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6 California urgent care centers file for bankruptcy

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http://www.beckershospitalreview.com/finance/6-california-urgent-care-centers-file-for-bankruptcy.html

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Six urgent care centers in Southern California filed for Chapter 11 bankruptcy Wednesday, according to The Orange County Register.

The bankruptcy case includes the following six facilities:

  • Cypress (Calif.) Urgent Care
  • Hoag Urgent Care-Anaheim (Calif.) Hills
  • Hoag Urgent Care-Huntington Harbour (Huntington Beach, Calif.)
  • Hoag Urgent Care-Orange (Calif.)
  • Hoag Urgent Care-Tustin (Calif.)
  • Laguna Dana Urgent Care (Dana Point, Calif.)

Robert C. Amster, MD owns the facilities. He is the founder of Your Neighborhood Urgent Care, which includes a network of 10 urgent care centers in Southern California.

Four of the urgent care facilities that entered bankruptcy are leased from Hoag Memorial Hospital Presbyterian in Newport Beach, Calif.

Dr. Amster’s attorney, Ashley McDow, told The OC Register the bankruptcy will help “restructure our affairs with the landlord and the bank.”

Hoag Urgent Care-Orange closed in 2016. The other five urgent care centers are expected to remain open and conduct business as normal during the bankruptcy case, according to the report.

What’s the Near-Term Outlook for the Affordable Care Act?

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If Congress abandons efforts to repeal and replace the Affordable Care Act (ACA), President Trump has said he would “let Obamacare fail.” This Q&A examines what could happen if the Affordable Care Act, also called “Obamacare,” remains the law and what it might mean to let Obamacare fail.

Is Obamacare failing?

The Affordable Care Act was a major piece of legislation that affects virtually all payers in the U.S. health system, including Medicaid, Medicare, employer-sponsored insurance, and coverage people buy on their own. One of the biggest changes under the health reform law was the expansion of the Medicaid program, which now covers nearly 75 million people, about 14 million of whom are signed up under the expansion. Most Americans, including most Republicans, believe the Medicaid program is working well.

When people talk about the idea of the ACA failing, they are usually referring to the exchange markets, also called Marketplaces. These markets, which first opened in 2014, are part of the broader individual insurance market where just 5-7% of the U.S. population gets their insurance. People who get insurance from other sources like their work or Medicaid are not directly affected by what happens in the individual insurance market.

The exchange markets have not been without problems: There have been some notable exits by insurance companies and premium increases going into 2017, and in the early years of the exchanges, insurers were losing money. The structure of the ACA’s premium subsidies – which rise along with premiums and cap what consumers have to pay for a benchmark plans a percentage of their income – prevents the market from deteriorating into a “death spiral.” However, premiums could become unaffordable in some parts of the country for people with incomes in excess of 400% of the poverty level, who are ineligible for premium assistance.

Insurer participation in this market has received a great deal of attention, as about 1 in 3 counties – primarily rural areas – have only one insurer on exchange. Rural counties have historically had limited competition even before the ACA, but data now available because of the Affordable Care Act brings the urban/rural divide into sharper focus. On average at the state level, competition in the individual market has been relatively stable – neither improving nor worsening.

Premiums in the reformed individual market started out relatively low and remained low in the first few years – about 12% lower than the Congressional Budget Office had projected as of 2016 –before increasing more rapidly in 2017. Most (83%) of the 12 million people buying their own coverage on the exchange receive subsidies and therefore are not as affected by the premium increases, but many of the approximately 9 million people buying off-exchange may have difficulty affording coverage, despite having higher incomes. As might be expected, after taking into account financial assistance and protections for people with pre-existing conditions, some people ended up paying more and others paying less than they did before the ACA. Our early polling in this market found that people in this market were nearly evenly split between paying more and paying less. About 3 millionpeople who remain uninsured are not eligible for assistance or employer coverage and many of them may be going without coverage due to costs.

Our recent analysis of first quarter 2017 insurer financial results finds that the market is not showing signs of collapse. Rather, insurers are on track to be profitable and the market appears to be stabilizing in the country overall. In other words, those premium increases going into 2017 may have been enough to make the market stable without discouraging too many healthy people from signing up. However, there are still markets – particularly rural ones – that are fragile.

Red October: CMS Details Process for Billions in DSH Cuts

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With Congressional delays in Medicaid disproportionate share funding cuts set to expire Sept. 30, CMS issues a proposed rule that details billions in reductions that will begin in 2018.

As the Senate tries repeatedly to repeal the Affordable Care Act, so far without success, CMS is moving ahead with detailing how cuts in disproportionate share funding will be administered under a political deal the hospital lobby agreed to in exchange for getting more people covered by health insurance under the ACA.

The first step of the DSH cuts, which were supposed to have been implemented in stair-step fashion beginning in 2014 and running through 2020, had been delayed by Congress until 2018 after hospitals successfully argued that uncompensated care costs weren’t declining as much as expected under the ACA.

The cuts will now begin in 2018 with $2 billion, with $1 billion in cuts added each year until 2024, when DSH payments will be cut by $8 billion. Another $8 billion in cuts is scheduled for 2025.

Cuts will total $43 billion over the eight years.

The proposed rule lays out the DSH Health Reform Methodology (DHRM) that will be used to implement DSH funding reductions by state, in an attempt to target more heavily hospitals that experience the least financial impact from uncompensated care.

The DHRM will incorporate several sources of data to determine the amount by which each state’s DSH funding will be reduced for each year, in an attempt to account for a variety of factors that influence the financial impact of uncompensated care burdens in each state.

The methodology must, according to CMS “impose a smaller percentage reduction on low-DSH states.”

The largest reductions will be imposed on states with the lowest percentage of uninsured during the most recent year data is available, to states that do not target their DSH payments to hospitals with high volumes of Medicaid inpatients and to states that do not target DSH payments to hospitals with high levels of uncompensated care.

Data that will influence the DHRM will include United States Census Bureau Data and Medicaid DSH audit and reporting data submitted by the states.

The proposed rule is open for public comment until August 28.

Medicare proposed changes would cut home health reimbursement

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Home health agencies could see decreases of $80 million in 2017 and $950 million in 2019.

Home health providers object to the Centers for Medicare and Medicaid Services’ proposed rule that would reduce Medicare payments by 0.4 percent, or $80 million, in 2018, and up to  $950 million in 2019.

The Partnership for Quality Home Healthcare is especially concerned about a groupings model proposal starting in 2019 that  would change the unit of payment from 60-day episodes of care to 30-day periods of care and places patients in payment groups based on how they fit in six clinical categories.

“CMS is proposing a major reform to home health reimbursement without having worked collaboratively with industry partners like the Partnership and we expect to be included in payment reform development going forward,” said Partnership Chairman Keith Myers. “We question whether CMS has the unilateral authority to make such a proposed change without action by Congress.”

CMS said the six clinical groups used to categorize 30-day periods of care are based on the patient’s primary reason for home healthcare.

The new model could result in a $950 million Medicare payment cuts for home health providers in 2019 if it is implemented in a non-budget neutral manner, according to Home Health Care News. If implemented in a partially-budget-neutral manner, it could reduce payments by $480 million, the report said.

CMS is not proposing a revision to the split percentage payment approach in the change to a 30-day period. However, the agency said it is proposing to phase-out of the split percentage payment approach in the future and is soliciting feedback now.

For 2018, Medicare payments to home health agencies would be reduced by 0.4 percent, or $80 million, based on the proposed policies, CMS projects.

The $80 million decrease reflects the effects of a $190 million increase from a 1 percent home health payment update, a $170 million decrease from a -0.97 percent adjustment to the 60-day episode payment rate to account for nominal case-mix growth, and a $100 million decrease due to the sunset of the rural add-on provision.

The Medicare Access and CHIP Reauthorization Act, or MACRA extended until Jan. 1, 2018 the rural add-on, which increased by 3 percent the payment amount otherwise made for home health services in a rural area.

Additionally, the proposed rule for 2018 refines the home health value-based purchasing model. It revises the applicable measure for receiving performance scores for any of the home health consumer assessment of healthcare providers and systems, or HHCAHPS.

The Partnership for Quality Home Health Care said it plans to release an analysis of the proposed payment model and its impacts on home health delivery.

The coalition is concerned that Affordable Care Act directives for high-risk beneficiaries to receive access to home health services would result in disproportionate cuts to provide the care if the payments are implemented as drafted.

Tuesday’s home health rule is among several proposals that reflect a broader strategy by CMS to relieve regulatory burdens for providers, support the patient-doctor relationship in healthcare and promote transparency, flexibility, and innovation in the delivery of care, CMS said.

“CMS is committed to helping patients and their doctors make better decisions about their healthcare choices,” said CMS Administrator Seema Verma. “We’re redesigning the payment system to be more responsive to patients’ needs and to improve outcomes. The new payment system aims to encourage innovation and collaboration and to incentivize home health providers to meet or exceed industry quality standards.”

Shift in physician workforce towards specialists fuels primary care shortage, potential spending growth

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Areas with more primary care physicians have lower spending per beneficiary, better care, patient satisfaction and lower death rates, authors say.

The composition of the healthcare workforce is shifting towards specialty physicians while primary care growth has gone flat, and according to a Health Affairs blog post, this trend could mean healthcare spending goes up not down.

Labor represents more than half of health care costs, and clinical workforce is a major driver of use and pricing, authors wrote, and there is plenty of support establishing a link between primary care-centered health systems and lower spending. Specifically, areas with more primary care physicians have lower spending per beneficiary, better care and patient satisfaction and lower death rates.

“Given this, many existing payment reform strategies prioritize primary care, and the success of these reforms will require a vibrant–and likely growing–primary care workforce,” the authors wrote.

Health Affairs delved into the Bureau of Labor Statistics’ Occupational Employment Statistics files between 2005 and 2015, focusing their analysis on limited our analysis to ambulatory health care services, hospitals, and nursing and residential care facilities. There was an overall net increase of 2.6 million jobs over this period, six percent of them being physicians. While the number of primary care jobs rose by roughly eight percent, the number of specialist jobs increased six times faster. Also, the overall share of the physician workforce constituted by primary care fell from 44 to 37 percent, the blog said.

These trends raise concerns for access to care and spending. While in theory, the presence of more specialists in a given market could give way to more competition, lower prices and spending and better outcomes, public payer fees are set administratively and not necessarily susceptible to competition. Hospital/physician integration, patient preference could also hinder competition.

The trend of more specialists working in health systems that charge facility fees on top of already expensive prices for care, and the notoriously large salaries specialists make will also likely drive spending upward, authors said.

In light of the aforementioned belief that the strong presence of primary care providers reduces healthcare spending, the workforce trends may be cause for concern. Moreover, they add urgency to previous recommendations from various agencies aimed at bolstering primary care, like MedPac‘s suggestion that the Medicare fee schedule be altered to reflect the value of primary care and close disparities in the fee schedule that overcompensate certain specialists. HRSAhas recommended in the past the medical school funding be funneled toward students who will work in family medicine and other categories.

“If we are to bend the cost curve, we likely need to move more aggressively on fee schedule changes, payment reform, and workforce policies,” the authors said.

CHS announces hospital sales worth $1.5B in revenue amidst ‘disappointing’ 2nd quarter losses

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System is already knee deep in the planned divestitures of 30 hospitals; additional sales are part of shift to “smaller stronger” portfolio.

In addition to the planned divestitures of 30 hospitals,  struggling Franklin, Tennessee-based Community Health Systems announced during an earnings call Wednesday that they are looking at the additional sale of a group of hospitals that carries a combined $1.5 billion in annual net operating revenue.

CHS has already completed 20 of the 30 other planned sales, with 11 being sold in May and another nine deals having closed as of July 1st. The remaining 10 hospital sales are expected to close by September 30th, CHS said.

CHS’ financial health continued its downward slope, with a net loss of $137 million or $1.22 per diluted share in the second quarter of 2017. Their net operating revenue was down 9.7 percent to $4.1 billion. The company’s operating results for the second quarter reflected a 10.8 percent decrease in total admissions. On a same-store basis, both admission and adjusted admission dropped 2.5 percent year over year from 2016, financial documents showed.

Wayne T. Smith, chairman and chief executive officer of Community Health Systems said their focus is now on shifting to a “smaller, stronger portfolio of assets.”

“Obviously, we are disappointed with our performance during the second quarter. Our financial results reflect weaker than expected volumes, which negatively affected our net revenue and Adjusted EBITDA performance. We are seeing better results in certain areas, and we continue to work on a number of initiatives to drive operational and financial improvements.”

CMS gives $2.4 billion boost to inpatient hospitals for fiscal year 2018 with final uncompensated care rule

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http://www.healthcarefinancenews.com/news/cms-gives-24-billion-boost-inpatient-hospitals-fiscal-year-2018-final-uncompensated-care-rule?mkt_tok=eyJpIjoiTXpOa01qUXhaVGd5TnpkaiIsInQiOiJudFozOHVLS1VVNXZZRE42Y0RmTWdIZHpkOU0yNERUSmlXU0VCMlJDMEFyMmVTUUc4aVwvcXRVc0gzXC9ndUdJVjhHT1drZkkzdDhBVFhHZ3BHVjI1NmhIVHY1RmNXSENVdWtwb3RVVnVtaFNWbXNFdnBzb0JVenRcL1ZuR1p0MW0zRyJ9

Inpatient hospitals will see increase of $800 million over the previous year, but long-term care facilities face $110 million cut in payments.

CMS Final Rule for the 2018 Medicare Inpatient Prospective Payment System will give hospitals an overall $2.4 billion raise in fiscal year 2018, the agency said.

Due to the combination of payment rate increases, other policy changes and adjustments acute care hospitals will see $6.8 billion in payments for uncompensated care, an increase of $800 million over the previous year, CMS said.

Medicare payments to inpatient psychiatric facilities will rise by $45 million, or roughly one percent. However, long-term care hospitals will decrease by $110 million in fiscal year 2018.

The changes will affect 3,330 acute care facilities and roughly 420 long-term care hospitals for discharges happening after October 1, 2017. The new rule incorporates CMS’ finalized proposal to use data from its National Health Expenditure Accounts in its estimate of the rate of uninsurance, which is used in calculating the total amount of uncompensated care payments available.

Long-term care hospitals will be facing a cut. Under the 2018 final rule, CMS projected payments will drop roughly 2.4 percent, or $110 million in FY 2018, which is “due in large part to the continued phase in of the dual payment rate system.” However, this amount is actually smaller than the previously projected cut of 3.75 percent, which was first proposed back in April.

CMS has also finalized its proposal for a one-year regulatory moratorium on the payment reduction threshold for patient admissions for long-term care hospitals in FY 2018 while they continue to evaluate the policy, CMS said.