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Efforts to Undo Pre-Existing Condition Protections Put Millions of Women and Girls at Risk

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https://www.americanprogress.org/issues/women/news/2018/06/21/452643/moving-backward/

A mother and her child visit the doctor, October 2013.

The Affordable Care Act (ACA) prohibits discriminatory insurance practices in pricing and coverage in the individual market. Before the law was enacted, women routinely were denied coverage or charged more for insurance based on so-called pre-existing conditions. For example, in the individual insurance market, a woman could be denied coverage or charged a higher premium if she had been diagnosed with or experienced HIV or AIDS; diabetes; lupus; an eating disorder; or pregnancy or a previous cesarean birth, just to name a few. The ACA provided women with protections for pre-existing conditions and access to comprehensive, affordable, and fair health services.

But recent efforts to eliminate key ACA protections, discussed below, would put millions of women and girls once again at risk of being charged more or denied coverage for individual insurance.

Efforts to eliminate ACA protections threaten the security of women with pre-existing conditions

Recently, the U.S. Department of Justice refused to uphold the law in Texas v. United States, when it argued that the community rating and guaranteed issue provisions of the ACA are unconstitutional. Without guaranteed issue, women could be denied coverage based on their medical history, their age, and their occupation, among other factors. Without community rating, women could be charged more, or priced out of the insurance market altogether, based on their health status or other factors. Insurance companies could also try to reinstate gender rating, a common pre-ACA practice in which insurance companies charged women higher premiums than they did men, even though other parts of the ACA protect women from discrimination in the health care system.

Now, think tanks and conservative opponents of the ACA are introducing proposals to repeal the ACA yet again. If implemented, these proposals would similarly put women at risk of being denied coverage or charged more because of their health status.

More than half of all women and girls have pre-existing conditions

The authors estimate that more than half of women and girls nationwide—more than 67 million—have pre-existing conditions. There are also nearly 6 million pregnancies each year, a commonly cited reason for denying women coverage on the individual market before the ACA. The two tables available for download below provide state-level detail for the number of women and girls with pre-existing conditions and the number of pregnancies.

A large share of women have coverage through an employer or Medicaid and would, therefore, not face discriminatory practices such as medical underwriting or denials based on health conditions. But the data make clear that allowing insurers to return to pre-ACA practices could lead to millions of women and girls being denied coverage or charged more based on their health status if they ever sought coverage in the individual market.

 

 

Allegheny Health Network plans four micro-hospitals

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https://www.healthcaredive.com/news/allegheny-health-network-plans-four-micro-hospitals/526218/

Dive Brief:

  • Allegheny Health Network (AHN) said it will open neighborhood hospitals near Pittsburgh in Brentwood Borough, Hempfield, Hamar and McCandless over the next year.
  • The smaller facilities will be open 24/7 and offer an emergency department, 10 inpatient beds, diagnostic care and other medical services. The neighborhood hospitals will also have onsite primary and specialty care physicians.
  • The four neighborhood hospitals are part of AHN and parent company Highmark Health’s $1 billion investment plan in western Pennsylvania.

Dive Insight:

AHN said it’s creating a for-profit joint venture with Emerus to build and manage the new facilities. The Texas-based company operates neighborhood hospitals, also known as micro-hospitals.

AHN said the four neighborhood hospitals are going into communities that have limited options for healthcare services.

Cynthia Hundorfean, AHN president and CEO, said the neighborhood hospitals will use a “patient-centered model” that will focus on emergency care, short hospital stays and outpatient services.

As hospitals move away from large, inpatient facilities, some healthcare organizations have turned to these kinds of facilities. They’re smaller, have less overhead and are not meant for long patient stays. More serious acute care cases would go to traditional local hospitals. Micro-hospitals have a small inpatient component, which makes them different from urgent care and standalone emergency departments.

Earlier this year, the Advisory Board Company released a report on micro-hospitals that predicted significant growth over the next five years. The report predicted that micro-hospital growth will depend on regulatory decisions and certificate of need approvals.

“Ultimately, the new wave of micro-hospitals will need to show they can consistently meet CMS’ minimum census requirements. However, the strategic flexibility these sites offer parent systems means their future can be bright. Expect significant growth over the next five years, with the potential for further growth contingent on positive clinical and financial results,” Advisory Board said.

AHN’s neighborhood hospital plan comes after the provider wing of Highmark Health reported its best operating performance year. Highmark announced in March that AHN enjoyed a nearly 8% increase in revenues in 2017 compared to the previous year. AHN finished 2017 with $3.1 billion in revenues.

Company officials said factors in the growth included stable hospital volumes and high patient acuity, greater operational efficiencies, better care coordination and improved business and clinical process, such as revenue cycle operations. In addition, physician office visits increased by more than 4% and ambulatory surgery center volume increased by 10%. However, AHN also laid off 75 employees in corporate jobs earlier this year, though the company said it plans to add another 1,000 jobs.

 

 

CMS seeks input on Stark Law changes amid value-based care shift

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https://www.healthcaredive.com/news/cms-seeks-input-on-stark-law-changes-amid-value-based-care-shift/526239/

Related image

Dive Brief:

  • The Centers for Medicare & Medicaid Services asked stakeholders Wednesday for input on how to change the Stark Law to allow for better care coordination and new alternative payment models or other novel financial arrangements.
  • The American Hospital Association has been vocal in pushing for changes to the physician self-referral law, calling it outdated. AHA argues the law presents “nearly impenetrable roadblocks in the move toward value-based care.”
  • The agency specifically is requesting input on what new exemptions to the Stark Law are needed to protect accountable care organization models, bundled payment models and other payment models, including how to allow coordination care outside of an alternative payment model. It also asks for help examining definitions for terminology such as risk-sharing, enrollee, gain-sharing and other terms.

Dive Insight:

The Stark Law, enacted in 1989, aims to cut down on financial incentives impacting physician care decisions. It prohibits certain Medicare-payable referrals to entities they have a financial or familial relationship with, and stops such entities from filing Medicare claims for referred services, unless exempted under certain instances.

CMS says that it is issuing the RFI in response to comments it has received that raised concern that the Stark Law is impeding participation in healthcare delivery and payment reform efforts.

“We are particularly interested in your thoughts on issues that include, but are not limited to, the structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements, the need for revisions or additions to exceptions to the physician self-referral law, and terminology related to alternative payment models and the physician self-referral law,” the CMS notice states.

In a statement submitted by AHA to the House Subcommittee on Health of the Committee on Ways and Means, the group urged Congress to step in to change Stark Law to allow hospitals and physicians to more closely work together.

“Congress should create a clear and comprehensive safe harbor under the anti-kickback law for arrangements designed to foster collaboration in the delivery of health care and incentivize and reward efficiencies and improvement in care,” AHA said.  “In addition, the Stark Law should be reformed to focus exclusively on ownership arrangements. Compensation arrangements should be subject to oversight solely under the anti-kickback law.”

CMS Administrator Seema Verma appears to be sympathetic. In a Wednesday blog post, she said the Stark Law may be prohibiting value-based arrangements that HHS has made a priority to shift towards. Previously, Verma said that CMS was going to put together an inter-agency group to examine potential changes to the law.

“I think that Stark was developed a long time ago, and this gets to where we are going modernizing the program,” Verma told AHA President and CEO Rick Pollack during a webcast in January. “The payment systems and how we are operating is different, and we need to bring along some of those regulations and figure out what we can do. And I’m not sure that this is not going to require some congressional intervention as well.”

CMS is asking for comments to be submitted on the RFI by August 24.

 

AT&T, Time Warner, and the Future of Health Care

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https://www.commonwealthfund.org/blog/2018/att-time-warner-and-future-health-care?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25

AT&T Time Warner Merger

Policymakers and private actors should not interpret a federal court’s AT&T and Time Warner ruling as an unconditional green light for vertical integration in health care.

The need for change in the U.S. health care system is obvious, but whether vertical integration is the change we need remains to be determined.

The recent federal district court ruling allowing the merger of AT&T and Time Warner — a case of so-called vertical integration — will likely encourage similar unions throughout the U.S. economy, including in health care. Nevertheless, a close look at the court’s decision, and at the wide variety of vertical health care mergers under way, suggests that policymakers and private actors should not interpret the court’s ruling as an unconditional green light for vertical integration in health care, or any other sector.

Vertical integration typically involves the combination of entities operating on different parts of a supply chain in the production of a particular product. Manufacturers of tires, for example, are part of the supply chain that results in a finished automobile. Similarly, ambulatory physician services are sometimes seen as an input on the supply chain of more advanced hospital services. The acquisition of physician practices by hospitals is often characterized as vertical integration.

Some antitrust experts question whether the analogy between manufactured products and health care delivery is accurate. Independent physicians, for example, often work within hospitals and help to produce their “products.” Nevertheless, there are clear differences between mergers across the same types of health care organizations, like hospitals, and those between different types of providers, like physicians and hospitals.

The AT&T/Time Warner case was the first time in 40 years that the government has taken a proposed vertical integration to court, and many commentators have noted that antitrust theory with respect to vertical integration could use some updating. In the meantime, however, Judge Richard Leon’s 172-page opinion seems to have relied on traditional antitrust considerations: would the merger increase or decrease competition, and thereby increase or decrease consumer welfare? His ruling rested heavily on what he viewed as the government’s failure to supply evidence that the merger would have adverse effects. In other words, if the government had produced more convincing data, the ruling could have gone the other way.

Judge Leon’s ruling may be appealed and, if so, may not stand. But if it does, what are its implications for vertical integration in health care? Simply put, the facts matter. And unfortunately, the facts about vertical integration in health care are obscure, and likely to vary enormously according to the details of the merger and from market to market.

Evidence on the effects of horizontal health care mergers has grown considerably in recent years, and generally shows that they increase prices. But studies of vertical health care mergers are much less common. Perhaps the most relevant experience concerns long-standing integrated health systems, such as Kaiser Permanente, Intermountain, Geisinger, and a handful of similar organizations.

Widely regarded as industry leaders in quality and efficiency, these systems seem to demonstrate the benefits of vertical integration: they are able to coordinate services across different types of providers, and, when incentives encourage it, they can easily substitute less expensive services (e.g., ambulatory care) for more expensive ones (e.g., hospital care). However, whether the experiences of these integrated systems are generalizable to the current flock of mergers is unclear. Each of these venerable organizations has a unique history and culture that have shaped its performance over decades.

Studies of vertical integration will have to take into account the type of merger under consideration. The most common type of vertical integration seems to be the acquisition of physician groups — both primary care and specialty — by hospitals. Between 2012 and 2016, the number of hospital-employed U.S. physicians increased from 95,000 to 155,000.

But health care is witnessing a variety of other types of vertical integration. Insurers are buying physician groups, as in the case of UnitedHealth Group’s acquisition of parts of DaVita’s physician network. Drug store chains are buying insurers, as in the case of CVS’s purchase of Aetna. And integrated health systems like Partners HealthCare are proposing to buy insurers like Harvard Pilgrim Health Care.

The effects of these varied mergers will depend on the types of services being combined and the markets affected. From both a societal and legal standpoint, the facts matter.

For example, it turns out that the CVS-Aetna merger includes an important horizontal union between Part D health plans owned independently by CVS and Aetna. Part D health plans provide drug coverage to Medicare beneficiaries. In recent testimony before the California Department of Insurance, economist Richard Scheffler showed that in a number of markets, the merger of these Part D plans would significantly reduce competition, and thereby, could potentially increase the prices of drug coverage for Medicare patients. Fear of consolidation among Part D plans has caused the American Medical Association to oppose CVS’s acquisition of Aetna.

Adding to the uncertainty surrounding these questions is the unique nature of the health market, in which governments are the largest purchasers and consumers often don’t know the prices or value of the products they buy. Traditional competition in local markets sometimes results in radically increasing prices and costs, as providers pile on new technologies and facilities and compete for star physicians in an effort to attract customers. And many parts of health care already have a high degree of consolidation that limits price competition.  The result is a level of dysfunction that has created an almost universal cry for radical disruption of the status quo.

Health care is a conundrum on many levels, and how and whether to regulate vertical integration among its varied components may turn out to be another one. The need for change is obvious. Whether vertical integration is the change we need, and how the courts will treat it, remain to be determined.