Category Archives: Uncategorized

Court complicates Trump’s threat to cut ‘Obamacare’ funds

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , • Leave a comment

https://www.washingtonpost.com/politics/federal_government/trump-on-tricky-legal-ground-with-obamacare-threat/2017/08/01/436cfc8e-771e-11e7-8c17-533c52b2f014_story.html?utm_term=.35d0bd8ec053

Image result for us court of appeals circuits

President Donald Trump’s bold threat to push “Obamacare” into collapse may get harder to carry out after a new court ruling.

The procedural decision late Tuesday by a federal appeals panel in Washington has implications for millions of consumers. The judges said that a group of states can defend the legality of government “cost-sharing” subsidies for copays and deductibles under the Affordable Care Act if the Trump administration decides to stop paying the money.

Trump has been threatening to do just that for months, and he amped up his warnings after the GOP’s drive to repeal and replace “Obamacare” fell apart in the Senate last week. The subsidies help keep premiums in check, but they are under a legal cloud because of a dispute over the wording of the ACA. Trump has speculated that he could force Democrats to make a deal on health care by stopping the payments.

The court’s decision is “a check on the ability of the president to sabotage the Affordable Care Act in one very important way,” said Tim Jost, professor emeritus at Washington and Lee University School of Law in Virginia, a supporter of the ACA who has followed the issue closely.

Because of the ruling, legal experts said, states can now sue if the administration cuts off the subsidies. Also, they said, the president won’t be able to claim he’s merely following the will of a lower court that found Congress had not properly approved the money.

“We’re not going to wait to find out what Donald Trump wants to do,” said California Attorney General Xavier Becerra, who is helping steer the states’ involvement. “My team is ready to defend these subsidies in court.”

The Justice Department had no comment. The White House re-issued an earlier statement saying, “the president is working with his staff and his Cabinet to consider the issues raised by the … payments.”

Trump has made his feelings clear on Twitter. “If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies,” he tweeted early Monday.

He elaborated in an earlier tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies…will end very soon!”

In a twist, the appeals court panel seemed to take such statements into account in granting 17 states and the District of Columbia the ability to intervene on behalf of consumers.

The judges’ decision said states’ doubts that the administration could adequately defend their interests in court were fanned by “accumulating public statements by high-level officials…about a potential change in position.”

“He’s really a terrible client, President Trump is,” University of Michigan law professor Nicholas Bagley said. “The states point to his public statements and say, ‘Are you kidding me? We know the president is poised to throw us under the bus and we know because he said so.’”

The health law requires insurers to help low-income consumers with their copays and deductibles. Nearly 3 in 5 HealthCare.gov customers qualify for the assistance, which can reduce a deductible of $3,500 to several hundred dollars. The annual cost to the government is about $7 billion.

The law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.

Nonetheless, the payments remain under a cloud because of a disagreement over whether they were properly approved in the health law, by providing a congressional “appropriation.”

House Republicans trying to thwart the ACA sued the Obama administration, arguing that the law lacked specific language appropriating the cost-sharing subsidies.

A district court judge agreed with House Republicans, and now the case is before the U.S. appeals court in Washington

If Trump makes good on his threat, experts estimate that premiums for a standard “silver” plan would increase by about 19 percent. And more insurers might decide to leave already shaky markets.

In Congress, some prominent lawmakers in both parties are saying they hope to provide at least a temporary guarantee for the subsidies before open enrollment season for 2018 starts Nov. 1.

California, 16 other states pledge to defend Obamacare subsidies if Trump drops out of lawsuit

Posted on by • Posted in Uncategorized • Tagged , , , , , • Leave a comment

http://www.sacbee.com/news/local/health-and-medicine/article165045532.html

Image result for California, 16 other states pledge to defend Obamacare subsidies if Trump drops out of lawsuit

Now that California, 16 other states and the District of Columbia have been given legal standing in a critical court appeal, California Attorney General Xavier Becerra said Wednesday they will fight to preserve the federal funds that underpin their Obamacare health exchanges if the Trump administration bows out of the lawsuit.

“My team is ready to defend these (federal) subsidies in court,” Becerra said. “We’re going to do everything we can to work with whoever is interested, whether it’s the Trump administration or Congress, to make sure that we continue to provide people with affordable health care. … We’re not going to go back to the days when health care was for the healthy or the wealthy.”

In this legal case, Republicans in the U.S. House of Representatives filed suit in 2014 against then-Secretary of Health and Human Services Sylvia Burwell, asserting that she had overstepped her authority by appropriating billions of dollars to cover discounts that insurers were mandated to give low-income consumers under the Patient Protection and Affordable Care Act, commonly called Obamacare.

While the Affordable Care Act promised reimbursement for the discounts, it provided no mechanism to pay the so-called cost-sharing reductions. Last year, U.S. District Judge Rosemary M. Collyer ruled that, while Congress clearly authorized the program, it had not appropriated funds and thus it was unconstitutional to pay the subsidies. However, she put her decision on hold, pending appeal to the U.S. Court of Appeals for the District of Columbia Circuit.

The dean of the UC Davis School of Law, Kevin R. Johnson, said the states could argue that since Congress mandated the cost-sharing program, that body should be compelled to provide the funding that states and insurers need to make it work.

Becerra, a Democrat who represented the 34th congressional district from 2013 to 2017, said the states would argue that Congress did contemplate the cost-sharing subsidies. “I say that, not only as someone who will argue that in court, I say that as a former member of Congress who helped draft the legislation,” Becerra said.

Becerra said he and other attorneys general filed a motion to join the appeal in May because they thought the president wasn’t going to protect health insurance marketplaces such as Covered California. Before and after the U.S. Senate failed to pass legislation to repeal the Affordable Care Act, Trump has tweeted that he and the Republican leadership should “let Obamacare implode” and then broker a deal.

“You could smell it. You could read it in tweets,” Becerra said. “When we intervened in May, we saw no one was really standing up for the millions of American families that rely upon the Affordable Care Act insurance plans to be able to send their kids to doctors and believe that they could afford to have their child in a hospital. The record is replete with evidence that the Trump administration is not willing to defend the Affordable Care Act.”

The appeals court ruled Tuesday that the states had standing in the lawsuit. Becerra said his office will work in concert with attorneys general in New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Pennsylvania, Vermont, Virginia, and Washington, and the District of Columbia. Ten of the states are led by Democratic governors and seven by Republicans.

Because of ongoing uncertainty about the availability of federal funds, Covered California announced Tuesday that it was planning to impose a surcharge on premiums for those consumers whose copayments and deductibles qualified for the insurer discounts.

While the action sounds ominous for the 650,000 silver-tier policy holders it affects, it is actually a bit of creative accounting that protects them from seeing sharp increases in payments and ensures financial stability for insurers. The health law imposes a cap on out-of-pocket costs for those consumers, whose incomes cannot exceed 250 percent of the federal poverty level. Under the Affordable Care Act, the federal government must pick up costs once consumer spending hits that out-of-pocket ceiling.

The insurers still discount copayments and deductibles on a sliding scale linked to income, and the premiums provide enough funding to cover those discounts on the front end rather than after care is provided.

Peter Lee, executive director of Covered California, has said California will move forward with the plan if an annual appropriation is not made for cost-sharing reductions. All rate changes are subject to state regulatory approval.

“We hope that we do not need to implement this work-around that would cause unnecessary confusion and ultimately cost the federal government more than it would to continue to make the payments directly,” Lee said.

It’s not Obamacare anymore. It’s our national health-care system.

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

https://www.washingtonpost.com/opinions/its-not-obamacare-anymore-its-our-national-health-care-system/2017/07/28/1a6583fe-73d3-11e7-9eac-d56bd5568db8_story.html?_hsenc=p2ANqtz-_10xQ2TJnkCz4MEJsaDnsHXCCw3ER2NJ8zCVrmfYjiPqgmqdP6OWrjVnUOubPP6QShf6CbIdNe4UZ2tz5kzjWXqpTvTQ&_hsmi=54785729&utm_campaign=7.29.17-drewlarry-wpost&utm_content=54785729&utm_medium=email&utm_source=hs_email&utm_term=.b68e51293cb3

Image result for how the obamacare repeal failed in two minutes

Drew Altman is president and chief executive of the Henry J. Kaiser Family Foundation. Larry Levitt is senior vice president of the Kaiser Foundation.

Republicans failed to repeal and replace the Affordable Care Act early Friday because of divisions within their own ranks, and because they tried not only to repeal and replace the ACA but also to cut and cap the Medicaid program, generating opposition from many red-state governors and their senators.

But most of all, they failed because they built their various plans on the false claim — busted by the Congressional Budget Office — that they could maintain the same coverage levels as the ACA and lower premiums and deductibles, while at the same time slashing about a trillion dollars from Medicaid and ACA subsidies and softening the ACA’s consumer protection regulations. Had they succeeded, they would have won a big short-term victory with their base, which strongly supports repeal, but suffered the consequences in subsequent elections as the same voters lost coverage or were hit with higher premiums and deductibles.

The challenge now is to stabilize the ACA’s insurance marketplaces. They are not in free fall or imploding, as President Trump suggests, and in most markets insurer profits have been improving. But these are fragile markets, especially in rural areas, and there are 38 “bare counties” where no insurer currently intends to participate in 2018. About 20 percent of marketplace enrollees have access to only one insurer, with the biggest problems in rural areas.

Senate Republicans failed to pass their ‘skinny bill’ that would repeal parts of the Affordable Care Act on July 28. Three republicans, including Sen. John McCain (R-Ariz.), voted against the bill. (Video: Amber Ferguson/Photo: Melina Mara/The Washington Post)

Insurers have submitted their initial rates to state regulators for 2018, and in some areas, the increases are steep. These companies are hedging their bets in the face of uncertainty emanating from Washington, and who can blame them? Now, with ambiguity over legislative action to repeal and replace the law lifted, the remaining uncertainty is whether Congress and the administration will take steps to stabilize markets or instead undermine them.

The immediate question is whether the administration will implement the law as intended or, in a sense, enact “skinny repeal” through administrative action. To stabilize the marketplaces, the administration would need to enforce the individual mandate as intended, commit to providing payments to insurers that compensate for reducing cost-sharing for low-income enrollees, and continue to provide outreach funds to support enrollment and consumer education activities.

Insurers need to finalize their 2018 rates soon and sign contracts with the federal marketplace by the end of September, so clarity on the $7 billion in cost-sharing payments to insurers is key. If they’re not made, insurers will need to raise premiums by about 19 percent, or they might just decide to exit the market entirely. These payments are subject to a lawsuit filed the House, so Congress might need to step in and assure that the payments will continue.

It is unclear whether Republicans and Democrats can work together on narrow legislation to stabilize the marketplaces without once again opening up a broader debate about the ACA. Republican bills included significant federal funds to help insurers cover the cost of high-risk patients, an idea that was also part of the ACA for its first three years of implementation. These reinsurance or risk-sharing pools would bring premiums down, especially for middle-class consumers not eligible for tax credits in the marketplaces, a primary goal for both parties.

Conservatives may be resistant to such spending, so Congress might also consider ideas they advocated in the recent debate, such as allowing premiums to be paid from health savings accounts. This, too, would provide premium relief to middle-class people buying their own insurance.

Still, only 7 percent of the American people get their insurance through the individual market. Finding consensus on the narrow issue of stabilizing this slice of the health insurance system should be possible if the larger, partisan debate about Obamacare is truly over.

It is also possible as the smoke clears on the health-care battlefield that more states will want to move forward with Medicaid expansions, now that federal funding for those expansions appears secure. Red states will likely seek a conservative stamp on their expansions, adding elements such as work requirements, drug testing, premium payments, time limits or testing private insurance models. Some of these policies will be controversial, and others may stretch what’s allowed under federal law too far. But some wrinkles will no doubt be necessary if Medicaid is to be expanded to the millions of people in the 19 holdout states.

But one thing is clear: 59 percent of the public says President Trump and the Republicans are now in control of government and are responsible for making the ACA work, and 74 percent says they should “do what they can to make the law work.”

It’s apparent what needs to be done to stabilize the marketplaces and who owns the ACA going forward. It’s no longer Obamacare; it’s now just the nation’s health insurance system.

CHS expects $137M net loss in Q2, says divestitures will continue

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

http://www.beckershospitalreview.com/finance/chs-expects-137m-net-loss-in-q2-says-divestitures-will-continue.html

Image result for all that glitters is not gold

Franklin, Tenn.-based Community Health Systems ended the second quarter of 2017 with a net loss of $137 million, marking the fifth consecutive quarter the company has posted a loss, according to a preliminary earnings statement released Wednesday.

CHS recorded revenues of $4.14 billion in the second quarter of this year, down 9.7 percent from revenues of $4.59 billion in the same period of 2016. The drop was attributable, in part, to lower patient volumes. Total admissions were down 10.8 percent in the second quarter of 2017 compared to the same quarter of last year. On a same-facility basis, admissions were down 2.5 percent year over year.

In addition to a drop in patient volume, CHS said the lower than anticipated results in the second quarter were attributable to higher expenses related to purchased services, medical specialist fees and information systems. The company’s financial results also included one-time expenses related to its hospital divestitures.

The company ended the period with an operating loss of $131 million. That’s compared to the $1.43 billion operating loss CHS reported in the second quarter of 2016, when it recorded a noncash impairment charge of $1.4 billion.

To improve its finances and reduce its nearly $15 billion debt load, CHS put a turnaround plan into place last year. As part of the plan, the company announced earlier this year that it intended to sell off 30 hospitals.

CHS completed the sale of nine hospitals on June 30 and July 1, bringing its total completed divestitures to 20 out of the 30 it intends to sell off. The company said it expects to complete the divestiture of the remaining 10 hospitals by Sept. 30.

In its preliminary earnings release, CHS said it plans to continue to unload more hospitals.

“In addition to the previously announced divestiture of 30 hospitals, the company continues to receive interest from acquirers for certain of its hospitals. The company is pursuing this interest for sale transactions involving hospitals with a combined total of at least $1.5 billion in annual net revenue and combined mid-single digit adjusted EBITDA margins,” CHS said.

CHS will release its formal numbers for the second quarter and the first half of 2017 on Aug. 1.

Amazon reportedly launched a secret healthcare team called 1492

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

http://www.beckershospitalreview.com/healthcare-information-technology/amazon-reportedly-launched-a-secret-healthcare-team-called-1492.html

Image result for 1492

Amazon reportedly has a secret healthcare team exploring new technology opportunities in healthcare, including both hardware and software projects, according to CNBC.

The experimental lab is headquartered in Seattle and named 1492, two sources familiar with the matter told CNBC. Its team of researchers is looking at ways to extract data from legacy EHRs to make that information available to patients and their physicians.

The group is also reportedly exploring building a platform for telemedicine and health applications on Amazon hardware, including its Echo and Dash Wand. The sources said it was not clear whether Amazon is developing any new health devices, but they would not rule it out.

Some team members, like project lead Cameron Charles, PhD, list their affiliation with the 1492 project on LinkedIn under the keyword “A1.492.”

“I can’t say anything about what we’re working on, but we’re hiring,” reads Dr. Charles’ profile.

The CNBC report follows other projects suggesting Amazon’s move into the healthcare industry, including the company’s reported hiring of Box executive Missy Krasner and its attempts to expand into the drug and medical supply distribution sector.

Amazon did not immediately respond to CNBC’s request for comment.

CMS moves forward with $43B in DSH payment cuts

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

http://www.beckershospitalreview.com/finance/cms-moves-forward-with-43b-in-dsh-payment-cuts.html

Image result for cutting currency

CMS issued a proposed rule Thursday that lays out a methodology for implementing cuts to Medicaid Disproportionate Share Hospital allotments under the ACA beginning in fiscal year 2018.

With the expectation of lower uninsured rates and lower levels of hospital uncompensated care, the ACA adjusted the amounts of funding available to states under the Medicaid program for hospitals that serve a disproportionate share of low-income patients. The ACA calls for aggregate reductions to Medicaid DSH payments annually from FY 2014 through FY 2020. Subsequent legislation delayed the start of the reductions until FY 2018 and pushed the end date back to FY 2025.

Medicaid DSH allotments are slated to be reduced by $2 billion in FY 2018. The reductions will grow by $1 billion per year through FY 2024, when payments will be cut by $8 billion. DSH allotments will be reduced by another $8 billion in FY 2025.

CMS proposed a methodology that would account for new data sources, some of which were unavailable during prior rulemaking. Those sources include DSH Medicaid Inpatient Utilization Rate data, U.S. Census Bureau data and existing state DSH allotments. “We are proposing to utilize the most recent year available for all data sources and are proposing to align data sources whenever possible,” said CMS.

The proposed methodology would help ensure DSH payments reach hospitals with the most need for financial assistance due to high volumes of Medicaid inpatients and high levels of uncompensated care, according to CMS.

CMS will accept comments on the proposed rule until Aug. 28 at 5:00 p.m.

Scripps CEO Chris Van Gorder responds to healthcare vote

Posted on by • Posted in Uncategorized • Tagged , , , , • Leave a comment

http://www.beckershospitalreview.com/hospital-management-administration/scripps-ceo-chris-van-gorder-responds-to-healthcare-vote.html

Image result for chris van gorder

When Sen. John McCain, R-Ariz., cast his decisive vote Thursday night to stall GOP efforts to repeal the ACA, Chris Van Gorder, president and CEO of San Diego-based Scripps Health, took it not as a rejection of specific policies but instead a rejection of partisan politics.

In a written statement, Mr. Van Gorder emphasized that while healthcare has been subject to divisive political rhetoric during recent reform efforts, it is vital not to lose sight of the actual goal of healthcare professionals — to provide patients with quality care.

“The health care vote in Washington is important, but not as important as what we do every day and ensuring we’re able to do it,” says Mr. Van Gorder. “For now at least, the ACA will continue with its current provisions for care delivery. Despite its challenges with reduced reimbursements, this will provide us some increased stability as we plan for the future.”

Mr. Van Gorder points out that the political process is vital to deciding how care is paid for and delivered, and he encourages politicians to work across the aisle to craft legislation that provides Americans with robust coverage.

“That said, when it comes to health care legislation, representatives from both parties agree the ACA needs to be changed. But any healthcare bill passed unilaterally by one party — whether it’s the ACA in 2010 or repeal/replace in 2017 — will not stand the test of time,” said Mr. Van Gorder. “Something as complex, life changing and personal as healthcare deserves thoughtful consideration and debate and a true dialogue with those on the front lines of health care delivery.”

More examples of what not to do AKA how to stay in the frying pan and not fall into the fire.

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , • Leave a comment

More examples of what not to do AKA how to stay in the frying pan and not fall into the fire.

Image result for interimcfo.wordpress.com

This is the second article in the series about what not to do.  The person suggesting this article asked for examples of things that might help you save yourself from yourself.  Please send me your examples and stories of things not to do.  Your confidentiality will be protected unless you want credit for the idea.  Sharing this experience, especially with younger executives is one of the best ways to serve the industry.  I have an outline of a third article and depending upon response, I could probably keep this going for a while since like a consultant friend of mine used to say, “One idiot can keep three consultants busy forever.”

Project planning

Ben Franklin’s adage goes, “Failing to plan is planning to fail.”  I have found this profound simple statement to be true time and again.

After being appointed interim CFO in a hospital, I learned that there was a major construction project under way.  The project and the rate at which the hospital was burning money on the project did not make sense to me.  To make a long, complicated story short, no one could produce a feasibility study to support the project’s value proposition or pro-forma analysis to support the project’s underlying  financing.  When no one could produce a sources and uses of funds analysis, I spent a couple of weeks creating my own from scratch.  When I was finished, it was clear that the project was underfunded by over $20 million and the hospital did not have sufficient reserves to cover the shortfall.  When this information was provided to the Board, after they recovered from the shock and horror, they decided to stop the project that would have resulted in a default in the bonds by drawing reserves below bond covenant minimum requirements triggering a technical default.  The entire organization was oblivious to this looming disaster.

Ole Abe said that, “You should spend twice as much time sharpening your axe as you spend cutting with it.”  The implication of this admonition is obvious to anyone that has ever cut wood with an axe.  Still and yet, executives let distractions and competition for their time lead them to allow ill-conceived initiatives to go forward then they are surprised when the projects blow up on them.  If you want to entertain yourself, pick any executive out at a cocktail party and ask them if they have ever seen a project go bad.  The war stories you will hear are spectacular. Better yet, ask the ‘expert’ if they have ever seen a peer do something stupid.  Apparently, they have not heard or have disregarded the advice of Einstein, “Doing the same thing and expecting a different outcome is the beginning of insanity.”

Project control

Oh boy!  The easy part of a project is the planing and approval.  The hard part is execution.  There are a lot of challenges with project execution.  One is that other unanticipated confounding priorities arise in the organization that bleed capacity from the organization’s leadership to remain focused on a critical project.  Another commonly seen problem with project execution is the loss of key leaders during the course of the project.  All too frequently, critical assumptions underlying the project’s rationalization are proven inaccurate or incomplete once execution begins.  Sometimes, a project’s success is largely dependent upon one person and if that person leaves or is incapacitated, the entire project goes into jeopardy.

To some degree, a project is analogous to a marriage.  In order for it to succeed, more than 100% commitment is required from all sides.  Every effort you make to manage your risk can be thwarted by uncontrollable changes in your business partner(s).  There is no guarantee that the people that sold a deal and made commitments on behalf of your business partner will be around to honor those commitments.  If they made commitments that were not in the contract, they may not be allowed to honor them.  More than once before a project was completed, I have found myself dealing with an entirely different cast of characters.  What about a business partner that gets acquired during implementation and none of the commitments made before the acquisition are honored?  A business failure or overcommitment by a business partner can move into your life like bad in-laws.  This is why business partner selection is so important.  Too often, a decision maker will chose a business partner based on cost alone and in the process buy himself a set of problems that turn out to be exponentially more expensive than the most expensive option that was under consideration at the time the decision was made.

A project does not have to fail to become a disaster.  Delays in a project can be as damaging.  I do not know of a delayed project that resulted in a better outcome.  Sometimes, delays cause cascading problems.  Take a construction project for example where the electrical contractor is contracted to start on a date certain and the project is not far along enough for them to begin work.  This kind of a delay can rapidly spread throughout an organization and create enough problems to overwhelm the ability of the leadership team to address them.  This is the reason you were required to study PERT in school.  How often do you see it applied in practice?

If a mistake is to be made in project management, it should be biased in favor of overcompensation for potential problems.  I am regularly criticized for being too conservative and too hard on pro-forma analysis assumptions. Never the less, time after time I see projected revenues and time lines being overstated and projected expenses understated.

Waiting too long to intervene

I have watched executives demur from engaging an issue in hopes that it would go away.  I have rarely seen this strategy work.  More often than not, a problem in an organization will get worse the longer intervention is delayed.  There are a lot of reasons that this occurs not the least of which is that addressing operational problems most often involves dealing with a personnel problem.  I do not know many executives that enjoy taking on a personnel problem.  Vince Lombardi said, “Hope is not a strategy.”  Failing or refusing to intervene can allow a problem to become exponentially more damaging until it reaches the point that the organization’s financial statements are impacted.  Time and again as an interim, I have been asked, why it was going to take so long and cost so much to address a problem?  I have seen ten or more interim executives committed to address what had been allowed to become a major business problem on more than one occasion.  My answer to this question is always the same.  Cutting costs after an organization finally decides to address a problem only prolongs the time and cost necessary for the mitigation.  All too frequently, organizations create a problem by under-resourcing an area or initiative.  When this leads to a melt-down, the leaders charged with the mitigation are frequently frustrated by the cost and time associated with fixing the resulting mess.  Sometimes, I have to tell them for their future reference that the cost associated with keeping a process or function under control is always a small fraction of the time and resources necessary to straighten it out after it goes catawaumpus.  Every executive I know can relate one or more horror stories to prove this point.  More often than not, the fiasco is related to an I/T implementation where the costs and operational consequences associated with a failed project can exceed the original budgeted cost of the project.

Fire fighters are known for over-commiting resources to a fire.  This strategy is designed to err on the side of having more resource than is needed to address the fire as opposed to running the risk that a growing fire will overwhelm the resources that are available on site.  Once, I asked an interim CEO how it was going relatively early into his engagement in a very troubled large hospital.  His answer that I have never forgotten was, “The platform is on fire.”  A platform is like a ship.  When it catches fire, getting off is rarely an option.  You must fight the fire where it is and failure is not an option.  Remember the USS Forestall?  Skimping on resources when dealing with a problem like this can lead to figurative death in the form of an unplanned career transition.  A business problem is analogous to a fire in the organization.  If you are going to make a mistake addressing a problem, your personal risk will be much lower if you respond aggressively to a problem and err on the side of over-commiting resources until the problem is resolved and the situation stabalized.  The alternative is a potential conflagration.

Non-evidence based decisions

The mantra of UAB’s Doctorate of Administration in Health Sciences program is, “Evidence based practice in Healthcare Administration.”  I have commented before on what appears to be a paradox in healthcare.  On the clinical side, most of what is done is based on evidence gained from objective, peer reviewed research.  The purpose of the research is to yield better outcomes and safer facilities for patient care.  In the administrative suites of too many healthcare organizations, decisions are routinely made based on seat-of-the-pants hunches, little or no analysis, ridiculous assumptions, no assumptions, flawed analysis, systematic ignorance or reckless disregard of applicable evidence and research.  More often than not, harried administrators do not even bother to see if any applicable research is available.  In other cases, decisions are made for political expediency or to appease Dr. Huff-and-Puff.  I got into trouble in a Catholic hospital for suggesting the leadership team’s decision making ranged from magic eight ball to Ouija board.  I now keep a magic eight ball on my desk as a reminder to not fall into this trap.  It is funny to have younger people ask me what the magic eight ball is. They’re not old enough in some cases to have ever heard of the magic eight ball and they are fascinated to see how it works. It is a wonder some organizations get along as well as they do.

Indecisiveness
I was perusing novelty signs in a gift shop in Indiana when a sign captured my attention.  It said, “Decision making around here is like a squirrel crossing the road.”  Indecisiveness can be dangerous when it is practiced in the front office.  At its least, indecisiveness can lead to project and initiave delays.  At worst, it can wreck not only projects but the credibility of executives with their Boards.  There’s a one liner that says, “The road to failure is littered with run over squirrels.”  In an earlier article I said, “If you are a decision maker, make a decision.”  Not making a decision is making a decision.
As before, I would like to thank Dr. Christy Lemak Professor and Chair of the UAB Department of Health Services Administration for the inspiration or should I say assignment that resulted in this article. I am looking forward to seeing my grade.
Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.
The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link that usually appears as a bubble near the bottom this web page.
There is a comment section at the bottom of each blog page.  Please provide input and feedback that will help me to improve the quality of this work.
This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.
If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

What Could Happen If The Administration Stops Cost-Sharing Reduction Payments To Insurers?

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

http://healthaffairs.org/blog/2017/08/02/what-could-happen-if-the-administration-stops-cost-sharing-reduction-payments-to-insurers/

Image result for us court of appeals

Although the decision of the Court of Appeals for the District of Columbia Circuit to allow attorneys general from 17 states and the District of Columbia to join the House v. Price cost-sharing reduction (CSR) litigation as parties complicates President Trump’s ability to simply stop the CSR payments, rumors continue that he is preparing to do so. The CSR payments are made monthly; the next installment is due on August 21, 2017. If the administration intends not to make the August payment, it must announce its decision soon.

Changes to qualified health plan (QHP) applications in the federally facilitated exchange (FFE) are due on August 16, 2017, as are final rates for single risk pool plans including QHPs. Final contracts with insurers for providing QHP coverage through the FFE must be signed by September 27. If the Trump administration is going to defund the CSRs, now is the time it will do it.

The back story on the CSR issue can be found in my post on July 31, while the intervention decision is analyzed in my post on August 1. This post focuses on issues that will need to be resolved going forward if the Trump administration decides to defund the CSRs.

The Choices Insurers Would Face If CSR Payments Were Ended

First, insurers would have to decide whether to continue to participate in the exchanges. Those in the FFE have a contractual right to drop participation for the rest of 2017, but how exactly they would do this would depend on state law, and would probably require 90 days notice. Insurers would also not be able to terminate the policies of individuals covered through the exchange, although once the insurers left the exchange premium tax credits would cease and many policyholders would drop coverage. Insurers that tried to leave immediately would likely suffer reputational damage, and those that could financially would likely try to hold on until the end of the year.

Some insurers might well decide that the government is an unreliable partner and give up on the exchanges for 2018. Indeed, some would conclude that the individual market is too risky to play in at all. The individual market makes up a small part of the business of large insurers; even though it has become more profitable in the recent past, some insurers might conclude that the premium increases that would be needed to make up for the loss of the CSRs would drive healthy enrollees out of the individual market. Rather than deal with a deteriorating risk pool, they might leave the individual market entirely (although they would probably have to give 180 days notice to do so.)

Insurers that decide to stay would have to charge rates that would allow them to survive without the $10 billion dollars the CSR payments would provide. They would need to raise premiums significantly to accomplish this. How they did so would depend on guidance that they got from their state department of insurance or possibly from the Centers for Medicare and Medicaid Services.

The California Experience

On August 1, 2017, Covered California announced its 2018 rates. The California state-based marketplace is an example of how the Affordable Care Act can work in a state that fully supports it and has a big enough market to form a balanced risk pool. For 2018, the average weighted rate increase in California is 12.5 percent, of which 2.8 percent is attributable to the end of the moratorium on the federal health insurance tax. Consumers can switch to plans that will limit their rate change to 3.3 percent in the same metal tier. All 11 health insurers in California are returning to the market for 2018 (although one insurer, Anthem, is leaving 16 of the 19 regions in which it participated for 2017) and 82 percent of consumers will be able to choose between three or more insurers. About 83 percent of hospitals in California participate in at least one plan.

Covered California instructed its insurers to file alternate rates that would go into effect if the Trump administration abandons the CSR payments. The insurers were instructed to load the extra cost onto their silver (70 percent actuarial value) plans, since the CSRs only apply to silver plans. The alternative rates filed by the insurers project that if the CSRs are not funded, they would have to essentially double their premium increases, hiking premiums by an additional 12.4 percent.

Virtually all of this increase would be absorbed by increased federal premium tax credits for those with incomes below 400 percent of the federal poverty level. As the premium of the benchmark second-lowest cost silver plan increased, so would the tax credits. A Covered California study concluded that the premium tax credit subsidy in California would increase by about a third if the CSR subsidies are defunded.

Bronze, gold, and platinum plan premiums would not be affected by the silver plan load. As the premium tax credits increased, many more enrollees might be able to get bronze plans for free, and gold plans would become competitive with silver plans in price. More people would likely be eligible for premium tax credits as people higher up the income scale found that premiums cost a higher percentage of their household income.

Consumers who are not eligible for premium tax credits would have to pay the full premium increase themselves. Covered California has suggested, however, that insurers load the premium increase only onto silver plans in the exchange, since CSRs are only available in the exchange. Insurers would likely encourage their enrollees who are in silver plans in the exchange to move to similar products off the exchange that are much more affordable. Bronze, gold, and platinum plans would cost more or less the same on or off the exchange.

Other States Would Likely Make Different Choices Than California’s

It is likely that not all states would follow California’s lead. If state departments of insurance do not allow insurers to increase their premiums, more insurers would leave the individual market. If state departments require insurers to load the CSR surcharge onto all metal-level plans, both on and off the exchange, bronze, gold, and platinum plans would be more expensive and individual insurance would become much more costly for all consumers who are not eligible for premium tax credits. If insurers leave the market or consumers drop coverage, more consumers would end up using care they cannot afford, increasing medical debt and the uncompensated care burden of providers, and of hospitals in particular.

Some insurers in other states have likely already loaded a substantial surcharge onto their 2018 premiums in anticipation of CSR defunding and of other problems, such as uncertainty about the Trump administration enforcing the individual mandate. If insurers in fact profit from excessive rates, consumers might eventually receive medical loss ratio rebates, but 2018 rebates would not be paid out until late in 2019, if the requirement is still on the books by then.

Other Ramifications Of Ending CSR Payments To Insurers

CSR defunding could have other effects as well. Insurers have been reimbursed each month for CSRs based on an estimation of what they are paying out to actually reduce cost sharing. Each year the insurers must reconcile the payments they have received with those they were actually due. Insurers were supposed to have filed their reconciliation data for 2016 by June 2, 2017, and were supposed to be paid any funds due them, or to refund overpayments, in August. Reconciliation payments may also be due in some situations for 2015. If the administration cuts off CSR payments, it could conceivably cut off reconciliation payments as well.

Finally, defunding of CSRs would likely have an effect on risk adjustment payments as well. The risk adjustment methodology has been set for 2018 in the 2018 payment rule. It would likely not be amended for 2018 in light of the CSR defunding. Defunding would increase the statewide average premium on which risk adjustment payments are based. This would generally exaggerate the effects that risk adjustment would otherwise have. In particular, insurers with heavy bronze plan enrollment would end up paying more in, while insurers with more gold or platinum plans might receive higher payments.

Looking Forward

President Trump claims to see the CSR payments as a “bailout” to insurers, which surely they are not. They are a payment for services rendered, much like a Medicare payment to a Medicare Advantage plan. The effects of defunding would reverberate throughout out health care system, likely causing problems far beyond those identified in this post.

Fortunately, Senators Alexander (R-TN) and Murray (D-WA), the chair and ranking member of the Health, Education, Labor, and Pensions Committee, have announced that they will begin hearings on a bipartisan approach to health reform when the Senate returns in September, and funding of the CSR payments for at least a year seems to be at the top of their list. A bipartisan group of House members has also called for funding the CSRs. And pressure to fund the CSRs continues from the outside, with the National Association of Insurance Commissioners calling for it again last week. It is to be hoped that President Trump will not take steps that would sabotage the individual market and that a solution can quickly be found to the CSR issue that will bring stability to the market going forward.

 

MinnesotaCare Buy-In: Maybe Not A Long Shot

Posted on by • Posted in Uncategorized • Tagged , , , , , • Leave a comment

http://healthaffairs.org/blog/2017/08/02/minnesotacare-buy-in-maybe-not-a-long-shot/

Capitol Building St Paul Minnesota

States are developing creative policy options to address the high cost of premiums for those purchasing coverage in the individual market. Given the inaction and lack of leadership at the federal level, states need to continue to move forward. Minnesota, of course, is leading the way.

Under a proposal introduced in the Minnesota state legislature earlier this year, Minnesotans shopping for health insurance on the individual market would have been able to purchase public coverage through MinnesotaCare, Minnesota’s Basic Health Plan (BHP). The public buy-in was supported by the Democratic-Farmer-Labor (DFL) Party Governor Mark Dayton and introduced by key DFL legislators (Senator Tony Lourey and Representative Clark Johnson), but it was not seriously considered by the Republican-controlled legislature.

Nevada’s Democratic state legislature also passed a Medicaid Buy-In bill which was subsequently vetoed by Republican Governor, Brian Sandoval. The Nevada Care Plan would have allowed Nevada’s uninsured to buy into Nevada’s Medicaid program, a current Medicaid expansion state. The buy-in plan would have been offered on the Health Insurance Marketplace, Nevada Health Link, and income-eligible applicants would access federal advanced premium tax credits (APTCs). These latter provisions were contingent on approval of a 1332 State Innovation Waiver.

These state buy-in proposals are really not too far out of the mainstream of viable policy options. Over the years, public program buy-ins have been used to target specific populations whose incomes fall just above program eligibility guidelines and where health insurance coverage is considered essential. Below, I present a few of these programs to highlight the well-established use of public buy-in programs to achieve state coverage goals. I also include additional detail on Minnesota’s public buy-in proposal and encourage additional discussion and debate about these and other state options to secure access to affordable coverage for all.

Medicaid Buy-In For People With Disabilities And Children

Most states already have at least one Medicaid buy-in program tailored specifically to the needs of people with disabilities. Medicaid allows states to offer coverage to adults with disabilities who earn more than would otherwise be allowed in order to keep their Medicaid coverage. The policy goal of the program was to provide opportunities for those with disabilities to work and retain their health insurance coverage. It allows the disabled to work in jobs that may not provide health insurance coverage, including part-time work, low-wage positions, and intermittent employment. Participants pay premiums based on a sliding fee scale, and states receive federal matching payments to help offset the costs of the program. As of December 2011, 44 states have implemented this program.

Similarly, the Family Opportunity Act of 2005 provides federal matching payments to states that offer Medicaid Buy-In coverage to children with disabilities and incomes below 300 percent of the federal poverty level (FPL). This bill was initially introduced by Representative Pete Sessions (R-Texas) in 2003 to honor a young child born with Down syndrome and a severe heart defect. The family was deemed ineligible for public coverage when the father accepted a bonus at work, raising his income above the eligibility levels. The goal of this Medicaid Buy-In option was to protect families from the need to become impoverished in order to receive Medicaid-covered services for their child with disabilities. To date, five states have implemented this program: Colorado, Iowa, Louisiana, North Dakota, and Texas.

Several states also use state funds only (i.e., no federal match) to allow families to buy-in to Children’s Health Insurance Program (CHIP) coverage. For example, Maine provides a Full Cost Purchase Option for Children under 19 Years of Age for families with incomes between 140 and 213 percent FPL and charges premiums on a sliding scale. Until 2014, New Jersey also offered a CHIP Buy-In for children with family incomes above 350 percent FPL who were not eligible for the subsidized New Jersey FamilyCare coverage.

Minnesota’s Public Buy-In: The Details

The drafters of the MinnesotaCare Buy-In thought through many of the details of how a public buy-in program would work. MinnesotaCare would offer two plans on Minnesota’s Health Insurance Marketplace, MNsure—a Silver plan that covers 70 percent of health care expenses—and a Gold plan that would cover 80 percent (i.e., 30 percent and 20 percent consumer cost sharing, respectively). Enrollees would pay the full cost of the premiums, so there would be no ongoing cost to the state after the program is set up.

If a federal 1332 State Innovation Waiver were secured, Minnesotans who purchase coverage through the public buy-in option would be eligible for federal premium tax credits offered through MNsure. Each health plan that currently contracts with the state of Minnesota to provide managed care services for Medicaid and the BHP would be required to offer at least one buy-in product on MNsure — either through its existing managed care contract or through a Medicaid Accountable Care Organization.

How The Public Buy-In Option Would Help In Minnesota

Key benefits of the MinnesotaCare buy-in include a lower-cost coverage option to compete with private plans on the Marketplace and increased access to coverage, particularly for areas with limited or no plan options. The buy-in would provide access to the broad network of physicians and care providers that are available through MinnesotaCare, ensuring that people could keep their local doctors and hospitals.

The concerns raised by health plans is that the low-cost public MinnesotaCare Buy-In would edge them out of the market with its significantly lower rates achieved through paying providers at the lower Medicaid payment rate. If everyone was allowed to purchase the buy-in plan, most would chose the lowest-cost plan. Private plans worry about being priced out of some markets completely through an unfair competitive advantage. Providers worry about the low Medicaid provider rates with additional concern about the willingness of providers to accept Medicaid enrollees or at least new enrollees.

Yet, given the uncertainty of health reform activity at the federal level, there is a real possibility that non-metro areas in Minnesota as well as in other states, now estimated at 38 of the 3,000 counties, will go without any health plan option in the non-group market. The buy-in plan could be limited to rating areas with one or fewer plan offerings and/or targeted to families where premiums exceeded more than 9 percent of their income (i.e., the current limit for federal tax credits). To encourage provider support and participation, the Minnesota legislation included a provision that for buy-in enrollees, providers would be paid 100 percent of Medicare payment rates.

Public Buy-In, Other Creative Solutions Must Be On The Table

State policy analysts have learned with the implementation of the Affordable Care Act that a one-size-fits-all policy did not work for states. Targeted and creative solutions, including a public program buy-in, should be considered in an effort to ensure affordable and accessible coverage. Waiting for Washington to act becomes a less viable strategy daily — states must develop innovative policy strategies of their own that align with their policy objectives and their unique health insurance markets. Minnesota is well situated to move forward with one such strategy by putting the MinnesotaCare buy-in back on the table and giving it a full opportunity for public debate.