aE5Kb0VUUGFcL254QnBjMjdCbzkifQ%3D%3D&mrkid=959610

In court filing, AHA says HHS should make 340B hospitals 'whole ...

A federal appeals court has ruled the Trump administration can install nearly 30% cuts to the 340B drug discount program.

The ruling Friday is the latest legal setback for hospitals that have been vociferously fighting cuts the Department of Health and Human Services (HHS) announced back in 2017.

340B requires pharmaceutical manufacturers to deliver discounts to safety net hospitals in exchange for participation in Medicaid. A hospital will pay typically between 20% and 50% below the average sales price for the covered drugs.

HHS sought to address a payment gap between 340B and Medicare Part B, which reimburses providers for drugs administered in a physician’s office such as chemotherapy. There was a 25% and 55% gap between the price for a 340B drug and on Medicare Part B.

So HHS administered a 28.5% cut in the 2018 hospital payment rule. The agency also included the cuts in the 2019 payment rule.

Three hospital groups sued to stop the cut, arguing that HHS exceeded its federal authority to adjust the rates to the program.

A lower court agreed with the hospitals and called for the agency to come up with a remedy for the cuts that already went into effect.

But HHS argued that when it sets 340B payment amounts, it has the authority to adjust the amounts to ensure they don’t reimburse hospitals at higher levels than the actual costs to acquire the drugs.

If the hospital acquisition cost data are not available, HHS could determine the amount of payment equal to the average drug price. HHS argued that hospital cost acquisition data was not available and so HHS needed to determine the payment rates based on the average drug price.

The court agreed with the agency’s interpretation.

“At a minimum, the statute does not clearly preclude HHS from adjusting the [340B] rate in a focused manner to address problems with reimbursement rates applicable only to certain types of hospitals,” the ruling said.

The court added that the $1.6 billion gleaned from the cuts would go to all providers as additional reimbursements for other services.

340B groups were disappointed with the decision.

“These cuts of nearly 30% have caused real and lasting pain to safety-net hospitals and the patients they serve,” said Maureen Testoni, president and CEO of advocacy group 340B Health, which represents more than 1,400 hospitals that participate in the program. “Keeping these cuts in place will only deepen the damage of forced cutbacks in patient services and cancellations of planned care expansions.”

This is the latest legal defeat for the hospital industry. A few weeks ago, the same appeals court ruled that HHS had the legal authority to institute cuts to off-campus clinics to bring Medicare payments in line with physician offices, reversing a lower court’s ruling.

The groups behind the lawsuit — American Hospital Association, American Association of Medical Colleges and America’s Essential Hospitals — slammed the decision as hurtful to hospitals fighting the COVID-19 pandemic. But the groups didn’t say if it would appeal the decision.

“Hospitals that rely on the savings from the 340B drug pricing program are also on the front-lines of the COVID-19 pandemic, and today’s decision will result in the continued loss of resources at the worst possible time,” the groups said in a statement Friday.

 

 

 

Hospitals lose legal challenge to 340B drug payment cut

https://www.healthcaredive.com/news/hospitals-lose-legal-challenge-to-340b-drug-payment-cut/582717/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Healthcare%20Dive:%20Daily%20Dive%2008-01-2020&utm_term=Healthcare%20Dive%20Weekender

340B Program: Important, but Weaknesses Cited - Pharmacy Practice News

Dive Brief:

  • A significant rate cut for some medications for 340B hospitals was based on a “reasonable interpretation of the Medicare statute” and can stand, the U.S. Court of Appeals for the District of Columbia ruled Friday.
  • The 2-1 ruling overturns a district court decision that HHS overstepped its bounds when it cut the reimbursement rate for a certain category of outpatient drugs by 28.5% for hospitals enrolled in the 340B drug discount program.
  • The American Hospital Association, which challenged the rate cut along with three individual hospitals, did not immediately respond to a request for comment. An advocacy group for 340B hospitals said in a statement it was disappointed in the ruling and that the rate change has “caused real and lasting pain to safety-net hospitals and the patients they serve.”

Dive Insight:

The decision is another major blow for hospitals, coming two weeks after the same court ruled HHS also acted within its authority when it reduced payments to off-campus hospital outpatient departments.

AHA said this week it is seeking to have that ruling overturned.

HHS made the cut to 340B hospital outpatient drug reimbursement in the 2018 Outpatient Prospective Payment System rule, arguing that those hospitals, which primarily serve low-income populations, get the drugs at a deep discount and thus could be incentivized to overuse them.

The cut was from 106% of the average sales price to 22.5% less than ASP. Hospitals immediately sued, but HHS retained the reduction in the 2019 OPPS. The department has said the change would save Medicare $1.6 billion in 2018.

Writing for the court, Chief Judge Sri Srinivasan said the department did indeed have the authority to make the reduction, “so as to avoid reimbursing those hospitals at much higher levels than their actual costs to acquire the drugs.”

He also called the cut “a fair, or even conservative, measure of the reduction needed to bring payments to those hospitals into parity with their costs to obtain the drugs.”

In a partially dissenting opinion, Circuit Judge Cornelia Pillard wrote that she believes the statute only allows HHS to make the change for a specific group of hospitals under a clause that requires the agency to use a certain data set it did not use.

 

 

 

 

Pandemic spurs national union activity among hospital workers

https://www.healthcaredive.com/news/coronavirus-spurs-healthcare-union-activity/581397/

Pandemic spurs national union activity among hospital workers ...

When COVID-19 cases swelled in New York and other northern states this spring, Erik Andrews, a rapid response nurse at Riverside Community Hospital in southern California, thought his hospital should have enough time to prepare for the worst.

Instead, he said his hospital faced staffing cuts and a lack of adequate personal protective equipment that led around 600 of its nurses to strike for 10 days starting in late June, just before negotiating a new contract with the hospital and its owner, Nashville-based HCA Healthcare.

“To feel like you were just put out there on the front lines with as minimal support necessary was incredibly disheartening,” Andrews said. Two employees at RCH have died from COVID-19, according to SEIU Local 121RN, the union representing them.

A spokesperson for HCA told Healthcare Dive the “strike has very little to do with the best interest of their members and everything to do with contract negotiations.”

Across the country, the pandemic is exacerbating labor tensions with nurses and other healthcare workers, leading to a string of disputes around what health systems are doing to keep front-line staff safe. The workers’ main concerns are adequate staffing and PPE. Ongoing or upcoming contract negotiations could boost their leverage.

But many of the systems that employ these workers are themselves stressed in a number of ways, above all financially, after months of delayed elective procedures and depleted volumes. Many have instituted furloughs and layoffs or other workforce reduction measures.

Striking a balance between doing union action at hospitals and continuing care for patients could be an ongoing challenge, Patricia Campos-Medina, co-director of New York State AFL-CIO/Cornell Union Leadership Institute.

“The nurses association has been very active since the beginning of the crisis, demanding PPE and doing internal activities in their hospitals demanding proper procedures,” Campos-Medina said. “They are front-line workers, so they have to be thoughtful in how they continue to provide care but also protect themselves and their patients.”

At Prime Healthcare’s Encino Hospital Medical Center, just outside Los Angeles, medical staff voted to unionize July 5, a week after the hospital laid off about half of its staff, including its entire clinical lab team, according to SEIU Local 121RN, which now represents those workers.

One of the first things the newly formed union will fight is “the unjust layoffs of their colleagues,” it said in a statement.

A Prime Healthcare spokesperson told Healthcare Dive 25 positions were cut. “These Encino positions were not part of front-line care and involved departments such as HR, food services, and lab services,” the system said.

Hospital service workers elsewhere who already have bargaining rights are also bringing attention to what they deem as staffing and safety issues.

In Chicago, workers at Loretto Hospital voted to authorize a strike Thursday. Those workers include patient care technicians, emergency room technicians, mental health staff and dietary and housekeeping staff, according to SEIU Healthcare Illinois, the union that represents them. They’ve been bargaining with hospital management for a new contract since December and plan to go on strike July 20.

Loretto Hospital is a safety-net facility, catering primarily to “Black and Brown West Side communities plagued with disproportionate numbers of COVID illnesses and deaths in recent months,” the union said.

The “Strike For Black Lives” is in response to “management’s failure to bargain in good faith on critical issues impacting the safety and well-being of both workers and patients — including poverty level wages and short staffing,” according to the union.

A Loretto spokesperson told Healthcare Dive the system is hopeful that continuing negotiations will bring an agreement, though it’s “planning as if a strike is eminent and considering the best options to continue to provide healthcare services to our community.”

Meanwhile in Joliet, Illinois, more than 700 nurses at Amita St. Joseph Medical Center went on strike July 4.

The Illinois Nurses Association which represents Amita nurses, cited ongoing concerns about staff and patient safety during the pandemic, namely adequate PPE, nurse-to-patient ratios and sick pay, they want addressed in the next contract. They are currently bargaining for a new one, and said negotiations stalled. The duration of the strike is still unclear.

However, a hospital spokesperson told Healthcare Dive, “Negotiations have been ongoing with proposals and counter proposals exchanged.”

The hospital’s most recent proposal “was not accepted, but negotiations will continue,” the system said.

INA is also upset with Amita’s recruitment of out-of-state nurses to replace striking ones during the COVID-19 pandemic.

It sent a letter to the Illinois Department of Financial and Professional Regulation, asserting the hospital used “emergency permits that are intended only for responding to the pandemic for purposes of aiding the hospital in a labor dispute.”

 

 

 

 

750 Million Struggling to Meet Basic Needs With No Safety Net

https://news.gallup.com/poll/312401/750-million-struggling-meet-basic-needs-no-safety-net.aspx?utm_source=newsbrief-newsletter&utm_medium=email&utm_campaign=NewsBriefNewsletter-NewsAlerts_June_06232020&utm_content=readarticle-textlink-6&elqTrackId=4006f0c4b7d144559ddd21458f847dda&elq=855f025f02c444dcb59fe9492ea16815&elqaid=4326&elqat=1&elqCampaignId=925

750 Million Struggling to Meet Basic Needs With No Safety Net

STORY HIGHLIGHTS

  • One in seven adults worldwide struggle to afford food, shelter with no help
  • At least some percentage in every country is “highly vulnerable”
  • Highly vulnerable in developed, developing world as likely to have health problems

This article is the first in series based on results from Gallup’s new Basic Needs Vulnerability Index.

Imagine being unable to afford food or to put a roof over your head, or maybe you are struggling to do both. On top of this, you don’t have family or friends who can help you.

Now, imagine this is all happening and a pandemic hits.

Gallup’s new Basic Needs Vulnerability Index, based on surveys in 142 countries in 2019, suggests this was the reality for hundreds of millions worldwide just as COVID-19 arrived.

About one in seven of the world’s adults — or about 750 million people — fall into this index’s “High Vulnerability” group, which means they are struggling to afford either food or shelter, or struggling to afford both, and don’t have friends or family to count on if they were in trouble.

Globally, at least some adults in every country fall into the High Vulnerability group, which is important because Gallup finds people in this group are potentially more at risk in almost every area of their lives. Worldwide, these percentages range from 1% in wealthy countries such as Denmark and Singapore to roughly 50% in places such as Benin and Afghanistan.

20200602_vulnerability@2x

Gallup’s Basic Needs Vulnerability Index gauges people’s potential exposure to risk from economic and other types of shocks like a pandemic. Beyond measuring people’s ability to afford food and shelter, this index also folds in whether people have personal safety nets — people who can help them when they are in trouble.

People worldwide fall into one of three groups:

High Vulnerability: People in this group say there were times in the past year when they were unable to afford food or shelter or say they struggled to afford both and say they do not have family or friends who could help them in times of trouble.

Moderate Vulnerability: People in this group say there were times in the past year when they were unable to afford food or shelter or say they struggled to afford both, and they do have family or friends to help them in times of trouble.

Low Vulnerability: People in this group say there were not times in the past year when they struggled to afford food or shelter and say they do have family or friends to help them if they were in trouble.

Before the pandemic, most of the world was at least moderately vulnerable, falling into either the High Vulnerability group (14%) or the Moderate Vulnerability group (39%). The rest, 47%, fell into the Low Vulnerability group.

The life experiences in these three groups illustrate the difference that not having family and friends to count on in times of trouble can make in people’s lives.

Highly Vulnerable Most Likely to Experience Health Problems, Experience Pain

While people in the High Vulnerability group are potentially more at risk in almost every area of their lives than those in the other two groups, they are particularly at risk when it comes to their health.

More than four in 10 (41%) of the highly vulnerable say they have health problems that keep them from doing activities that people their age normally do. This percentage drops to 29% among those who are moderately vulnerable and to 14% among those with low vulnerability.

The same is true for experiences of physical pain. The highly vulnerable are also far more likely to say they experienced physical pain the day before the interview (53% have) compared with 37% in the moderately vulnerable and 20% in the lowest vulnerability group.

Looking at who the highly vulnerable are within the global population reinforces why the greater risks to their health are so important. Globally, people in the high vulnerability group are just as likely to be male or female (14% of each fall into this group), and percentages are similar in the 15 to 29 age group (12%) and 60 and older group (14%).

However, the highly vulnerable are more likely to live in rural (16%) rather than urban areas (10%) and be in the poorest 20% of the population (21%) than the richest 20% of the population (7%).

Highly Vulnerable in Developed and Developing Countries Poor Health in Common

As might be expected, most of the countries with the highest percentage in the High Vulnerability group are a mix of developing economies and notably one emerging economy — India — and the countries with the lowest percentage are developed, high-income economies.

However, regardless of where they are located or their level of development, the highly vulnerable populations look a lot alike. In fact, when it comes to health problems, among the highly vulnerable populations, almost the exact same percentage in developing economies (41%) and high-income economies (42%) report having them.

The highly vulnerable in developing countries are only slightly more likely to report experiencing physical pain (53%) than this group in developed, high-income economies (47%).

Implications

As massive as the highly vulnerable group was before the pandemic, it could have been even larger, taking children and other household members into account.

As such, this new layer of vulnerability among populations will be important to monitor as the pandemic threatens to push tens of millions more people into extreme poverty and hunger this year and beyond.

 

 

 

 

State-by-state breakdown of 130 rural hospital closures

https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-130-rural-hospital-closures.html

Rural Hospital Closures Hit Poor, Minority Communities Hardest ...

Nearly one in five Americans live in rural areas and depend on their local hospital for care. Over the past 10 years, 130 of those hospitals have closed.

Thirty-three states have seen at least one rural hospital shut down since 2010, and the closures are heavily clustered in states that have not expanded Medicaid under the ACA, according to the Cecil G. Sheps Center for Health Services Research.

Twenty-one rural hospitals in Texas have closed since 2010, the most of any state. Tennessee has the second-most closures, with 13 rural hospitals shutting down in the past decade. In third place is Oklahoma with eight closures. 

Listed below are the 130 rural hospitals that have closed since Jan. 1, 2010, as tracked by the Sheps Center. For the purposes of its analysis, the Sheps Center defined a hospital closure as the cessation in the provision of inpatient services.

“We follow the convention of the Office of Inspector General that a closed hospital is ‘a facility that stopped providing general, short-term, acute inpatient care,'” reads a statement on the Sheps Center’s website. “We did not consider a hospital closed if it: merged with, or was sold to, another hospital but the physical plant continued to provide inpatient acute care, converted to critical access status, or both closed and reopened during the same calendar year and at the same physical location.”

As of June 8, all the facilities listed below had stopped providing inpatient care. However, some of them still offered other services, including outpatient care, emergency care, urgent care or primary care.

Alabama
SouthWest Alabama Medical Center (Thomasville)
Randolph Medical Center (Roanoke)
Chilton Medical Center (Clanton)
Florence Memorial Hospital
Elba General Hospital
Georgiana Medical Center

Alaska
Sitka Community Hospital

Arizona
Cochise Regional Hospital (Douglas)
Hualapai Mountain Medical Center (Kingman)
Florence Community Healthcare

Arkansas
De Queen Medical Center

California
Kingsburg Medical Center
Corcoran District Hospital
Adventist Health Feather River (Paradise)
Coalinga Regional Medical Center

Florida
Campbellton-Graceville Hospital
Regional General Hospital (Williston)
Shands Live Oak Regional Medical Center
Shands Starke Regional Medical Center

Georgia
Hart County Hospital (Harwell)
Charlton Memorial Hospital (Folkston)
Calhoun Memorial Hospital (Arlington)
Stewart-Webster Hospital (Richland)
Lower Oconee Community Hospital (Glenwood)
North Georgia Medical Center (Ellijay)

Illinois
St. Mary’s Hospital (Streator)

Indiana
Fayette Regional Health System

Kansas
Central Kansas Medical Center (Great Bend)
Mercy Hospital Independence
Mercy Hospital Fort Scott
Horton Community Hospital
Oswego Community Hospital
Sumner Community Hospital (Wellington)

Kentucky
Nicholas County Hospital (Carlisle)
Parkway Regional Hospital (Fulton)
New Horizons Medical Center (Owenton)
Westlake Regional Hospital (Columbia)

Louisiana
Doctor’s Hospital at Deer Creek (Leesville)

Maine
St. Andrews Hospital (Boothbay Harbor)
Southern Maine Health Care-Sanford Medical Center
Parkview Adventist Medical Center (Brunswick)

Maryland
Edward W. McCready Memorial Hospital (Crisfield)

Massachusetts
North Adams Regional Hospital

Michigan
Cheboygan Memorial Hospital

Minnesota
Lakeside Medical Center
Albany Area Hospital
Albert Lea-Mayo Clinic Health System
Mayo Clinic Health System-Springfield

Mississippi
Patient’s Choice Medical of Humphreys County (Belzoni)
Pioneer Community Hospital of Newton
Merit Health Natchez-Community Campus
Kilmichael Hospital
Quitman County Hospital (Marks)

Missouri
Sac-Osage Hospital (Osceola)
Parkland Health Center-Weber Road (Farmington)
Southeast Health Center of Reynolds County (Ellington)
Southeast Health Center of Ripley County (Doniphan)
Twin Rivers Regional Medical Center (Kennett)
I-70 Community Hospital (Sweet Springs)
Pinnacle Regional Hospital (Boonville)

Nebraska
Tilden Community Hospital

Nevada
Nye Regional Medical Center (Tonopah)

New York
Lake Shore Health Care Center
Moses-Ludington Hospital (Ticonderoga)

North Carolina
Blowing Rock Hospital
Vidant Pungo Hospital (Belhaven)
Novant Health Franklin Medical Center (Louisburg)
Yadkin Valley Community Hospital (Yadkinville)
Our Community Hospital (Scotland Neck)
Sandhills Regional Medical Center (Hamlet)
Davie Medical Center-Mocksville

Ohio
Physicians Choice Hospital-Fremont
Doctors Hospital of Nelsonville

Oklahoma
Muskogee Community Hospital
Epic Medical Center (Eufaula)
Memorial Hospital & Physician Group (Frederick)
Latimer County General Hospital (Wilburton)
Pauls Valley General Hospital
Sayre Community Hospital
Haskell County Community Hospital (Stigler)
Mercy Hospital El Reno

Pennsylvania
Saint Catherine Medical Center Fountain Springs (Ashland)
Mid-Valley Hospital (Peckville)
Ellwood City Medical Center
UPMC Susquehanna Sunbury

South Carolina
Bamberg County Memorial Hospital
Marlboro Park Hospital (Bennettsville)
Southern Palmetto Hospital (Barnwell)
Fairfield Memorial Hospital (Winnsboro)

South Dakota
Holy Infant Hospital (Hoven)

Tennessee
Riverview Regional Medical Center South (Carthage)
Starr Regional Medical Center-Etowah
Haywood Park Community Hospital (Brownsville)
Gibson General Hospital (Trenton)
Humboldt General Hospital
United Regional Medical Center (Manchester)
Parkridge West Hospital (Jasper)
Tennova Healthcare-McNairy Regional (Selmer)
Copper Basin Medical Center (Copperhill)
McKenzie Regional Hospital
Jamestown Regional Medical Center
Takoma Regional Hospital (Greeneville)
Decatur County General Hospital (Parsons)

Texas
Wise Regional Health System-Bridgeport
Shelby Regional Medical Center
Renaissance Hospital Terrell
East Texas Medical Center-Mount Vernon
East Texas Medical Center-Clarksville
East Texas Medical Center-Gilmer
Good Shepherd Medical Center (Linden)
Lake Whitney Medical Center (Whitney)
Hunt Regional Community Hospital of Commerce
Gulf Coast Medical Center (Wharton)
Nix Community General Hospital (Dilley)
Weimar Medical Center
Care Regional Medical Center (Aransas Pass)
East Texas Medical Center-Trinity
Little River Healthcare Cameron Hospital
Little River Healthcare Rockdale Hospital
Stamford Memorial Hospital
Texas General-Van Zandt Regional Medical Center (Grand Saline)
Hamlin Memorial Hospital
Chillicothe Hospital
Central Hospital of Bowie

Virginia
Lee Regional Medical Center (Pennington Gap)
Pioneer Community Hospital of Patrick County (Stuart)
Mountain View Regional Hospital (Norton)

West Virginia
Williamson Memorial Hospital
Fairmont Regional Medical Center

Wisconsin
Franciscan Skemp Medical Center (Arcadia)

 

 

 

 

“All policy is health policy”

https://www.axios.com/newsletters/axios-vitals-8873028c-f37e-4712-a53a-ae324c56dbb6.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

PPT - Health in All Policies PowerPoint Presentation, free ...

The effects of racism are often inseparable from black Americans’ health and well-being, as “black communities bear the physical burdens of centuries of injustice, toxic exposures, racism, and white supremacist violence,” Rachel Hardeman, Eduardo Medina and Rhea Boyd write in the New England Journal of Medicine:

Any solution to racial health inequities must be rooted in the material conditions in which those inequities thrive. Therefore, we must insist that for the health of the black community and, in turn, the health of the nation, we address the social, economic, political, legal, educational, and health care systems that maintain structural racism. Because as the Covid-19 pandemic so expeditiously illustrated, all policy is health policy…

The response to the pandemic has made at least one thing clear: systemic change can in fact happen overnight.

 

Rich vs. poor hospitals

https://www.axios.com/hospitals-coronavirus-inequality-segregation-f10c49eb-5ccc-4739-b2a9-254fd9a3d40e.html

Rich vs. poor hospitals | News Break

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.

 

 

 

 

After criticism, HHS directs $25B in CARES funding to Medicaid providers, safety net hospitals

https://www.healthcaredive.com/news/after-criticism-hhs-directs-25b-in-cares-funding-to-medicaid-providers-s/579496/

Dive Brief:

  • HHS announced Tuesday it will deliver $25 billion to providers and hospitals that serve the nation’s most vulnerable patients, or those with Medicaid and Children’s Health Insurance Program coverage. Of that, $15 billion will go to providers that primarily serve Medicaid and CHIP patients while the other $10 billion is reserved for safety net hospitals that usually operate on razor-thin margins. A total of 758 safety net hospitals will receive direct deposits, and the administration noted that many of these facilities are operating in the red with an average profit margin of -7%.
  • Not all Medicaid providers received Coronavirus Aid, Relief, and Economic Security funding from the initial general distribution. This targeted allocation is designed to make up for that by distributing money to the remaining 38% of Medicaid and CHIP providers who were left out of the first tranche.
  • These Medicaid providers will receive at least 2% of reported gross patient revenue, but could receive more depending on how many patients they serve. HHS will make a final determination once providers start submitting data to the relief portal.

Dive Insight:

The industry has been clamoring for HHS to target funding to Medicaid providers amid the COVID-19 pandemic and the downturn in business, noting these organizations are already on fragile ground.

Last week the American Hospital Association pleaded for the administration to release $50 billion more for all hospitals, with $10 billion reserved for providers with a heavy caseload of Medicaid patients.

HHS answered the hospital lobby’s call — in part. HHS will distribute funds to safety net providers — more than AHA asked for — but disclosed no plans Tuesday to broaden that funding to all hospitals. America’s Essential Hospitals, which represents safety net providers, had also called for the quick release of targeted funding.

“Our goal for all these distributions has been to get the money to the providers who need it most as soon as possible,” Eric Hargan, HHS deputy secretary, said Tuesday during a call with reporters.

However, some have been critical of how the administration decided to allocate the first few waves of funding.

Congress has earmarked a total of $175 billion in funding for providers through two pieces of legislation, including the CARES Act.

To get the money out the door quickly, the first tranche was sent to providers based on the Medicare fee-for-service business, and later on the net patient service revenue.

These formulas put certain providers at an advantage, which tend to be for-profit hospitals with higher-margins, or those who were already well off heading into the pandemic, according to a recent Kaiser Family Foundation analysis.

This targeted funding was not swift, one reason for the delay was the challenge in getting a list of Medicaid providers from the states to validate and authenticate those who came to the portal to apply for funds, according to a senior HHS official.​

Still, providers that have already received funds have noted that it comes with its own set of headaches. Some have decided to return the funds as navigating the legal and compliance issues may not be worth the hassle.

Though, that’s likely not the case for these safety net hospitals and providers.

 

 

 

 

Administration Wants To Cut Back A Billion-Dollar Healthcare Program. Hospitals Say Now Is A Really Bad Time.

https://www.buzzfeednews.com/article/zoetillman/trump-medicare-cuts-hospitals-coronavirus-lawsuits?mkt_tok=eyJpIjoiTVRRd00yUmpZbUV3TVRVeiIsInQiOiJTZ0piR2wyRnBZOU5jR3N2TTNzd3Vrb040dHA5K0hVT0lQRm82YnFkVlNVVko4QlVRU0Z0SVVTQWxZUXJmWTZFTVBqaVh0N1JRWHFJTmg2dkNDb0hQTjBYYmxyUnphMEVGSmhwN0NJWUE3V0FFa2FIenJRZTJjWmliSWZKRVwvcU8ifQ%253D%253D

340B Drug Pricing Program: What Is it, How Does It Work?

The Trump administration has been fighting in court with public and nonprofit hospitals since 2017 over a plan to slash the reimbursement rates for drugs prescribed to Medicare patients.

In 2018, Park Ridge Health, a not-for-profit healthcare network in western North Carolina that serves a large population of lower-income patients, delayed plans to buy a new CT scanner for stroke patients.

The Trump administration had drastically scaled back a federal drug reimbursement program that benefitted public and not-for-profit hospitals. Park Ridge, now called AdventHealth Hendersonville, stood to lose $3.3 million per year, the hospital’s chief financial officer wrote in a court affidavit, and it wasn’t just the CT scanner on the line — that money went toward a variety of services for elderly and poor patients, including new cancer treatment facilities, women’s healthcare, and partnerships with nonprofits on issues like prescription drug abuse.

Park Ridge and other hospitals have been battling with the administration in court for three years over a plan to slash by nearly 30% the reimbursement rate that hospitals get for certain drugs prescribed to Medicare patients. The hospitals won the first round. The US Court of Appeals for the DC Circuit heard arguments in November and has yet to rule, and for now the cut is still in effect. In the meantime, the Centers for Medicare & Medicaid Services (CMS) is exploring another way to make the cut if they lose the case, over the objection of hospitals.

The litigation predates the coronavirus pandemic, but the stakes are higher as hospitals nationwide lose tens of billions of dollars weekly while nonessential services and elective surgeries are on hold because of the ongoing crisis.

“If [hospitals] lost that money now, it would make an already dire financial situation worse,” Lindsay Wiley, director of the Health Law and Policy Program at American University Washington College of Law, wrote in an email to BuzzFeed News.

Hospitals that serve a high proportion of lower-income patients can buy outpatient drugs at a discounted price through what’s known as the 340B program. Until 2017, these hospitals were reimbursed by the federal government for drugs prescribed to Medicare patients at a higher rate than the discounted price the hospitals paid.

The CMS announced in 2017 that it was slashing the reimbursement rate from 6% above the average price of the drugs to 22.5% below the average cost. The agency said the program gave hospitals an incentive to overprescribe drugs and cost patients more money, and shouldn’t provide a windfall to subsidize other services.

Hospitals that opposed the change argued that they had put money earned through the program — which can run in the millions of dollars for a hospital each year — into services for poor and underserved communities, as Congress intended.

The CMS estimated that cutting the reimbursement rate for the drugs would reduce the amount of money paid to hospitals by $1.6 billion in 2018 alone. Scaling back that funding would actually increase the rates paid by the government for other services for Medicare patients — the payment system has to be “budget neutral” — but Park Ridge and other hospitals that took the administration to court said they still expected net losses of millions of dollars.

Many hospitals that participate in the 340B program “are in the red to begin with,” said Maureen Testoni, president and CEO of 340B Health, a membership group for hospitals and health systems that participate.

“So on top of that, you add this pandemic and all the financial turmoil that this has caused,” Testoni said. The pandemic has highlighted “how critical [hospitals] are … and what an important role they play. And, financially, they’re not in a situation where they can play that role when they have this big financial reduction.”

While waiting for the DC Circuit to rule, the CMS is exploring ways to move forward with the rate cut even if it loses. Last month, the agency launched a survey to collect data from 340B hospitals that the CMS says would address the issues that led the lower court judge to rule against the government. Hospitals opposed the survey and asked the agency to at least delay it, saying they’d have to divert resources that are already stretched thin during the pandemic to respond.

“Now is not the time to distract hospitals’ attention from the vital job at hand to complete a CMS survey on drug acquisition costs. By launching the survey with no notice on April 24 and providing less than three weeks to respond, CMS is creating an unnecessary burden on hospitals at the worst possible moment,” Testoni wrote in a May 4 letter to the agency. The agency didn’t respond.

Representatives of hospitals involved in the lawsuits declined interview requests, citing the pending litigation. The American Hospital Association, a lead plaintiff, declined an interview request but sent a statement:

“The COVID-19 pandemic has created the greatest financial crisis in history for America’s hospitals and health systems, with our field losing over $50 billion each month. While it is too soon to have precise data on the full impact of this pandemic, the unlawful Medicare cuts that we are contesting in federal court have added significantly to the financial pressure all hospitals face,” the group said.

A spokesperson for the Department of Health and Human Services did not return a request for comment. In court, the Justice Department has argued that the district court judge lacked authority to review the rate cut at all, and that even if he could, the government had the power to bring the rate in line with what the available data showed hospitals were paying for the drugs.

“[O]vercompensation for some drugs or treatments means reduced payments for other drugs and treatments, and correcting overcompensation permits more equitable distribution of limited funds,” Justice Department lawyers argued in the government’s brief to the DC Circuit. “The result of bringing the Medicare payment amount for 340B drugs into alignment with average acquisition cost was therefore the redistribution of the anticipated $1.6 billion in savings, resulting in a 3.2% increase in the Medicare payment rates for non-drug items and services.”

Congress created the 340B program in 1992. Healthcare providers eligible for the program can buy outpatient drugs at discounted rates from pharmaceutical companies. When hospitals prescribe those drugs to patients covered by Medicare — the federal insurance program for people who are over the age of 65 or have disabilities — they submit claims to the government for reimbursement.

Starting in 2006, Congress gave the CMS two options to set the drug reimbursement rate. It could rely on what hospitals were actually paying to buy drugs if it had “statistically sound survey data” or, if that wasn’t available, the average sales price of the drugs. If the agency used the second, alternative option, Congress set a default rate: the average sales price plus 6%.

In the summer of 2017, the Trump administration announced a plan to change the rate. Under the new rule, the Medicare agency said it would pay the average sales price of drugs minus 22.5%. That rate would come closer to matching the discounted rate hospitals were paying through the 340B program, the agency said.

Hospitals don’t have to track or disclose how they use money saved through the program. Kelly Cleary, who spent three years as the chief legal officer for the CMS, said hospitals had provided examples of how they were using the funds to expand services into underserved areas and provide free or low-cost care.

“The money was going toward a purpose that was consistent with their mission,” said Cleary, who was involved in the CMS’s effort to change the rate and defend it in court. She returned to private practice last month as a partner at the law firm Akin Gump Strauss Hauer & Feld.

The chief financial officer for the Henry Ford Health System, which serves patients in Detroit and Jackson, Michigan, wrote in a court affidavit that even if the cut meant that reimbursement rates increased for other Medicare services, the hospital network still expected to lose around $8.5 million by the end of 2018 — money that had gone toward services for patients with low incomes, such as free and low-cost medications, a free community clinic, and mobile health units.

The margin between what the Henry Ford Health System paid for drugs through the 340B program and what it received back from Medicare helped hospitals in that network provide care for “underserved and indigent populations … that would otherwise be financially unsustainable,” the officer wrote.

In support of the rate cut, the CMS pointed to a 2015 report by the Government Accountability Office that showed hospitals participating in the program had an incentive to prescribe more drugs than hospitals that weren’t in the program, and that meant higher copayments for Medicare patients who were prescribed more drugs or higher-priced drugs. The agency concluded hospitals were receiving too much of a net financial benefit.

“While we recognize the intent of the 340B Program,” the agency wrote in a November 2017 notice in the Federal Register, “we believe it is inappropriate for Medicare to subsidize other activities.”

It’s a position that aligned the government with the pharmaceutical industry, which argued that some hospitals had abused the program. Drugmakers pointed out that even with a cut to the reimbursement rate, the healthcare providers would still get the benefit of discounted drugs. A representative of PhRMA, a membership group for the pharmaceutical industry, declined an interview request, but sent BuzzFeed News a copy of comments the group submitted in support of the cut.

“PhRMA is concerned that the 340B program continues to grow rapidly and without patient benefits, thus increasingly departing from its purpose and statutory boundaries,” the group wrote. “This growth in the 340B program creates market-distorting incentives that affect consumer prices for medicines, shift care to more expensive hospital settings, and accelerate provider market consolidation.”

Hospitals that supported the program, meanwhile, said the proposal punished providers who work with vulnerable patients, and they urged the CMS to focus its efforts instead on bringing down drug costs.

The agency disputed that the plan was punitive and said that “lowering the price of pharmaceuticals is a top priority” but was outside the scope of what it was considering at the time.


Hospitals and hospital associations began suing the administration shortly after the rule became final in November 2017. They argued that the CMS had come up with the new rate using a process that Congress hadn’t approved. The agency admitted that it didn’t have the “statistically sound” survey data on what hospitals were actually paying for the drugs — the first method Congress had laid out — so instead it used an estimate of average purchase costs compiled by the Medicare Payment Advisory Commission, an agency that advises Congress.

The problem with the government’s approach, the hospitals argued, was that Congress had said the CMS could either use survey data on purchase costs or the average sales price of the drugs, but not a hybrid of the two. Congress had given the CMS authority to “adjust” rates, but cutting the reimbursement rate by nearly 30% was more than just an adjustment, the hospitals said.

US District Judge Rudolph Contreras in Washington, DC, sided with the hospitals. In a December 2018 opinion, he wrote that the rate cut’s “magnitude and its wide applicability inexorably lead to the conclusion” that the agency had “fundamentally altered” what Congress had spelled out.

The judge stopped short of blocking the rule and ordering the government to reimburse hospitals for the difference between the previous rate and the CMS’s new, lower rate, however, writing that it was “likely to be highly disruptive.” He noted that the payment system had to stay budget neutral, which meant the money would need to come from another source, a “quagmire that may be impossible to navigate” given how much money the government paid out of Medicare each year. He asked for more briefing on what the agency should do to fix the problem, but that issue was put on hold as the administration took the case to the DC Circuit.

A three-judge DC Circuit panel heard arguments on Nov. 8 and has yet to release a decision. In the meantime, hospitals have continued to file lawsuits as their claims for reimbursement at the previous, higher rate are rejected; earlier this month, a hospital system in Jacksonville, Florida, which is part of the University of Florida, filed a new suit in federal court in Washington. And the CMS is going ahead with its survey over the objections from hospitals.

“The pandemic amplifies the significance of this policy, but the fact remains that there were winners and losers with the policy and it’s always going to be a zero-sum game,” Cleary said. “If the court rules against the agency and the agency is forced to walk back the policy, that stands to negatively impact thousands of hospitals.”

Wiley, of American University, told BuzzFeed News that even before the pandemic, the fight over the 340B program highlighted how hospitals and drugmakers were “actively throwing each other under the bus” in the broader debate about who was to blame for the high cost of prescription drugs and what the federal government should do about it.

“Which stakeholders voters perceive to be the heroes of the pandemic response could affect health reform and reimbursement politics for years to come,” she wrote.

 

 

 

100,000 Lives Lost to COVID-19. What Did They Teach Us?

https://www.propublica.org/article/100000-lives-lost-to-covid-19-what-did-they-teach-us?utm_source=pardot&utm_medium=email&utm_campaign=dailynewsletter&utm_content=feature

May 27 data: Four new Utah COVID-19 deaths as US count tops ...

Each person who has died of COVID-19 was somebody’s everything. Even as we mourn for those we knew, cry for those we loved and consider those who have died uncounted, the full tragedy of the pandemic hinges on one question: How do we stop the next 100,000?

The United States has now recorded 100,000 deaths due to the coronavirus.

It’s a moment to collectively grieve and reflect.

Even as we mourn for those we knew, cry for those we loved and consider also those who have died uncounted, I hope that we can also resolve to learn more, test better, hold our leaders accountable and better protect our citizens so we do not have to reach another grim milestone.

Through public records requests and other reporting, ProPublica has found example after example of delays, mistakes and missed opportunities. The CDC took weeks to fix its faulty test. In Seattle, 33,000 fans attended a soccer match, even after the top local health official said he wanted to end mass gatherings. Houston went ahead with a livestock show and rodeo that typically draws 2.5 million people, until evidence of community spread shut it down after eight days. Nebraska kept a meatpacking plant open that health officials wanted to shut down, and cases from the plant subsequently skyrocketed. And in New York, the epicenter of the pandemic, political infighting between Gov. Andrew Cuomo and Mayor Bill de Blasio hampered communication and slowed decision making at a time when speed was critical to stop the virus’ exponential spread.

COVID-19 has also laid bare many long-standing inequities and failings in America’s health care system. It is devastating, but not surprising, to learn that many of those who have been most harmed by the virus are also Americans who have long suffered from historical social injustices that left them particularly susceptible to the disease.

This massive loss of life wasn’t inevitable. It wasn’t simply unfortunate and regrettable. Even without a vaccine or cure, better mitigation measures could have prevented infections from happening in the first place; more testing capacity could have allowed patients to be identified and treated earlier.

The COVID-19 pandemic is not over, far from it.

At this moment, the questions we need to ask are: How do we prevent the next 100,000 deaths from happening? How do we better protect our most vulnerable in the coming months? Even while we mourn, how can we take action, so we do not repeat this horror all over again?

Here’s what we’ve learned so far.

Though we’ve long known about infection control problems in nursing homes, COVID-19 got in and ran roughshod.

From the first weeks of the coronavirus outbreak in the United States, when the virus tore through the Life Care Center in Kirkland, Washington, nursing homes and long-term care facilities have emerged as one of the deadliest settings. As of May 21, there have been around 35,000 deaths of staff and residents in nursing homes and long-term care facilities, according to the nonprofit Kaiser Family Foundation.

Yet the facilities have continued to struggle with basic infection control. Federal inspectors have found homes with insufficient staff and a lack of personal protective equipment. Others have failed to maintain social distancing among residents, according to inspection reports ProPublica reviewed. Desperate family members have had to become detectives and activists, one even going as far as staging a midnight rescue of her loved one as the virus spread through a Queens, New York, assisted living facility.

What now? The risk to the elderly will not decrease as time goes by — more than any other population, they will need the highest levels of protection until the pandemic is over. The CEO of the industry’s trade group told my colleague Charles Ornstein: “Just like hospitals, we have called for help. In our case, nobody has listened.” More can be done to protect our nursing home and long term care population. This means regular testing of both staff and residents, adequate protective gear and a realistic way to isolate residents who test positive.

Racial disparities in health care are pervasive in medicine, as they have been in COVID-19 deaths.

African Americans have contracted and died of the coronavirus at higher rates across the country. This is due to myriad factors, including more limited access to medical care as well as environmental, economic and political factors that put them at higher risk of chronic conditions. When ProPublica examined the first 100 recorded victims of the coronavirus in Chicago, we found that 70 were black. African Americans make up 30% of the city’s population.

What now? States should make sure that safety-net hospitals, which serve a large portion of low-income and uninsured patients regardless of their ability to pay, and hospitals in neighborhoods that serve predominantly black communities, are well-supplied and sufficiently staffed during the crisis. More can also be done to encourage African American patients to not delay seeking care, even when they have “innocent symptoms” like a cough or low-grade fever, especially when they suffer other health conditions like diabetes.

Racial disparities go beyond medicine, to other aspects of the pandemic. Data shows that black people are already being disproportionately arrested for social distancing violations, a measure that can undercut public health efforts and further raise the risk of infection, especially when enforcement includes time in a crowded jail.

Essential workers had little choice but to work during COVID-19, but adequate safeguards weren’t put in place to protect them.

We’ve known from the beginning there are some measures that help protect us from the virus, such as physical distancing. Yet millions of Americans haven’t been able to heed that advice, and have had no choice but to risk their health daily as they’ve gone to work shoulder-to-shoulder in meat-packing plants, rung up groceries while being forbidden to wear gloves, or delivered the mail. Those who are undocumented live with the additional fear of being caught by immigration authorities if they go to a hospital for testing or treatment.

What now? Research has shown that there’s a much higher risk of transmission in enclosed spaces than outdoors, so providing good ventilation, adequate physical distancing, and protective gear as appropriate for workers in indoor spaces is critical for safety. We also now know that patients are likely most infectious right before or at the time when symptoms start appearing, so if workplaces are generous about their sick leave policies, workers can err on the side of caution if they do feel unwell, and not have to choose between their livelihoods and their health. It’s also important to have adequate testing capacity, so infections can be caught before they turn into a large outbreak.

Frontline health care workers were not given adequate PPE and were sometimes fired for speaking up about it.

While health workers have not, thankfully, been dying at conspicuously higher rates, they continue to be susceptible to the virus due to their work. The national scramble for ventilators and personal protective equipment has exposed the just-in-time nature of hospitals’ inventories: Nurses across the country have had to work with expired N95 masks, or no masks at all. Health workers have been suspended, or put on unpaid leave, because they didn’t see eye to eye with their administrators on the amount of protective gear they needed to keep themselves safe while caring for patients.

First responders — EMTs, firefighters and paramedics — are often forgotten when it comes to funding, even though they are the first point of contact with sick patients. The lack of a coherent system nationwide meant that some first responders felt prepared, while others were begging for masks at local hospitals.

What now? As states reopen, it will be important to closely track hospital capacity, and if cases rise and threaten their medical systems’ ability to care for patients, governments will need to be ready to pause or even dial back reopening measures. It should go without saying that adequate protective gear is a must. I also hope that hospital administrators are thinking about mental health care for their staffs. Doctors and nurses have told us of the immense strain of caring for patients whom they don’t know how to save, while also worrying about getting sick themselves, or carrying the virus home to their loved ones. Even “heroes” need supplies and support.

What we still have to learn:

There continue to be questions on which data is lacking, such as the effects of the coronavirus on pregnant women. Without evidence-based research, pregnant women have been left to make decisions on their own, sometimes trying to limit their exposure against their employer’s wishes.

Similarly, there’s a paucity of data on children’s risk level and their role in transmission. While we can confidently say that it’s rare for children to get very ill if they do get infected, there’s not as much information on whether children are as infectious as adults. Answering that question would not just help parents make decisions (Can I let my kid go to day care when we live with Grandma?) but also help officials make evidence-based decisions on how and when to reopen schools.

There’s some research I don’t want to rush. Experts say the bar for evidence should be extremely high when it comes to a vaccine’s safety and benefit. It makes sense that we might be willing to use a therapeutic with less evidence on critically ill patients, knowing that without any intervention, they would soon die. A vaccine, however, is intended to be given to vast numbers of healthy people. So yes, we have to move urgently, but we must still take the time to gather robust data.

Our nation’s leaders have many choices to make in the coming weeks and months. I hope they will heed the advice of scientists, doctors and public health officials, and prioritize the protection of everyone from essential workers to people in prisons and homeless shelters who does not have the privilege of staying home for the duration of the pandemic.

The coronavirus is a wily adversary. We may ultimately defeat it with a vaccine or effective therapeutics. But what we’ve learned from the first 100,000 deaths is that we can save lives with the oldest mitigation tactics in the public health arsenal — and that being slow to act comes with a terrible cost.

I refuse to succumb to fatalism, to just accepting the ever higher death toll as inevitable. I want us to make it harder for this virus to take each precious life from us. And I believe we can.