Biden administration’s vaccine mandate for healthcare workers is a go

https://mailchi.mp/92a96980a92f/the-weekly-gist-january-14-2022?e=d1e747d2d8

Explainer: The legal challenges awaiting Biden's vaccine mandate | Reuters

Biden administration’s vaccine mandate for healthcare workers is a go, but its mandate for large employers and at-home testing plan face roadblocks. The US Supreme Court ruled Thursday that the vaccine mandate for the nation’s healthcare workers at facilities participating in Medicare and Medicaid can go forward while lower courts hear legal challenges. But it said that the Occupational Safety and Health Administration (OSHA) did not have the authority to enforce the broader vaccine-or-test mandate for businesses over 100 employees, which would have covered more than 80 million private sector workers.

Meanwhile, private insurers are required to begin covering eight at-home tests per beneficiary per month starting tomorrow. The roughly half of Americans with private insurance coverage stand to benefit, if they’re lucky enough to get their hands on rapid tests, which have been in increasingly scarce supply.

The Gist: Health systems that were early to issue vaccine mandates will have a leg up on others who paused requirements amid ongoing legal challenges. Lagging facilities now have a little over a month to start enforcement amid troublesome staffing shortages.

Also, the use of the private insurance system to cover at-home tests not only excludes nearly 40 million seniors on traditional Medicare, as well as the uninsured, but means that the cost of tests will ultimately be borne by consumers and employers through higher insurance premiums.

Federal appeals court revives Biden’s vaccine mandate for health workers in 26 states

https://www.fiercehealthcare.com/hospitals/federal-appeals-court-revives-biden-s-vax-mandate-for-health-workers-26-states?utm_source=email&utm_medium=email&utm_campaign=HC-NL-FierceHealthcare&oly_enc_id=8564C4000334E5C

A federal appeals court has reinstated in 26 states a Biden administration vaccination mandate for health workers at hospitals that receive federal funding.

A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans ruled (PDF) that a lower court had the authority to block the mandate in only the 14 states that had sued and was wrong to impose a nationwide injunction.

It marks a modest win for the Biden administration’s pandemic strategy following a series of legal setbacks to the health worker vaccine mandate. Numerous lawsuits have been filed seeking to block vaccine mandates issued by governments and businesses as public health measures amid a pandemic that has killed more than 800,000 Americans.

The Centers for Medicare & Medicaid Services (CMS) announced in early November that it would be requiring applicable healthcare facilities to have a policy in place ensuring that eligible staff receive their first dose of a COVID-19 vaccine series by Dec. 5 and to have completed their series by Jan. 4, 2022. Failure to comply with the requirement, which covers 17 million healthcare workers, would place an organization’s Medicare funding in jeopardy.

But the mandate was blocked before the deadline and remains temporarily blocked in 24 states: the 14 states involved in the case reviewed by the New Orleans appeals court and 10 states where the mandate was blocked by a Nov. 29 ruling from a federal judge in St. Louis.

The 14 states that sued are Alabama, Arizona, Georgia, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Montana, Ohio, Oklahoma, South Carolina, Utah and West Virginia.

In the lawsuits, states argued that CMS exceeded its authority with the rule and did not have good cause to forego the required notice and comment period. States that sued the Biden administration over the vaccine mandate also cited the ongoing workforce shortages affecting healthcare providers in their states.

In explaining its ruling, the 5th Circuit noted that the Louisiana-based federal judge had given “little justification for issuing an injunction outside the 14 states that brought this suit.”

As it stands, the vaccine requirement for Medicare and Medicaid providers is blocked by courts in about half of U.S. states but not in the other half, creating the potential for patchwork enforcement across the country.

Healthcare associations, individual experts and the Biden administration have all stood firm on the importance of vaccination mandates, with the novel omicron variant only adding to the president’s urgency to get shots in arms.  

However, the administration’s broader requirements have so far faced stiff competition from courts as well as right-leaning lawmakers and governors alike.

A Texas judge Wednesday separately granted a preliminary injunction to the state of Texas against the vaccine mandate, The Hill reported.

The Supreme Court this week also blocked a challenge to New York’s requirement that healthcare workers be vaccinated against COVID-19 even when they cite religious objections.

Supreme Court hears 340B rate cut case

https://mailchi.mp/016621f2184b/the-weekly-gist-december-3-2021?e=d1e747d2d8

Earlier this week, the American Hospital Association (AHA) made its case before the US Supreme Court, in opposition to Medicare reimbursement cuts to hospitals that participate in the 340B Drug Pricing Program. The program allows hospitals that serve low-income patients to purchase outpatient drugs at a discount.

In the graphic above, we look at what’s at stake for hospitals in the case. Beginning in 2018, Medicare cut reimbursement for 340B-eligible drugs purchased by most hospitals by 28.5 percentage points, amounting to roughly $1.6B annually—which was a significant hit to hospitals’ 340B revenue. As we recently discussed, that revenue has become essential for many hospitals’ financial sustainability. However, the true impact on hospital bottom lines is more nuanced, as the savings from 340B rate cuts are being redistributed to all hospitals that participate in the Outpatient Prospective Payment System (OPPS), regardless of their 340B status, via a 3.2 percent payment bump for non-drug Part B services. While the cut negatively impacts those with large 340B programs—generally larger hospitals located in urban areas—the resulting redistribution actually provides a net benefit to about four in five hospitals.

Although 340B program revenues are at stake, the broader legal question before the Court centers on the level of authority federal agencies like the Centers for Medicare & Medicaid Services (CMS) have to create regulations to interpret ambiguous laws. (If the justices rule against CMS, it will overturn a key legal doctrine known as the Chevron Defense, which compels courts to defer to an agency’s interpretation of unclear statutes.)

A ruling isn’t expected until next spring, but regardless of the outcome, the 340B program faces other threats, chiefly from several lawsuits involving large pharmaceutical manufacturers’ moves to restrict discounted product sales to contract pharmacies. Undoubtedly, the ongoing scrutiny of the 340B program will continue to raise questions about whether there are better ways to subsidize the operations of hospitals serving low-income patients and ensure that underserved patients have access to lifesaving treatments.

Justices mull Chevron and voice skepticism of Medicare’s rate cut for hospital drugs

Justices mull Chevron and voice skepticism of Medicare's rate cut for hospital  drugs - SCOTUSblog

Over at Scotusblog, I’ve posted a recap of yesterday’s oral argument on American Hospital Association v. Becerra.

The Supreme Court appeared receptive to the claim that Medicare overstepped its authority when it cut the amount that it paid certain hospitals for drugs they dispensed in their outpatient departments. None of the justices voiced sympathy with the government’s argument that Congress had precluded judicial review of the question. And while oral argument mainly involved a technical discussion about statutory meaning, several of the conservative justices toyed with the possibility of abandoning Chevron deference — the principle that the courts will defer to an agency’s reasonable interpretation of the statute that it administers.

It is always treacherous to try to anticipate what the justices will decide from the questions they ask at oral argument. Still, it’s safe to say that the hospitals challenging Medicare’s rate change had a good day in court. If they prevail, 340B hospitals will recoup billions in withheld payments and will continue to have an enormous incentive to dispense expensive drugs in their outpatient centers, even when cheaper and equally effective alternatives exist.

That’s a bad policy outcome, whatever the Supreme Court thinks the law requires. If Medicare lacks the legal power to fix it, however, it will be up to Congress to narrow the gap between 340B drug costs and Medicare payments. We could be waiting a very long time for a solution.

Chevron deference at stake in fight over payments for hospital drugs

Chevron deference at stake in fight over payments for hospital drugs -  SCOTUSblog

How much should we pay for drugs? That’s the question at the center of American Hospital Association v. Becerra, a sleeper of a case involving billions of dollars in federal spending and a chance to reshape two doctrines at the heart of administrative law.

Drugs, money, and the law: Sounds sexy, right? Still, you could be forgiven for never having heard of the case, which will be argued on Tuesday. It arises out of a technical dispute over how Medicare, the federal program that insures 63 million elderly and disabled people, pays for some of the drugs that hospitals dispense to patients in outpatient departments — in particular, chemotherapy drugs and other expensive anti-cancer medications.

The case centers on part of a 2003 law that gives Medicare two options for how to pay for those drugs. Under the first option, Medicare would survey hospitals about what it cost them to acquire the drugs. Medicare would then draw on the survey data and reimburse hospitals for their “average acquisition costs,” subject to variations for different types of hospitals. It’s a rough-cut way to make hospitals whole without requiring them to submit receipts for every drug purchase.

But Medicare immediately encountered a problem: It just wasn’t practical to survey hospitals about their acquisition costs. Fortunately, the law anticipated that possibility and gave Medicare a second option. In the absence of survey data, Medicare could pay the “average price” for the drug, “as calculated and adjusted by the Secretary [of Health and Human Services] as necessary for purposes of this [option].”

This approach turned out to be costly. A drug’s “average price” is fixed elsewhere in the Medicare statute, typically at 106% of the drug’s sale price. As a policy matter, this “average sales price plus 6%” approach is hard to defend. Because 6% of a large number is bigger than 6% of a small number, hospitals have an incentive to dispense more expensive drugs, even when there are cheaper and equally effective therapies.

Other developments soon made the payment policy look even more dubious. Back in 1992, Congress created something called the 340B program to support health-care providers that serve poor and disadvantaged communities. Eligible providers get steep discounts on the drugs that they purchase — anywhere between 20% and 50% of the normal price.

Initially, few hospitals qualified for the 340B program. Today, more than two-thirds of nonprofit hospitals participate. (For-profits are excluded from the program.) For years, Medicare kept paying those 340B hospitals 106% of the average sales price of their outpatient drugs. The upshot was that hospitals were buying highly discounted drugs and then charging the federal government full price. That heightened the incentive to prescribe very expensive medications — which is partly why Medicare spending on outpatient drugs has ballooned, growing an average of 8.1% per year from 2006 through 2017.

Federal regulators were troubled by the gap between hospital costs and Medicare payments. In their view, the point of the 2003 statute was to cover hospitals’ costs, not to subsidize 340B hospitals. That jibes with the Medicare statute more generally: Its “overriding purpose” is to provide “reasonable (not excessive or unwarranted) cost-based reimbursement.”

So Medicare adopted a rule that, starting in 2018, slashed the reimbursement rate for 340B hospitals’ outpatient drugs (or, more precisely, a subset of them) to 22.5% less than the average sales price. That was still generous, since on average the 340B discount is about one-third of a drug’s price. But it was much less generous than before, and Medicare estimated that the change would save taxpayers $1.6 billion every year.

The American Hospital Association, together with two hospital trade groups and three hospitals, filed suit. Had Medicare chosen option one, the plaintiffs argued, it could have focused on acquisition costs and even distinguished among hospital groups in setting payment rates. Instead, it chose option two, which says that Medicare must pay a drug’s “average price” — not its acquisition price — and doesn’t provide for discriminating between hospitals. While the plaintiffs acknowledged that Medicare could “adjust” the average price, they argued that a cut from 106% to 77.5% of the average sales price was not really an adjustment. It was a wholesale revision of the statutory scheme.

The plaintiffs encountered an obstacle right out of the gate. To prevent courts from second-guessing Medicare’s choices about how much to pay for outpatient care, the Medicare statute says that “[t]here shall be no administrative or judicial review” of those choices. In the government’s telling, Congress precluded review because Medicare has a fixed annual budget for outpatient care. Increasing payments for one type of care thus requires cutting payments for other types of care.

That linkage means that, if the plaintiffs win, it’s not just that they should have been paid more for certain drugs. It’s that all hospitals should have been paid less for other services. (That helps explains why coalitions representing rural and for-profit hospitals have filed amicus briefs in support of Medicare.) Unwinding that decision would be an administrative nightmare — which is why Congress precluded review in the first place.

As the plaintiffs see it, however, the government simply misreads the scope of the preclusion language. Though it generally precludes review of reimbursement decisions relating to outpatient care, it doesn’t cross-reference the subsection relating to outpatient drugs. Both the district court and the U.S. Court of Appeals for the District of Columbia Circuit agreed, invoking the strong presumption favoring judicial review of agency action.

On the merits, the plaintiffs fared less well. Though they won in the district court, the D.C. Circuit held that Medicare reasonably read the 2003 law to allow it to align hospital reimbursement with hospital acquisition costs. Medicare’s interpretation — and the scope of its authority to “adjust” payment rates — was thus owed deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, a 1984 decision holding that courts generally should defer to agencies’ reasonable interpretations of ambiguous statutes. Judge Cornelia Pillard dissented, arguing that the statute unambiguously foreclosed Medicare’s interpretation.

The plaintiffs asked the Supreme Court to review a single question: whether Medicare should receive Chevron deference for interpreting the 2003 law in the manner that it did. Tantalizingly, the plaintiffs noted that “[i]t is no secret that members of this Court have raised concerns about whether Chevron deference, particularly when applied as indiscriminately as it was in this case, violates the separation of powers.”

The Supreme Court bit. In its order granting certiorari, however, the court instructed the parties to brief an additional question: whether the Medicare statute precludes the lawsuit. What that means is that — in addition to resolving whether hospitals are entitled to billions of taxpayer dollars — the court will have the chance to address two foundational doctrines of administrative law: the presumption of reviewability and Chevron deference.

Arguably, AHA v. Becerra offers an unusually vivid example of the costs of a strong presumption of reviewability. If the plaintiffs win, what’s the remedy? Is Medicare supposed to reopen every outpatient payment decision that it’s made since 2018, given that paying more for 340B drugs means it should have paid less for other services? The plaintiffs say no, arguing that Medicare wouldn’t be required to make any retroactive adjustments. But the government fears otherwise and the answer is not at all clear. Isn’t that the kind of mess that preclusion is meant to avoid?

I’ve called in my academic work for abandoning the presumption of reviewability precisely because it disrespects Congress’ reasonable desire to shield some administrative decisions from judicial review. In recent years, however, the Supreme Court has evinced no interest in doing so — the presumption of reviewability remains “strong.” We may soon find out just how strong it is.

But the big question about the case is whether the court will use it as a vehicle to reconsider Chevron deference. In the plaintiffs’ view, it is galling — “an affront to the separation of powers” — that the courts would defer when Medicare has exploited a purported ambiguity to sidestep Congress’ clear instructions about how much to pay hospitals. Several of the conservative justices, including in particular Justices Clarence Thomas and Neil Gorsuch, may be receptive to the argument. If so, the right wing of the court could use the case to narrow or even overturn Chevron, with potentially dramatic implications for the scope of executive-branch power.

Whether the court will do so is anyone’s guess. The justices could easily resolve the case on narrower grounds. Maybe the statute unambiguously forecloses Medicare’s interpretation of the law, as the plaintiffs argue. Or maybe, as the government claims, Medicare properly exercised its explicit authority to “adjust” prices for outpatient drugs.

Neither of those holdings would be the sexiest decision that the Supreme Court has ever issued. It would be technical, arcane — even boring. Given the financial stakes, however, it would be significant nonetheless.

https://ballotpedia.org/Chevron_deference_(doctrine)

Understanding the mechanics of the 340B drug pricing program

https://mailchi.mp/96b1755ea466/the-weekly-gist-november-19-2021?e=d1e747d2d8

The 340B Drug Pricing Program, designed to increase access to specialty pharmaceuticals for low-income patients, is a perennial area of concern for health policy. The program has grown exponentially since its inception almost 30 years ago: 340B providers increased purchases of discounted drugs from $4B in 2009 to $38B in 2020, five times faster than the overall growth rate of US drug sales. Insurers and drug manufacturers are advocating for significant changes to the program, or even favor eliminating it entirely, claiming that 340B has grown beyond its original intent to help safety net facilities, and simply enriches providers without directly benefiting patients. Indeed, the profits from 340B have become essential for many hospitals’ sustainability; some systems tell us that 340B accounts for their entire margin.
 
In the graphic above, we outline the basics of revenue and product flow within this complex program. The 340B program is meant to allow hospitals that treat low-income, underserved patients to purchase drugs from manufacturers at a 25 to 50-plus percent discount, but still be reimbursed by payers at standard network rates. The discounts are intended to help hospitals overcome losses they incur in providing uncompensated care, but apply to drugs for all patients, regardless of income and insurance status. 340B providers often partner with independent pharmacies to dispense the drugs, and payers are billed the full list price for the medication. Thus, insured patients pay co-payments on the full price of drugs, leading to criticism that 340B savings are not passed on to patients. 340B providers share an estimated $40B in total annual profit with partner contract pharmacies.

The program has been targeted for overhaul by both the Trump and Biden administrations, and faces another threat later this month, when the US Supreme Court is set to hear a case between the hospital industry and the Department of Health and Human Services (HHS) to decide whether the Centers for Medicare & Medicaid Services (CMS) has the authority to enact payment cuts through rulemaking. 

If the court rules in favor of the agency, 340B providers could see significant cuts in payment rates. In our next edition, we’ll dive deeper into the potential impact of that ruling on the industry.

The next attack on the Affordable Care Act may cost you free preventive health care

The next attack on the Affordable Care Act may cost you free preventive  health care

Many Americans breathed a sigh of relief when the Supreme Court left the Affordable Care Act (ACA) in place following its third major legal challenge in June 2021. This decision left widely supported policies in place, like ensuring coverage regardless of preexisting conditions, coverage for dependents up to age 26 on their parents’ plan and removal of annual and lifetime benefit limits.

But the hits keep coming. One of the most popular benefits offered by the ACA, free preventive care through many employer-based and marketplace insurance plans, is under attack by another legal domino, Kelley v. Becerra. As University of Michigan law professor Nicholas Bagley sees it, “[t]his time, the law’s opponents stand a good chance of succeeding.”

We are public health and economics researchers at Boston University who have been studying how preventive care is covered by the ACA and what this means for patients. With this policy now in jeopardy, health care in the U.S. stands to take a big step backward.

What did the ACA do for preventive health?

The Affordable Care Act tried to achieve the twin ideals of making health care more accessible while reducing health care spending. It created marketplaces for individuals to purchase health insurance and expanded Medicaid to increase coverage for more low-income people.

One way it has tried to reach both goals is to prioritize preventive services that maximize patient health and minimize cost, like cancer screenings, vaccinations and access to contraception. Eliminating financial barriers to health screenings increases the likelihood that common but costly chronic conditions, such as heart disease, will be diagnosed early on.

Section 2713 of the ACA requires insurers to offer full coverage of preventive services that are endorsed by three federal groups: the U.S. Preventive Services Task Force, the Advisory Committee on Immunization Practices and the Health Resources and Services Administration. This means that eligible preventive services ordered by your doctor won’t cost you anything out of pocket. For example, the CARES Act used this provision to ensure COVID-19 vaccines would be free for many Americans.

Removing the financial barrier has drastically reduced the average cost of a range of preventive services. Our study found that the costs of well-child visits and mammograms were reduced by 56% and 74%, respectively, from 2006 to 2018. We also found that the ACA reduced the share of children’s preventive checkups that included out-of-pocket costs from over 50% in 2010 to under 15% in 2018.

Residual costs for preventive services remain

Despite these reductions in costs, there are limitations to this benefit. For example, it doesn’t cover follow-up tests or treatments. This means that if a routine mammogram or colonoscopy reveals something that requires further care, patients may have to pay for the initial screening test, too. And some patients still receive unexpected bills for preventive care that should have been covered. This can happen, for example, when providers submit incorrect billing codes to insurers, which have specific and often idiosyncratic preventive care guidelines.

We also studied the residual out-of-pocket costs that privately insured Americans had after using eligible preventive services in 2018. We found that these patients paid between $75 million to $219 million per year combined for services that should have been free for them. Unexpected preventive care bills were most likely to hit patients living in rural areas or the South, as well as those seeking women’s services such as contraception and other reproductive health care. Among patients attempting to get a free wellness visit from their doctor, nearly 1 in 5 were later asked to pay for it.

Nevertheless, the preventive health provision of the ACA has resulted in significant reductions in patient costs for many essential and popular services. And removing financial barriers is a key way to encourage patients to use preventive services intended to protect their health.

The threat of Kelley v. Becerra

The plaintiffs who brought the latest legal challenge to the ACA, Kelley v. Becerra, object to covering contraception and preexposure prophylaxis (PrEP) for HIV on religious and moral grounds. The case is currently awaiting decision in a district court in Texas, but seems to be headed to the Supreme Court.

The case rests on two legal issues: 1) violation of the nondelegation doctrine, and 2) the appointments clause of the Constitution. The nondelegation doctrine is a rarely used legal argument that requires Congress to specify how their powers should be used. It essentially argues that Congress was too vague by not specifying which preventive services would be included in Section 2713 up front. The appointments clause specifies that the people using government powers must be “officers of the United States.” In this case, it is unclear whether those in the federal groups that determine eligible preventive care services qualify.

Texas District Judge Reed O’Connor has indicated so far that he takes a kind view toward the plaintiff’s case. He could rule that this provision of the ACA is unconstitutional and put the case on a path to the Supreme Court.

Patients stand to lose more than just money

If Section 2713 were repealed, insurers would have the freedom to reimpose patient cost-sharing for preventive care. In the short run, this could increase the financial strain that patients face when seeking preventive care and discourage them from doing so. In the long run, this could result in increased rates of preventable and expensive-to-treat chronic conditions. And because Section 2713 is what allows free COVID-19 vaccines for those with private health insurance, some patients may have to pay for their vaccines and future boosters if the provision is axed.

The ACA has been instrumental in expanding access to preventive care for millions of Americans. While the ACA’s preventive health coverage provision isn’t perfect, a lot of progress that has been made toward lower-cost, higher-value care may be erased if Section 2713 is repealed.

Lower-income patients will stand to lose the most. And it could make ending the COVID-19 pandemic that much harder.

340B Drug Payment Case Heads to Supreme Court

Supreme court to hear 340B drug payment case

The US Supreme Court recently announced that it will hear an ongoing debate over cuts to 340B drug payments to Medicare hospitals.

The case will be heard during the Supreme Court’s upcoming term, which starts in October. A decision is expected sometime next year.

The case was brought on by the American Hospital Association (AHA) and other national hospital groups seeking to overturn HHS’ decision to reduce Medicare reimbursement to hospitals in the 340B Drug Pricing Program by nearly 30 percent.

HHS had finalized the cuts in the 2018 Outpatient Prospective Payment System (OPPS) rule. The federal department said in a fact sheet that the cuts address the “recent trends of increasing drug prices, for which some of the cost burden falls to Medicare beneficiaries.”

Hospital groups led by the AHA challenged the cuts, arguing that reduced drug payments would harm access to care since the 340B Drug Pricing Program includes safety-net hospitals. An appeals court did not agree with their arguments in August 2020, ruling in favor of HHS.

We are pleased that the U.S. Supreme Court has agreed to hear the compelling arguments in our case on payments cuts to the 340B drug pricing program that are adversely impacting care to patients,” Melinda Hatton, the AHA’s general counsel, said publicly on Friday.

“We are hopeful that the Court will reject the appellate court decision deferring to the government’s interpretation of the law that clearly imperils the important services that the 340B program helps allow eligible hospitals and health systems to provide to vulnerable communities, many of which would otherwise be unavailable,” Hatton continued.

Other hospital groups also cheered the Supreme Court’s decision to hear the 340B drug payment case.

“We are pleased that the Supreme Court has agreed to review the appellate court decision, which we believe was legally flawed,”  Maureen Testoni, CEO of 340B Health, said on the group’s website.* “We are hopeful that the justices will reverse the lower court decision that upheld these damaging cuts to many 340B hospitals treating patients with low incomes. In the meantime, we continue to urge the Biden administration to change this harmful policy by abandoning the payment cuts for 2022 and beyond.”

The other plaintiff, Association of American Medical Colleges (AAMC), also said it is looking forward to the consideration of the case.

“The current reimbursement rates reduce the 340B drug discounts granted to safety-net providers, many of which are teaching hospitals,” explained David J. Skorton, MD, AAMC president and CEO. “These hospitals use the current savings to deliver critical health care services to low-income and vulnerable patients, which includes providing free or substantially discounted drugs to low-income patients, establishing neighborhood clinics, and improving access to specialized care previously unavailable in some areas. A reversal of the cuts will ensure that low-income, rural, and other underserved patients and communities are able to access the vital services they need.”

Neither HHS nor CMS provided a public statement regarding the Supreme Court’s decision to hear the 340B drug payment case.

The Supreme Court lets site-neutral payment policies proceed

https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8

Senators urge CMS to reconsider proposal to expand site-neutral policies |  AHA News

This week, the Supreme Court declined to hear an appeal challenging Medicare’s 2019 regulation calling for “site-neutral payment” for services provided by hospitals in outpatient settings, clearing the way for the rule’s implementation. The appeal was filed by the American Hospital Association (AHA), along with numerous hospitals and health systems, after a lower court ruling last year upheld the change to Medicare’s reimbursement policies.

The rule aims to level the playing field between independent providers and hospital-owned clinics by curtailing hospitals’ ability to charge higher “facility fees” for services provided in locations they own. Site-neutral payment has been a longstanding target of criticism by health economists and policymakers, who cite the pricing advantage as a driver of consolidation in the industry, which has tended to push the cost of care upward.

The AHA expressed disappointment in the Court’s decision not to hear the appeal, saying that the changes to payment policy “directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care.” The primary difference, of course, is hospitals’ need to fully allocate their costs across all the services they bill for, making care in lower-acuity settings more expensive than similar care delivered by practices that don’t have to subsidize inpatient hospitals and other costly assets.

Over the years that legitimate business need has turned into a deliberate business model—purchasing independent practices in order to take advantage of higher hospital pricing. As Medicare looks to manage Baby Boomer-driven cost growth, and employers and consumers grapple with rising health spending, expect increasingly rigorous efforts to push back against these kinds of pricing strategies.

An epic ACA trilogy draws to a close

https://mailchi.mp/bade80e9bbb7/the-weekly-gist-june-18-2021?e=d1e747d2d8

Supreme Court dismisses challenge to Affordable Care Act, leaving it in  place | News | albanyherald.com
\

Ruling by a decisive 7-2 margin, in what dissenting Justice Samuel Alito described as the third in “our epic Affordable Care Act trilogy”, the Supreme Court rejected the latest—and likely the last—effort to overturn the 2010 health reform law. Holding that the states and individuals that brought the latest challenge to the law did not have “standing”—the legal right to sue—the high court effectively closed the book on a decade-long series of challenges to the Affordable Care Act (ACA). Those efforts have included two previous Supreme Court cases, numerous promises to “repeal and replace” Obamacare, and the neutering of the law’s “individual mandate” to buy health insurance, which led to this latest case, Texas v. California.

At issue in the case was whether, by zeroing out the penalty for not purchasing insurance, Congress effectively removed the ACA’s status as a taxation measure, which the Court had previously held as central to the constitutionality of the law. In Alito’s dissenting opinion, the full implications of the issue are laid out: in his view, by invalidating the mandate, Congress rendered the entire law unconstitutional, meaning that it should be overturned. But a majority of seven Justices, including Kavanaugh and Barrett (both appointed by President Trump) disagreed, joining Justice Breyer in his opinion that no harm had been done to the states that brought the suit, and ordering that the case be returned to the lower court for dismissal.
 
More than ten years after the passage of the ACA, it now (finally) seems as though the law is here to stay. Bolstering its central provisions—subsidized individual insurance coverage, expanded Medicaid benefits, protections for those who purchase insurance—is a centerpiece of the Biden administration’s policy program, featured first in the American Rescue Plan Act, and now in the recovery legislation currently being debated. Republicans, who had long opposed the ACA, barely mentioned it during the last presidential campaign, instead turning their focus to thwarting Democrats’ plans to expand coverage by lowering the Medicare eligibility age or implementing a government-run “public option”.

Given the evenly split makeup of the Senate, however, we continue to believe the greatest hurdle such proposals will face is not Republican opposition, but reluctance on the part of conservative Democrats, like Sen. Joe Manchin (WV), whose votes will be needed for any legislation to pass.

With the Supreme Court calling a third strike against challenges to the ACA, and the new administration eager to advance its other priorities (infrastructure, childcare, jobs), for the first time in over a decade, we might just be in for a period of relative calm on the healthcare policy front.