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Survey: 70% of medical groups worried about MACRA implementation
Almost three-quarters of employed medical groups are concerned about implementation of the final Medicare Access and CHIP Reauthorization Act rule, according to The Advisory Board’s survey of the Medical Group Strategy Council.
The Advisory Board said it recently surveyed a group of 30 employed medical groups to determine their concern about MACRA and see how they’re adjusting to the changes MACRA will cause.
Here are five survey findings.
1. Seventy percent of respondents are “concerned” or “totally freaked out” by MACRA. Of the remaining respondents, 20 percent are “confident,” while 10 percent are “ambivalent,” the survey found.
2. The MACRA final rule, a landmark payment system for Medicare physician fees that replaces the sustainable growth rate formula, includes two pathways for provider participation: the Merit-Based Incentive Payment System and the Advanced Alternative Payment Model. According to the survey, 70 percent of respondents anticipate participating in MIPS, while the remaining 25 percent predict they will fall into the APM category.
3. Only half of the medical groups that believe they will participate in MIPS expect to be prepared to report data for the entirety of 2017, according to the survey. Another 21 percent anticipate choosing the partial-year option to be eligible for the smaller positive payment adjustment, and 29 percent of respondents planning to “test the program” by reporting nominal data to avoid the negative payment adjustment.
4. The Advisory Board said 58 percent of survey respondents identified MACRA as the driving force for consolidation efforts in their markets.
5. However, the other 42 percent of respondents have not observed MACRA affecting consolidation decisions in their markets, The Advisory Board said. “This could be a result of the additional support for small practices CMS included in the final rule. But we’re still in the early stages of MACRA implementation, so this may change during the coming year,” The Advisory Board added.
Drug companies to face fines for overcharging 340B hospitals: 4 things to know
HHS’ Health Resources and Services Administration has finalized a rule that sets civil monetary penalties for drug manufactures that overcharge healthcare organizations that are part of the 340B Drug Pricing Program.
Here are four things to know about the final rule.
1. The final rule requires drug manufacturers to calculate the 340B ceiling price on a quarterly basis. The rule includes the methodology manufacturers must use when estimating the ceiling price for a newly covered outpatient drug.
2. Under the final rule, drug manufacturers that intentionally overcharge a covered hospital will face civil monetary penalties. HRSA can fine a manufacturer up to $5,000 for knowingly and intentionally overcharging a 340B hospital for drugs purchased through the program.
3. HRSA clarified that a drug manufacturer that overcharges a hospital for drugs purchased through the 340B program would not face penalties if the manufacturer made an “inadvertent, unintentional or unrecognized error in calculating the ceiling price.” A manufacturer would also be deemed not to have the requisite intent if it “acted on a reasonable interpretation of agency guidance,” or “has established alternative allocation procedures where there is an inadequate supply of product to meet market demand, as long as covered entities are able to purchase on the same terms as all other similarly situated non-340B covered entities.”
4. The final rule is effective March 6. Since the effective date falls in the middle of a quarter, HRSA said it plans to begin enforcing the requirements of the final rule at the start of the next quarter, which begins April 1.
Hospital uncompensated care costs fall to lowest level in 26 years: 4 things to know
From 1990 through 2015, U.S. hospitals’ uncompensated care costs totaled $704.7 billion, according to a recent American Hospital Association report.
To calculate a hospital’s uncompensated care costs, the AHA combined the hospital’s bad debt and financial assistance costs. The uncompensated care figure does not factor in Medicare or Medicaid underpayments or other contractual allowances.
Using that formula, the AHA has calculated national uncompensated care costs from 1990 through 2015.
Here are four things to know about hospital uncompensated care costs, according to the AHA report.
1. In 1990, total uncompensated care costs were $12.1 billion, representing 6 percent of total hospital expenses.
2. Although total uncompensated care costs steadily increased from 1990 to 2000, the costs consistently represented about 6 percent of total expenses. During that period, uncompensated care costs represented the smallest percent of total expenses in 1992 at 5.9 percent and the largest percent in 1999 at 6.2 percent.
3. From 2000 to 2015, national uncompensated care costs fluctuated, reaching a high of $45.9 billion in 2012, which represented 6.1 percent of total expenses.
4. In 2015, total uncompensated care costs were $35.7 billion, representing 4.2 percent of total expenses — the lowest level in 26 years.
The #1 thing you need to know from the 2017 JP Morgan Healthcare Conference: Follow the money
If you want to understand the future of the $3 trillion U.S. healthcare industry, the lesson of the past is to ‘follow the money.’ And no one would argue that the place to do that is the infamous JP Morgan Healthcare Conference taking place this week in San Francisco.
While there are an estimated 4,000 people attending the conference, there’s roughly another 20,000 here for ‘off the grid’ meetings in every nook and cranny you can find. It is a surreal atmosphere in the form of the top executives from more than 450 private and public companies in biotech, pharmaceutical, medical device and technology, as well as healthcare providers, payers, private equity and venture capital firms and investment banks. Simply stated, this is where medicine’s flow happens.
With that said, roughly $1 trillion or one-third of annual U.S. healthcare spend flows through hospitals and healthcare delivery systems. So, if you want to understand what’s happening now and what will happen in the future, a good place to start is in the nonprofit healthcare provider track, where CEOs and CFOs of over 20 of our nation’s largest healthcare delivery systems presented their strategic plans in rapid fire 25-minute presentations.
Together these organizations represent over $100 billion or 10 percent of that $1 trillion spend. Incredible. The average organization presenting had over $6 billion in annual revenue, 15 hospitals, close to 30,000 employees and thousands of physicians on staff. Many of the name brands in healthcare including Downers Grove, Ill.-based Advocate Health Care, Irving, Texas-based CHRISTUS Health, Cleveland Clinic, Detroit-based Henry Ford Health System, Salt Lake City-based Intermountain Healthcare, Indianapolis-based IU Health, Oakland-based Kaiser Permanente, Cincinnati-based Mercy Health, New York-Presbyterian, Chicago-based Northwestern Medicine, Northwell Health in Great Neck, N.Y., and Robert Wood Johnson Barnabas Health based in West Orange, N.J., presented along with leading children’s hospitals such as Children’s Hospital of Philadelphia and innovative physician focused models such as Marshfield Clinic in Wisconsin and Geisinger Health System in Danville, Pa.
This provided an incredibly important snapshot of both the ground level view of what’s happening in the real world today as well as the bets being placed for the future. What follows is a high-level perspective of what was shared by these prominent provider organizations.
So, follow the money…and here’s the Top 10 Trends shaping how that money is flowing:
5 health systems with strong finances
http://www.beckershospitalreview.com/finance/5-health-systems-with-strong-finances-011117.html
Here are five hospitals and health systems with strong operational metrics and solid financial positions according to recent reports from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings.
Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.
1. Minneapolis-based Allina Health has an “AA-” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. The health system has stable operating cash flow and favorable balance sheet metrics, according to Moody’s.
2. Coral Gables-based Baptist Health South Florida has an “AA-” rating and stable outlook with S&P. The system has maintained key balance sheet metrics and generated better-than-projected financial results in fiscal year 2016, according to S&P.
3. Christiana Care Health Services has an “Aa2” rating and stable outlook with Moody’s. The Newark, Del.-based system has solid liquidity and a history of above average financial performance, according to Moody’s.
4. Springfield, Ill.-based Hospital Sisters Health System has an “AA-” rating and stable outlook with S&P. The system successfully implemented a strategic plan, which helped it maintain a strong balance sheet while improving operations, according to S&P.
5. Madison-based University of Wisconsin Hospital and Clinics has an “Aa3” rating and stable outlook with Moody’s. The system has strong balance sheet resources and established clinical and academic market positions, according to Moody’s
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