Congress could get rid of ACA lawsuit, but won’t

https://www.axios.com/congress-could-get-rid-of-aca-lawsuit-ba906df5-57fd-492a-b365-baab06421ac1.html

 Illustration of hand with gavel breaking a red cross symbol

Congress could kill the lawsuit that threatens to wipe out the Affordable Care Act, legal experts say, but the politics of the issue will almost certainly keep it from doing so.

Why it matters: While these same legal experts think it’s very likely that this case gets thrown out on appeal, that doesn’t mean it definitely will — and a failure to overturn it would wreak havoc on the entire health care system.

The big picture: A federal judge ruled that since Congress repealed the ACA’s fine for not having health insurance, the still-existing-yet-toothless mandate that people have insurance is now unconstitutional, as is the rest of the law.

  • That’s because the requirement for having insurance is no longer bringing in any revenue. Its status as a revenue-generating tax is why the ACA survived its first major legal challenge.
  • The judge wrote in his decision that “both [the 2010 and 2017] Congresses manifested the same intent: The Individual Mandate is inseverable from the entire ACA.” That means the rest of the law is, by association with the mandate, unconstitutional as well.

What they’re saying: Each of the three legal experts I spoke to offered a different idea as to how Congress could make the entire lawsuit moot, if it wanted to.

  • Law professor Nicholas Bagley said that Congress could pass a law, signed by the president, stating that it believes the individual mandate is separable from the ACA – making its intent clear.
  • Legal expert and ACA supporter Tim Jost said that Congress could pass a $1 penalty for not having health insurance, essentially recreating its status as a (constitutional) tax.
  • Legal expert and ACA critic Jonathan Adler told me that Congress could just repeal the health insurance requirement entirely. “The surest way you make that go away is by officially getting rid of the part of the law that is allegedly unconstitutional,” he said.

Yes, but: Doing any of these things would require Republicans to vote to protect the ACA — giving up yet another chance to get rid of it — and Democrats to admit that the lawsuit is reasonable, as well as potentially to vote to repeal the individual mandate.

  • “We shouldn’t be jumping through hoops to try to respond to a judge who just broke decades of legal precedent on severability,” Sen. Chris Murphy said. “Maybe there’s creative things we could do if it got upheld on appeal, but I don’t think it’s going to be upheld on appeal.”
  • “This is an interesting case and we’re going to have to see how it ultimately plays out,” Finance Chairman Orrin Hatch said in a statement.

Incoming House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer have said that they want to intervene in the case.

  • While only Pelosi has the power or the votes to make that happen without Republican assistance, it would have little practical effect, the experts said.
  • Courts care what Congress does, not what Congress says,” Adler said. “And intervening to defend the law in court is really more Congress talking than Congress doing.”

Ironicallythe precedent for the House filing a lawsuit or becoming party to a case is when the House sued the Obama administration over the ACA’s cost-sharing reduction payments.

  • “Just like [former Speaker John] Boehner’s intervention was a political stunt, I also think Pelosi’s intervention would be a political stunt,” Bagley said.

 

 

The GOP’s health problem: They like big chunks of the Affordable Care Act

https://www.axios.com/aca-ruling-republicans-politics-changed-f54f7a3f-53f4-47f2-9deb-2c4c424534b6.html

A protester in New York holds a sign saying, "ACA saves lives"

Now that a Texas judge has ruled that the entire Affordable Care Act is unconstitutional — all because of its individual mandate — Republicans may find themselves wishing for a different outcome.

The big picture: There is little hope of a deal with Democrats on health reform in a divided Congress if the decision is upheld. Democrats will now use the 2020 campaign to paint Republicans as threatening a host of popular provisions in the ACA. And here’s the kicker: protections for pre-existing conditions, the provision that played such a big role in the midterms, is not even the most popular one.

Here are just some of the more popular provisions that would be eliminated — in order of their popularity, according to the Kaiser Family Foundation’s November tracking poll:

  • Young adults can remain on their parents’ health insurance policies until age 26: 82% of the public supports this, including 66% of Republicans.
  • Subsidies for lower and moderate income people: 81% support this, including 63% of Republicans.
  • Closing the “donut hole” so there’s no gap in Medicare prescription drug coverage: 81% like this, as do 80% of Republicans.
  • Eliminating costs for many preventive services: 79% support this, as do 68% of Republicans.
  • Medicaid expansion: 77% like it, as do 55% of Republicans.

The list goes on, but notably, further down but still very popular: 65% of the public supports protecting people with pre-existing conditions, as do 70% of Democrats, 66% of independents and 58% of Republicans. The fact the pre-existing conditions does not top the list shows how popular all of the other provisions are.

The Republican attorneys general brought their lawsuit in a different political environment, when Republicans held the House, Senate and the White House. If that had continued, they could have had reason to hope that a ruling in their favor, if upheld by higher courts, could have helped them achieve their goal of repeal and replace legislation.

The bottom line: Their world has changed politically, with Democrats preparing to take control of the House next year, and Republicans may have been better off settling for the repeal of the mandate penalty that Congress already passed. The mandate was by far the least popular part of the law and gave them something to crow about. Now, they may have bought more than they bargained for.

 

 

 

 

HEALTHLEADERS TOP 10 FINANCE STORIES OF 2018

https://www.healthleadersmedia.com/finance/healthleaders-top-10-finance-stories-2018

Here’s a roundup of our most popular finance stories of the year.


KEY TAKEAWAYS

M&A activity among health systems and payers were a dominant narrative throughout 2018.

Policy changes affecting payment models also drew widespread attention from health leaders across the country.

The entrance of corporate disruptors stirred discussion and speculation among traditional healthcare industry players.

This year was marked by changing dynamics relating to healthcare finance, most notably from outside corporate disruptors like Amazon eyeing entry into the industry and widespread M&A activity across most sectors.

HealthLeaders has been on the front line covering the news and policy changes coming out of Washington, D.C., Wall Street, Nashville, and how it is going impact healthcare organizations as they shape their business strategies.

Below are the top 10 healthcare finance stories of 2018:

10. 4 TAKEAWAYS AS ATHENAHEALTH SELLS FOR LESS, BOARD INVESTIGATED

“Months of public negotiations and tribulations have resulted in a $5.7 billion acquisition of athenahealth set to close in Q1 2019, but it’s not a done deal yet.”

9. CMS DELAYS E/M PAYMENT CHANGES TO 2021 IN PHYSICIAN FEE SCHEDULE FINAL RULE

“A plan to simplify the way physicians bill Medicare for evaluation and management (E/M) visits has been finalized and will begin to take effect next year, but the controversial payment component of the plan will be delayed until 2021, giving stakeholders more time to influence policymaking, the Centers for Medicare & Medicaid Services announced.”

8. FIDELIS-CENTENE DEAL CLOSES, CATHOLIC CHURCH CREATES $3.2B HEALTH FOUNDATION

“The sale of the nonprofit health plan came after months of review from state regulators and final approval from interim Attorney General Barbara Underwood. ‘We are pleased to have completed our transaction with Fidelis Care on schedule and to enter the New York market by joining with a company with which we are closely aligned on many levels,’ Michael F. Neidorff, CEO of Centene, said in a statement.”

7. MEMORIAL HERMANN CFO BRIAN DEAN TALKS INNOVATION AND GROWTH

“Since joining Memorial Hermann Health System in 2013, Brian Dean served as both CFO and CEO of Memorial Hermann-Texas Medical Center, before his promotion last month to CFO of the entire system effective this August. Dean spoke to HealthLeaders about ascending to the new role, the lessons he’s learned in his years at the system, and the strategies he’s pursuing to further strengthen the organization’s finances.”

6. NATIONAL PENSION CRISIS COMING STORM FOR HOSPITALS

“Healthcare organizations are feeling the effects of the national shortfall of $645 billion in pension liabilities and are pursuing the ‘least bad option’ for handling the problem. The nationwide pension crisis has organizations scrambling to properly fund employee’ retirement packages and represents a self-inflicted dilemma that will have a dramatic impact on the healthcare industry without a clear solution.”

5. ‘SITE-NEUTRAL’ PAYMENTS? HOSPITALS UNHAPPY WITH OPPS 2019

“One observer praised CMS for ‘picking a fight with powerful hospitals’ in the agency’s annual update to payment proposals for outpatient services. Under OPPS 2019, reimbursement for clinic visits in outpatient hospital settings would be capped at the rate paid for clinic visits in physician offices.”

4. HOW DATA WILL DRIVE THE CVS-AETNA MERGER

“Through a vertical integration without significant precedence in healthcare, CVS and Aetna have the opportunity to use their increased scale to pursue several innovative business strategies going forward. Many industry players are interested in what the newly merged company could accomplish to further assist consumers at multiple points along the healthcare experience.”

3. WALMART-HUMANA ‘SIGNIFIES THE BEGINNING OF THE AVALANCHE’ IN HEALTHCARE

“PBMs, retailers, and providers are getting together to integrate health plans, with Walmart-Humana taking mergers to another level of complexity and transformation, says one healthcare consultant. The Walmart merger with Humana is another strong sign that the healthcare industry is rapidly merging with disparate parts of the retail world, intermingling so much and so quickly that some traditional parts of healthcare may be absorbed and cease to exist as we now know them.”

2. HEALTHCARE RIDESHARING MAKES INROADS IN LOST REVENUE

“Health systems are recouping lost patient revenues by removing barriers to access treatment, and reducing operational costs by coordinating with ridesharing services.Nearly 4 million patients per year miss out on care due to lack of available transportation options related to cost or geographic barriers, according to the 2017 American Hospital Association study, ‘Transportation and the Role of Hospitals.'”

1. TRUMP ADMINISTRATION RELEASES FINAL ACA RULE FOR 2019

“After attempts to repeal the Obama administration’s signature healthcare law faltered, the Trump administration set an agenda for the Affordable Care Act’s implementation next year.In signing a major tax reform bill into law late last year, President Donald Trump claimed to have “essentially repealed Obamacare” by neutralizing the legislation’s individual mandate penalty.”

 

 

 

FastMed, NextCare announce merger

https://www.healthcaredive.com/news/fastmed-nextcare-announce-merger/544538/

Dive Brief:

  • Phoenix-based FastMed Urgent Care has signed a definitive agreement to acquire NextCare Holdings of America, a Mesa, Arizona-based provider of urgent care and occupational medical services.
  • The combined company will have 251 clinics in 10 states — merging FastMed’s 110 clinics in Arizona, Texas and North Carolina with NextCare’s 141 in Arizona, Colorado, Kansas, Missouri, New Mexico, North Carolina, Oklahoma, Texas, Virginia and Wyoming.
  • The deal, which is subject to regulatory approvals, is expected to close within 60 days.

Dive Insight:

The shift to value-based care and greater use of alternative care sites is one factor fueling growth in urgent care centers. Meanwhile, the million of Americans newly insured under the Affordable Care Act and a growing aging population has driven up emergency room volumes.

In a 2015 survey, 75% of emergency department physicians said visits had increased over the past year. The result is an overtaxed emergency staff and long wait times for patients. By contrast, urgent care offers medical care when and where patients need it and at a lower price point.

According to MarketsandMarkets, the global urgent care market will reach $26 billion by 2023, growing at a compound annual growth rate of 5.3%. Driving growth are lower costs and shorter wait times, growing investment in the sector, aging of populations and strategic partnerships between urgent care providers and hospitals.

In July, Morristown, New Jersey-based Atlantic Health System and MedExpress partnered to improve urgent care access and care coordination between the companies. The collaboration will allow MedExpress’ urgent care patients to get care at an Atlantic Health facility if more advanced care is needed.

And in October, Walgreens announced a strategic collaboration with Michigan-based McLaren Health Care aimed at improving health and pharmacy services. The vertical pact came as CVS Health and Aetna were wrapping up their megamerger.

 

 

What to expect after whirlwind ACA ruling

https://www.healthcaredive.com/news/what-to-expect-after-whirlwind-aca-ruling/544527/

Judge Reed O’Connor’s unexpectedly sweeping ruling calling the Affordable Care Act unconsitutional late Friday sent shock waves rippling through the healthcare landscape.

The ruling, which will almost certainly be appealed (likely up to the U.S. Supreme Court), would effectively wipe out Medicaid expansion, pre-existing condition protections and could affect a number of hospital payment reforms.

But the decision faces a lengthy appellate process, along with attacks from the left and right alike.

What happens immediately?

The ruling doesn’t have much immediate impact, as it was a declaratory judgment and not an injunction to stop the ACA. The Trump administration confirmed Friday night that the law would stay in place during appeals.

Still, President Donald Trump himself celebrated on Twitter in the early hours of Monday morning.

Not all of the administration officials echoed the tone, however, as CMS Administrator Seema Verma tweeted a message of reassurance Friday night, confirming that the exchanges would stay open through Saturday as previously planned.

A day later, however, Verma returned to script, tweeting “Obamacare has been struck down by a highly respected judge.”

Critics decried the timing of the ruling, which dropped on the penultimate day of an already-lagging open enrollment season for 2019. Kaiser Family Foundation put enrollment in the individual market at 17 million in 2016, 15.2 million in 2017 and 14.2 million as of Q1 2018.

Saturday dawned with potential confusion for tens of thousands of Americans looking to enroll at the last minute. The Justice Department had asked O’Connor to hold off on the ruling so that it didn’t affect 2019 enrollment on Healthcare.gov until after enrollment ended Saturday.

He issued his decision one day before. But it’s unclear what effect the ruling will have, if any, on 2019 insurance.

Republicans were in a bind with the timing as well, along with the mounting popularity of the ACA.

In 2018, as protections for pre-existing conditions took center stage in the midterms, Republicans changed tack and hedged their language around the ACA, promising to protect Americans’ coverage despite dozens of attempts at repealing the entire law. 

Which players will see the biggest impact?

The decision Friday evening sent ripples through Wall Street with major dips for hospitals and insurers. HCA stock dropped more than 5%, Cigna and Humana each fell 4%, Centene took a 7.5% hit and Molina dropped as much as 13%. Some stocks recovered later Monday morning.

Leerink analysts called Monday a buying opportunity for managed care organizations, along with WellCare and HCA.

While the law touches nearly every aspect of American healthcare, some players will take bigger hits than others.

Hospitals, especially those who serve a disproportionate number of ACA-insured patients, don’t need the further stress on their bottom lines.

America’s Essential Hospitals president and CEO Bruce Siegel called the ruling a “profoundly troubling development,” adding that “the crushing rise in the number of uninsured patients likely to follow this decision, absent a higher court’s reversal, will push [hospitals] to the breaking point.”

Health systems are “deeply disappointed” with O’Connor’s decision, said Rick Pollack, CEO of the American Hospital Association. “The ruling puts health coverage at risk for tens of millions of Americans, including those with chronic and pre-existing conditions, while also making it more difficult for hospitals and health systems to provide access to high-quality care.”

Multiple provider groups urged a stay in the decision until it moves through the appeals process.

 

 

 

 

Court: Trump can’t let companies deny birth control coverage

https://www.apnews.com/15851f17cb164b89a4fa3d8be33e156b

Image result for Click to copyhttps://apnews.com/15851f17cb164b89a4fa3d8be33e156b RELATED TOPICS Health Birth control North America Courts U.S. News Barack Obama Court: Trump can’t let companies deny birth control coverage

A divided U.S. appeals court Thursday blocked rules by the Trump administration that allowed more employers to opt out of providing women with no-cost birth control.

The ruling, however, may be short lived because the administration has adopted new rules on contraceptive coverage that are set to take effect next month and will likely prompt renewed legal challenges.

Thursday’s ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals concerned changes to birth control coverage requirements under President Barack Obama’s health care law that the U.S. Department of Health and Human Services issued in October 2017.

States were likely to succeed on their claim that those changes were made without required notice and public comment, the appeals court panel said in a 2-1 decision.

The majority upheld a preliminary injunction against the rules issued by U.S. District Judge Haywood Gilliam last year. It, however, limited the scope of the injunction, applying it only to the five states in the lawsuit and not the entire country.

Another federal judge also blocked the rules, and her nationwide injunction remains in place.

An email to the Justice Department seeking comment was not immediately returned.

Obama’s health care law required most companies to cover birth control at no additional cost, though it included exemptions for religious organizations. The new policy allowed more categories of employers, including publicly traded companies, to opt out of providing free contraception to women by claiming religious objections. It also allowed any company that is not publicly traded to deny coverage on moral grounds.

The Department of Justice said in court documents that the rules were about protecting a small group of “sincere religious and moral objectors” from having to violate their beliefs. The changes were favored by social conservatives who are staunch supporters of President Donald Trump.

California filed a lawsuit to block the changes that was joined by Delaware, Maryland, New York and Virginia.

“Today’s decision is an important step to protect a woman’s right to access cost-free birth control and make independent decisions about her own reproductive health care,” California Attorney General Xavier Becerra said in a statement.

The states argued that the changes could result in millions of women losing free birth control services, forcing them to seek contraceptive care through state-run programs or programs that the states had to reimburse.

The states show with “reasonable probability” that the new rules will lead women to lose employer-sponsored contraceptive coverage, “which will then result in economic harm to the states,” 9th Circuit Judge J. Clifford Wallace, a nominee of Republican President Richard Nixon, wrote for the majority.

In a dissent, 9th Circuit Judge Andrew Kleinfeld said the economic harm to the states was “self-inflicted” because they chose to provide contraceptive coverage to women. The states, therefore, did not have the authority to bring the lawsuit, Kleinfeld, a nominee of Republican President George H.W. Bush, said.

The case became more complicated after the Trump administration last month issued new birth control coverage rules that are set to supersede those at issue in the lawsuit before the 9th Circuit. Under the new rules, large companies whose stock is sold to investors won’t be able to opt out of providing contraceptive coverage.

Wallace said the new rules did not make the case before the 9th Circuit moot because they are not set to take effect until January.

 

 

 

 

Health Law Could Be Hard to Knock Down Despite Judge’s Ruling

Image result for Health Law Could Be Hard to Knock Down Despite Judge’s Ruling

Could a federal judge in Texas be the catalyst that finally brings down the Affordable Care Act, a law that has withstood countless assaults from Republicans in Congress and two Supreme Court challenges?

On the morning after Judge Reed O’Connor’s startling ruling that struck down the landmark health law, legal scholars were doubtful.

Lawyers on both sides of previous A.C.A. battles said the reasoning behind this one was badly flawed, notably in its insistence that the entire 2010 law must fall because one of its provisions may have been rendered invalid by the 2017 tax overhaul legislation. Had Congress meant to take such radical action, they said, it would have said so at the time.

Legal experts also noted that the Supreme Court, where most people believe the case is headed, historically has been reluctant to strike down federal laws, particularly those that have become ingrained in the lives of millions of citizens.

For now, the ruling is unlikely to affect the more than 23 million people who get health coverage through the insurance marketplaces set up by the law and the expansion of Medicaid in 36 states. The Trump administration immediately said — despite the president’s gleeful tweets hailing the decision — that it would continue to enforce the law until the appeals process plays out, which could take more than a year. That will ensure that the American health care system, which has been operating under the law for more than five years, will not be thrown into immediate chaos.

Judge O’Connor, who was appointed by George W. Bush to the Federal District Court in Fort Worth, has ruled against laws supporting immigration, transgender and Native American rights. Conservative lawyers are known to choose his district to file cases, hoping he will fire opening salvos that propel their issues through the court system.

The crux of Judge O’Connor’s decision centered on the health law’s requirement that most people have health coverage or pay a tax penalty.

That tax penalty was effectively eliminated when Congress reduced its amount to zero in the tax legislation enacted last year. And once the tax penalty no longer stood, the so-called “individual mandate” was unconstitutional and the entire law had to fall, the judge reasoned in accepting the argument of the 20 states that brought the lawsuit challenging the legislation.

But an array of legal experts said that argument was unsound. Jonathan H. Adler, a conservative law professor at Case Western Reserve University in Cleveland, called that position “simply nonsensical” and said the judge’s conclusion was “hard to justify” and “surprisingly weak.”

He and others pointed to the fact that even though Congress erased the tax penalty, it did not touch the rest of the sprawling health act. A longstanding legal doctrine called “severability” holds that when a court excises one provision of a statute, it should leave the rest of the law in place unless Congress explicitly stated that the statute could not survive without that provision.

In this case Congress’s intention was particularly clear, legal experts said.

“Congress amended one provision of a 2,000 page law and did not touch the rest of the law so it is implausible to believe that Congress intended the rest of the law not to exist,” said Abbe R. Gluck, a health law expert at Yale Law School.

Judge O’ Connor also cited congressional intent, focusing on language from the 2010 law, which underscored the significance of the individual mandate to the entire act. But he largely ignored the 2017 congressional action. In essence, legal scholars said, he looked to one congressional view and not the more recent one.

And in so doing, he opened the door for House Democrats to intervene in successive appeals. On Saturday aides to Representative Nancy Pelosi, who is expected to become the next speaker of the House, said she would move quickly to notify the Trump administration that House Democrats intended to step in to defend the law in the case.

As the legal showdown plays out, efforts to protect the A.C.A. are also underway in the courts. Earlier this year the state attorney general of Maryland sued the Trump administration for attempting to gut the act. The case is pending.

Nicholas Bagley, a health law expert at the University of Michigan, suggested that Judge O’Connor may not yet be done with the case. In a series of tweets on Saturday, Mr. Bagley noted that the judge had not yet addressed a handful of central issues in the suit, nor had he issued a final ruling indicating whether the act should fall immediately. Judge O’Connor could indeed hold onto the case before an appellate court takes it up.

But if he lets the case move forward, a likely timeline, according to many legal experts, is that the case will be taken up by the United States Court of Appeals for the Fifth Circuit in New Orleans this spring. If the Fifth Circuit upholds Judge O’Connor’s decision, the Supreme Court is likely to agree to hear the case in its term that starts in October 2019, with a decision in 2020. If the Fifth Circuit overturns the judge’s ruling and upholds the law, there is a good chance the Supreme Court would decline to even take the case, legal scholars said.

One law professor, Ilya Somin of George Mason University, criticized parts of the opinion, but said he was “a bit less confident about the outcome” because “the history of A.C.A.-related litigation is filled with surprises and failed predictions by experts.”

Among the observations flying about was the notion that the Supreme Court only rarely strikes down federal laws, and it is particularly reluctant to do so when the laws have been in place for years and affect millions of people. In fact, Chief Justice John G. Roberts Jr. wrote in his 2012 opinion upholding the health care law, that the court should err on the side of sustaining federal laws.

“As between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid,” he wrote, quoting Justice Oliver Wendell Holmes Jr., “our plain duty is to adopt that which will save the act.”

The five justices who voted to uphold the law in a landmark 2012 case, including Justice Roberts, are all still on the court.

 

 

 

 

PwC names 6 healthcare issues to watch in 2019

https://www.beckershospitalreview.com/hospital-management-administration/pwc-names-6-healthcare-issues-to-watch-in-2019.html?origin=ceoe&utm_source=ceoe

Image result for 2019 healthcare trends

PwC’s Health Research Institute believes 2019 is the year the “New Health Economy” will finally become a reality.

The past year marked record interest in the healthcare industry, especially from outside forces like venture capitalists and business giants like Amazon, Berkshire Hathaway and JP Morgan Chase. PwC believes forces like these mean healthcare will no longer be an “outlier” industry that operates in its own world outside the greater U.S. economy.

In its 13th annual report, PwC’s HRI identified the following six healthcare trends to watch in 2019:

1. With an injection of $12.5 billion from investors over the past two years, PwC expects connected health devices and digital therapies to become integrated into care delivery and the regulatory process for drug and device approvals. PwC expects several new products to come to market in this category in 2019. What does this mean for providers? They will need to find a way to integrate this data into the EHR so it can be used to maximize the patient visit.  

2. Artificial intelligence and automation will require healthcare organizations to invest in and train their workforce to succeed in a digital economy. Almost half (45 percent) of executives surveyed by PwC’s HRI said skill deficiencies among their workforce are holding their organization back, yet few employers are offering training in AI, robotics and automation or data analytics.

3. The 2017 Tax Cuts and Jobs Act will continue to create tax savings for healthcare organizations while creating new challenges. Providers are likely to feel the biggest challenges via changes to unrelated business taxable income, which could create new expenses. Academic medical centers may also feel minor negative pressure from the net investment excise tax on educational foundations.

4. The healthcare industry is ready for its own budget airline provider. It needs a disruptor that is low-cost, transparent, informed by technology and “laser-focused on the consumer” like Southwest Airlines, according to PwC. Organizations that answer this call are starting to emerge — like a profitable, Medicaid-focused, walk-in-only family medicine practice in Denver — but progress is slow and there isn’t one simple formula to follow. PwC advises healthcare organizations to look for patient segments that need a “budget airline” and determine how to meet those needs.

5. The pace of private equity investment is expected to accelerate as healthcare companies continue to divest noncore business units to investors next year. It also expects PE-healthcare partnerships to evolve, with some healthcare companies co-investing in their own spinoffs. PwC suggested healthcare organizations pursue PE partnerships not only for financing, but also for PE firms’ ability to provide strategic views of trends across their portfolio of investments.

6. Republican changes to the ACA will shift the law’s winners and losers. Providers are on the losing end of most of these changes, including softened insurance mandates, short-term health insurance plans, less federal support for ACA exchanges and reduced federal Medicaid spending, according to the report.

Download the report here.

 

 

Risk-Adjustment Fix Finalized for 2018 After Bout of Uncertainty

https://www.healthleadersmedia.com/finance/risk-adjustment-fix-finalized-2018-after-bout-uncertainty

Officials have made no secret of their disdain for the ACA, so some accused them of making an excuse to destabilize the market. Not so, says the CMS administrator.


KEY TAKEAWAYS

The fix follows a brief freeze last summer, when the Trump administration said it was just following a judge’s order.

The payments are a permanent fixture of the ACA designed to compensate insurers who cover sicker groups.

Five months after the Centers for Medicare & Medicaid Services sent a wave of uncertainty across the health insurance industry by freezing risk-adjustment payments, the agency has finalized a fix for the 2018 benefit year.

The move seeks to appease a federal judge in New Mexico who ruled last February that the government had failed to justify its methodology for calculating the payments for benefit years 2014-2018. That ruling was the basis, CMS said, for the administration’s decision to freeze payments suddenly last July.

The freeze lasted only two-and-a-half weeks until CMS announced a final rule to resume the payments for the 2017 benefit year. That final rule re-adopted the existing methodology, with an added explanation regarding the program’s budget neutrality and use of statewide average premiums. A similar fix for the 2018 benefit year was proposed two weeks later.

Risk-adjustment payment policies for the 2019 benefit year, which weren’t subject to the judge’s ruling, were finalized in April.


The risk-adjustment payments are a permanent feature of the Affordable Care Act designed to offset the law’s requirement that insurers offer coverage without regard to a consumer’s health status. Since some insurers will inevitably attract sicker patient populations than others, the ACA redirects money from insurers with healthier populations to those with higher utilization.

Trump administration officials have made no secret of their disdain for the ACA, so some accused them of using the February ruling as an excuse to inject uncertainty into the market, one exhibit in the menagerie of alleged “sabotage.” Even the nonprofit health plan that filed the lawsuit that prompted the freeze accused the government of making “a purely self-inflicted wound” when it could have instead promulgated a new rule all along.

Conservative critics, meanwhile, accused the administration of capitulating to political and industry pressure by ending the freeze, when it should have instead “ended its micromanagement of the insurance market.”

CMS Administrator Seema Verma said in a statement Friday that the final rule “continues our commitment to provide certainty regarding this important program, to give insurers the confidence they need to continue participating in the markets, and, ultimately, to guarantee that consumers have access to better coverage options.”

Kris Haltmeyer, vice president of legislative and regulatory policy for the Blue Cross Blue Shield Association, lauded the fix.

“We are pleased to see CMS issue this final rule to keep the risk adjustment program in place for the 2018 benefit year, ensuring stability in health care coverage for millions of Americans,” Haltmeyer said in a statement. “This important program has worked for years to balance the cost of care between healthy Americans and those with significant medical needs and, as CMS has stated, is working as intended.”

“The program’s continued smooth operation is vital to ensure access to a broad range of coverage options for millions of individuals and small businesses,” he added.

Verma noted that the litigation is still pending.

 

 

 

Federal Subsidies Could Expand to Health Programs That Violate Obamacare

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 The Trump administration said Thursday that states could bypass major requirements of the Affordable Care Act by using federal funds for a wide range of health insurance programs that do not comply with the law.

Federal officials encouraged states to seek waivers from provisions of the law that specify who is eligible for premium subsidies, how much they get and what medical benefits they receive.

It was “a mistake to federalize so much of health care policy under the Affordable Care Act,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, told state officials at a conference in Washington.

The new policy outlined by the administration on Thursday upends a premise of the Affordable Care Act: that federal subsidies can be used only for insurance that meets federal standards and is purchased through public marketplaces, also known as insurance exchanges.

Under the new policy, states could use federal subsidies to help people pay for employer-sponsored insurance. Consumers could combine federal funds with employer contributions to buy other types of insurance.

Under the Affordable Care Act, premium tax credits are available to people with incomes up to four times the poverty level, roughly $83,000 a year for a family of three. With a waiver, states could provide assistance to higher-income families.

The Trump administration laid out templates for state programs — waiver concepts — that could significantly depart from the model enacted by Congress in 2010.

Alex M. Azar II, the secretary of health and human services, said states could use the suggestions to “create more choices and greater flexibility in their health insurance markets, helping to bring down costs and expand access to care.”

Democrats assailed the initiative as an audacious effort to undermine the Affordable Care Act. And they said the administration was ignoring the midterm election success of Democrats who had promised to defend health care that they said was threatened by President Trump and Republicans in Congress.

“The American people just delivered an overwhelming verdict against Republicans’ cruel assault on families’ health care,” said the House Democratic leader, Nancy Pelosi of California. “But instead of heeding the will of the people or the requirements of the law, the Trump administration is still cynically working to make health insurance more expensive and to leave more Americans without dependable coverage.”

Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee, said the administration was creating a fast lane for swift approval of “junk insurance.”

The Affordable Care Act prohibits insurers from denying coverage or charging higher premiums to people with pre-existing medical conditions. At campaign rallies this fall, Mr. Trump repeatedly promised: “We will always protect Americans with pre-existing conditions. Always.”

Ms. Verma said Thursday that “the A.C.A.’s pre-existing condition protections cannot be waived.

But states could use federal funds to subsidize short-term plans and “association health plans,” in which employers band together to provide coverage for employees. Such plans are free to limit or omit coverage of benefits required by the Affordable Care Act, such as mental health care, emergency services and prescription drugs.

A provision of the Affordable Care Act allows waivers for innovations in state health policy. The federal law stipulates that state programs must provide coverage that is “at least as comprehensive” as that available under the Affordable Care Act and must cover “at least a comparable number” of people.

Two powerful House Democrats said the new guidance issued by the Trump administration was illegal because it did not meet the standards for waivers set forth in the Affordable Care Act.

“It is contrary to the plain language of the statute, and it appears to be part of the administration’s ideologically motivated efforts to sabotage the Affordable Care Act,” said a letter sent to Mr. Azar by Representatives Frank Pallone Jr. of New Jersey and Richard E. Neal of Massachusetts.

In issuing the guidance, they said, Mr. Azar also violated the Administrative Procedure Act, which generally requires agencies to provide an opportunity for public comment before adopting new rules.

Republican governors have been pleading with federal officials to give states more authority to regulate health insurance.

Paul Edwards, a deputy chief of staff to Gov. Gary Herbert of Utah, a Republican, said, “Utah welcomes all efforts that give us maximum flexibility to structure our health care programs to the unique needs of our citizens.” State officials “will look closely at how these new rules could benefit Utahns,” he said.

Brenna Smith, a spokeswoman for Gov. Kim Reynolds of Iowa, a Republican, said the governor “has a proven track record of expanding health care options for Iowans and is eager to see the new opportunities this proposal might open up.”

Iowa tried last year to get a waiver under Obama-era guidance, seeking essentially to opt out of the Affordable Care Act marketplace by offering customers a single plan with lower premiums and a high deductible.

Ms. Reynolds ultimately withdrew the request in frustration, saying at the time that “Obamacare’s waiver rules are as inflexible as the law itself.”

One option for states is to take federal funds and put the money into accounts that consumers could use to pay insurance premiums or medical expenses.

Likewise, Ms. Verma said: “States can develop a new state premium subsidy structure and decide how premium subsidies should be targeted. States can set the rules for what type of health plan is eligible for state premium subsidies.”

She was speaking Thursday at a conference of the American Legislative Exchange Council, a conservative group that promotes limited government and drafts model legislation.