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California Assembly Passes Bill Cracking Down on Dialysis Reimbursement
The California State Assembly on Wednesday passed a landmark bill cracking down on the prices and payment practices of dialysis centers, delivering a win to insurers who backed the bill and potentially threatening the profits of large dialysis chains like DaVita and Fresenius.
The bill places limits on third-party groups like the American Kidney Fund, a not-for-profit organization that subsidizes premiums for dialysis patients with commercial insurance. The bill also caps some commercial dialysis payments at lower Medicare rates.
DaVita and Fresenius are large contributors to the American Kidney Fund, and insurers and labor groups including the Service Employees International Union of California have argued that the charity’s payments are used to game the system and direct patients to insurers that provide higher reimbursement rates — and more profit — for the dialysis companies.
The American Kidney Fund has said that the bill “would cause profound harm” to many dialysis patients. It called the legislation “nothing more than a thinly-veiled attempt by large health insurance companies to kick kidney patients off their insurance plans.”
The state assembly’s vote means the bill now will likely head to the desk of Gov. Jerry Brown, who has until the end of next month to act on it.
Why it matters: “This is a giant win for the SEIU, health insurers and employers and a huge blow to dialysis companies and the American Kidney Fund,” writes Axios’ Caitlin Owens, adding that “there will be a fierce lobbying blitz” by the dialysis companies to get Brown to kill the bill. If the legislation does get signed into law, Modern Healthcare’s Susannah Luthi writes, it could have a major impact on DaVita and Fresenius, which have about 70% of California’s market share of just under 600 dialysis clinics and nearly 70,000 dialysis patients.”
Health care mega-mergers may get green light from feds
Antitrust regulators at the Department of Justice are expected to approve two major health care deals — CVS Health’s $69 billion buyout of Aetna and Cigna’s $67 billion deal for Express Scripts — within a matter of weeks, the Wall Street Journal reports.
Why it matters: The health insurance and pharmacy benefits industries would be even more heavily consolidated than they currently are, which has worried consumer advocates and providers. The WSJ reports the only required antitrust remedies would be for CVS and Aetna to divest overlapping assets in their Medicare prescription drug plans.
Is Obamacare Constitutional? The Battle Begins Again
http://www.thefiscaltimes.com/2018/09/05/Obamacare-Constitutional-Battle-Begins-Again
The debate over the Affordable Care Act entered a new phase Wednesday as a federal court in Texas began hearing oral arguments in a lawsuit brought by 20 Republican-led states challenging the constitutionality of the 2010 law.
Eighteen Republican state attorneys general and two GOP governors bringing the suit argue that the law’s individual mandate was rendered unconstitutional when Congress lowered the penalty for individuals who don’t buy coverage to zero.
The Supreme Court, in upholding the law in 2012, deemed that penalty a tax and thus a valid and legal exercise of Congress’ power of the purse. The lawsuit claims that the law is no longer constitutional because the zeroed-out penalty can no longer raise revenue. “It’s nothing but a hollow shell because its core has been invalidated,” said Misha Tseytlin, Wisconsin’s solicitor general.
The plaintiffs also claim that this means the entire ACA — and, in particular, its protections for patients with pre-existing conditions looking to buy insurance — must be struck down because the mandate can’t be severed from the rest of the law. The Trump Justice Department decided not to defend the ACA in the case.
What a Kavanaugh Confirmation Might Mean
The case, which legal experts see as a long shot, may still wind up before the Supreme Court — which is why Democrats have brought up Obamacare and its protections for patients with pre-existing conditions in this week’s confirmation hearing for Brett Kavanaugh, President Trump’s nominee to replace Justice Anthony Kennedy.
“Kavanaugh has signaled in private meetings with Senate Democrats that he is skeptical of some of the legal claims being asserted in the latest GOP-led effort to overturn the Affordable Care Act,” the Los Angeles Times’ Jennifer Haberkorn reported last week. Three Democrats in the meetings told the Times that Kavanaugh suggested that if one piece of the law is struck down, the rest of the law doesn’t necessarily have to fall with it.
But that may not be enough to assuage Democratic fears that Kavanaugh could be the deciding Supreme Court vote against Obamacare. “Democrats are more concerned about Kavanaugh’s past writings on expansive presidential powers, which they say could lead to his supporting efforts by the Trump administration to dismantle the health-care law without Congress,” The Washington Post’s Colby Itkowitz notes.
Where Public Opinion Stands
The political debate over Obamacare has shifted as public perception of the law has improved. The latest Kaiser Family Foundation tracking poll, released Wednesday, finds that 50 percent now view the law favorably while 40 percent see it unfavorably, with the divide still falling along partisan lines. Just under 80 percent of Democrats support the law, while a similar percentage of Republicans oppose it.
That may be why Republicans still view repealing the law as a potent issue with their base. Vice President Mike Pence, in Wisconsin last week to campaign for Senate candidate Leah Vukmir, said the GOP push to repeal and replace the health care law was still alive: “We made an effort to fully repeal and replace Obamacare and we’ll continue, with Leah Vukmir in the Senate, we’ll continue to go back to that,” he told reporters. With Sen. Jon Kyl (R-AZ) replacing John McCain, a critical vote against the GOP’s 2017 Obamacare repeal bill, there has been chatter about another potential repeal effort — though Senate Majority Leader Mitch McConnell effectively shot that down on Wednesday.
In the meantime, open enrollment on the ACA exchanges is set to begin on November 1, with the Trump administration once again providing reduced funding for outreach groups that help people enroll. A recent report by the nonpartisan Government Accountability Office criticized the administration’s management of Obamacare signup periods.
Why Protections for Pre-Existing Conditions Are Such a Potent Political Issue
The Affordable Care Act provisions preventing insurers from discriminating against patients with pre-existing medical conditions have become a popular — and politically potent — element of the law, and the new Kaiser Family Foundation tracking poll shows why: Six in 10 Americans say that they or someone in their household suffers from a pre-existing condition such as asthma, diabetes or high blood pressure.
It’s no surprise then that the tracking poll also finds that 75 percent of Americans now say that it is “very important” to keep the provision prohibiting insurance companies from denying a person coverage because of his or her medical history. Another 15 percent say it is “somewhat important” this provision stays in place. Similarly, 72 percent say it is “very important” that the provision to keep insurance companies from charging sick people more remains law. Another 19 percent say it is “somewhat important.”
In addition, more than 60 percent of Americans are “very worried” or “somewhat worried” that they will lose insurance coverage if the Supreme Court overturns the Affordable Care Act’s protections for people with pre-existing conditions. And 75 percent are “very worried” or somewhat worried” that they or a family member will have to pay more for coverage.
Democrats have been hammering the administration and Republicans for their willingness to have a court invalidate protections for those with pre-existing conditions.
As part of their effort to push back on that line of attack, 10 Republican senators last month introduced new legislation that they say would prevent insurance companies from denying coverage to people with pre-existing conditions, or charging those people more, no matter what happens in the Texas court case. Critics have said that the GOP bill’s protections don’t go as far as Obamacare’s. Republicans have responded by saying they’d be willing to look at changes to make the legislation more comprehensive.
Cartoon – Employee of the Decade
Healthcare Triage Podcast: What is cancer, and how do we treat it?
https://soundcloud.com/healthcaretriage/hctpod_renbarger
This month on the HCT Podcast, we’re talking to Dr. Jamie Renbarger, a pediatric oncologist and researcher. Dr. Renbarger tells us about what cancer is, the huge variety of cancer types, and some of the astonishing advances in treatment.
This episode of the Healthcare Triage podcast is presented in association with the Indiana University School of Medicine, whose mission is to advance health in the state of Indiana and beyond by promoting innovation and excellence in education, research, and patient care.
As always, you can find the podcast in all the usual places, like iTunes and Soundcloud.
Bundled Payment Program Does Not Drive Hospitals to Increase Volume
The Issue
In 2013, the Centers for Medicare and Medicaid Services (CMS) introduced a voluntary program for hospitals called Bundled Payments for Care Improvement (BPCI). Under this alternative payment model, CMS makes a single, preset payment for an episode, or “bundle,” of care, which may include a hospitalization, postacute care, and other services. Evaluations of the program for lower extremity joint replacement surgery (e.g., a hip or knee replacement) have found that it reduced spending. But experts wonder if bundled payments could encourage hospitals to perform more surgeries than they would otherwise or to cherry-pick lower-risk patients. Commonwealth Fund–supported researchers explore these issues of volume and case mix in the Journal of the American Medical Association.The authors used Medicare claims data from before and after the launch of BPCI, comparing markets that did and did not participate in the program.
What the Study Found
3.8%
increase in mean quarterly market volume in non-BPCI markets after the program was launched
4.4%
increase in mean quarterly market volume in BPCI markets after the program was launched
- Participation in the BPCI program was not significantly associated with an overall change in the volume of surgeries performed.
- The mean quarterly market volume in non-BPCI markets increased 3.8 percent after the program was launched. For BPCI markets, the increase was 4.4 percent.
- The analysis found only one change in case mix: patients who had previously used skilled nursing facilities were slightly less likely to undergo a lower extremity joint replacement surgery at a hospital participating in BPCI.
The Big Picture
Results from this study alleviate concerns that hospitals’ participation in voluntary bundles may increase the overall number of joint replacement surgeries paid for by Medicare. In particular, the savings per episode observed in prior BPCI evaluations are not diminished or eliminated by an increase in procedure volume. The findings do raise concerns: if patients with prior use of skilled nursing facilities are less likely to undergo procedures at BPCI-participating hospitals, perhaps it is because hospitals avoid them based on perceived risk. On the other hand, the authors note, these decisions could have been based on clinically appropriate factors, like risk of complications.
The Bottom Line
Hospital participation in a bundled care program did not change overall volume, thereby alleviating the risk of eliminating savings related to the program. In addition, participation was generally not associated with changes in case mix.
HENRY KOTULA 