HRSA rolls out drug pricing site for 340B hospitals

https://www.fiercehealthcare.com/hospitals-health-systems/hrsa-rolls-out-drug-pricing-site-for-340b-hospitals?mkt_tok=eyJpIjoiWldVeU5HSmtZek5oT1dSaiIsInQiOiJYUXRUNlZ3dGc2aVBWOVdtZ1BGb3Y2bUZNOFowbFwvQ2Y3SzZBcTB6aWswRFJtSEZ5eWFFVStCWmt1TFprZ2V4bDIzS29idkZoZ2dcL1dPbDhQV3NuV0dZXC9cL1M4XC9rc0hKMkNvY3JFa1B6OHlHeWFRZm5YcjdZa1hCdEl0bU9sdkgxIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Drug prices

After multiple delays, the Health Resources & Services Administration (HRSA) has finally launched an online tool that 340B hospitals can use to determine the maximum that pharmaceutical companies can charge for drugs.

HRSA’s new pricing site went live on Monday morning and is one of the elements mandated in the long-delayed final rule for the 340B drug discount program. That rule, which took effect on Jan. 1, also adds monetary penalties for drug companies that overcharge hospitals in the program.

The final rule was first issued in January 2017 and was delayed five times by the Trump administration before going into effect this year. HRSA finally rolled out the rule as it determined the provisions would not interfere with the administration’s broader drug pricing policy

Provider groups and 340B advocates cheered the website’s launch. Maureen Testoni, CEO of 340B health, a group that represents more than 1,300 providers participating in the program, said in a statement that the new tool’s release “marks a positive milestone in the history of the 340B program.” 

“Today’s launch of a secure website listing the maximum allowable prices for all 340B covered drugs brings a healthy dose of sunshine into a marketplace that has, for far too long, been a black box,” Testoni said. “Until today, hospitals, clinics and health centers participating in 340B had no way to be sure they were paying the correct amount for the drugs they purchase.” 

340B Health was joined by the American Hospital Association (AHA), America’s Essential Hospitals and the Association of American Medical Colleges on a lawsuit filed in September with the goal of pushing HRSA to implement the rule.

Tom Nickels, executive vice president at AHA, said in a statement that the group was “pleased” that its lawsuit led to the site’s launch.

“As prescription drug prices continue to skyrocket, the 340B program is as crucial as ever in helping hospitals provide access to healthcare services for patients in vulnerable communities,” Nickels said. 

Amid the drug price debate, the 340B program has been under the microscope. The program has enjoyed traditionally bipartisan support, but intense lobbying from the pharmaceutical industry has led to criticism that it has grown too large.

The Centers for Medicare & Medicaid Services also slashed the program’s payment rate in 2017, a shift in a longstanding Medicare policy that culled $1.6 billion in payments from the program. Hospital groups are currently battling the payment changes in court

 

 

Trump admin now backs elimination of ACA in court

https://www.healthcaredive.com/news/trump-admin-now-backs-elimination-of-aca-in-court/551319/

UPDATED: AHA blasted the decision, calling it “unprecedented and unsupported” by law or facts and warned it would lead to repeal of Medicaid expansion and gut protections for those with pre-existing conditions.

Dive Brief:

  • The Trump administration has reversed its stance on the Affordable Care Act, arguing in a court filing Monday that the entire law should be eliminated instead of just removing provisions protecting people with preexisting conditions.
  • The move came hours after Democratic attorneys general defending the ACA filed their brief arguing that the landmark law is still constitutional even without an effective individual mandate penalty. Both filings are in the Fifth Circuit following an appeal of a Texas judge’s decision from December declaring the law unconstitutional after Congress set the mandate penalty to zero in tax overhaul legislation. That decision was stayed pending appeal.
  • Industry groups lambasted the administration’s about-face. America’s Health Insurance Plans CEO Matt Eyles said in a statement the decision was, like the Texas ruling, “misguided and wrong.” He added the payer lobby “will continue to engage on this issue as it continues through the appeals process so we can support and strengthen affordable coverage for every American.” Federation of American Hospitals CEO Chip Kahn said in a statement the decision is “unfortunate but not unexpected considering [the administration’s] long-held views on the health law.”

Dive Insight:

Elimination of the ACA would be a particular blow for some payers that have found increasing profitability in the individual market. Centene and Molina have found success with the exchanges and have expanded their footprints.

It would also put major hospital chains in a bad spot. Companies like HCA, Tenet and Community Health Systems have exposure that could subject them to reduced patient volumes and more bad debt, Leerink analyst Ana Gupte said when the Texas ruling first came down.

Public support for the ACA has gradually increased over the years, and the latest polling from the Kaiser Family Foundation shows about 53% of respondents giving a favorable view and 40% unfavorable. Individual components of the law are even more popular.

The ACA, which just days ago marked its ninth anniversary, brought forth massive change in American healthcare. A repeal of the law would do the same, stripping insurance coverage for as many as 17 million people.

The Trump administration’s new stance presents an intensely stark contrast with the growing field of Democratic presidential contenders, who have shifted the healthcare conversation to the left as the 2020 field shapes up. Candidates have proposed various forms of Medicare for all as well as scaled back versions that still greatly expand government coverage.

It moves the DOJ away from even some Republicans. During last year’s midterms a few GOP candidates said they approved of the ACA’s most popular element — protection for people with preexisting conditions (although voting records didn’t necessarily back them up).

Most Democrats in Congress aren’t fully backing any single-payer model at the moment, but their support for the ACA is strong. Democrats in the House of Representatives are expected to announce a legislative package Tuesday that would strengthen the ACA by eliminating short-term health plans that don’t comply with the law and increasing subsidies for exchange plans.

Since the GOP’s quite public failure to repeal the law two years ago, efforts to do so through Congress have sputtered to nearly a halt. Instead, the Trump administration started chipping away at the law’s provisions. It cut the open enrollment period for ACA plans, as well as the advertising budget for promoting sign-ups, and stopped cost-sharing reduction payments to insurers.

More recently, HHS has bolstered short-term and association health plans that offer cheap but skimpy coverage not in line with ACA requirements. Analysts fear proliferation of these plans could draw young and healthy people away from the exchanges, jeopardizing the stability of the risk pool.

A Democratic-led House panel launched an investigation into short-term plans and is requesting documents from Anthem and UnitedHealth Group, among other companies.

The legal issue at hand is known as severability — the question of whether a single provision of the law, in this case the individual mandate, becoming unenforceable invalidates the entire statute. The mandate was also the key question in the original U.S. Supreme Court ruling allowing the ACA to move forward.

The high court has since lurched to the right, which is notable if the appeal on the Texas ruling reaches that stage, although that would likely be far down the road.

 

 

 

CEO of U of Maryland Medical System to take leave of absence amid scandal

https://www.beckershospitalreview.com/hospital-management-administration/ceo-of-u-of-maryland-medical-system-to-take-leave-of-absence-amid-scandal.html

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The president and CEO of Baltimore-based University of Maryland Medical System agreed to take a leave of absence, effective March 25, amid a scandal involving business deals between the system and several of its board members, according to The Washington Post.

Six things to know:

1. UMMS Board Chairman Stephen Burch announced the board’s unanimous decision March 21 to have President and CEO Robert Chrencik take a leave of absence. The system will also hire an independent accounting and legal firm to audit the board’s contracts, and the search for an independent third party will begin immediately.

“Over the past week, I’ve had the proper time to listen to concerns and reflect. The board and I am firmly committed to evolving our governance principles and operating with even more transparency,” Mr. Burch said.

2. John Ashworth, senior vice president of network development at UMMS and associate dean at the Baltimore-based University of Maryland School of Medicine, will serve as interim president and CEO of the 13-hospital system.

3. The leadership changes follow the resignations of three UMMS board members, including Baltimore Mayor Catherine Pugh. At least four other board members have taken a leave of absence. The deals have been sharply criticized by state lawmakers, including Gov. Larry Hogan.

4. Ms. Pugh resigned from the board after facing criticism for a $500,000 book deal she made with UMMS. A spokesperson for the mayor’s office said March 20 Ms. Pugh has returned $100,000 in profit to the health system because production on the books was delayed and they were not actually delivered to UMMS, which had planned to distribute the books to city schools.

5. Hours before Mr. Burch notified the public of Mr. Chrencik’s leave of absence, the Maryland House of Delegates unanimously fast-tracked a bill to overhaul UMMS’ 27-member board of directors, The Washington Post reports.

6. Amid the scandal at UMMS, The Baltimore Sun reviewed state disclosure and tax forms for several other health systems in the state and found at least five other systems have engaged in business deals with members of their board. The American Hospital Association’s guidance on the issue does not prevent such deals from taking place, but asks that leadership ensure “certain preconditions … to make sure that the organization’s interests prevail in the board’s decision-making.

 

FURTHER MEDICARE EXPANSION COULD DIMINISH HOSPITAL REVENUES, BUT ACTION REQUIRED

https://www.healthleadersmedia.com/finance/further-medicare-expansion-could-diminish-hospital-revenues-action-required?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_190321_LDR_FIN%20(1)&spMailingID=15334448&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1601649422&spReportId=MTYwMTY0OTQyMgS2

Medicare for All

Potential Medicare expansion plans would drastically impact the financial standing of health systems, though some may be more pragmatic solutions than others.


KEY TAKEAWAYS

Implementing Medicare for All as a single payer healthcare system is estimated to create a 22.1% negative impact on a mid-size regional provider’s net margin.

However, a voluntary buy-in plan, also known as ‘Medicare for more,’ might result in only a slight dip to the net margin compared to the status quo.

Regardless, some amount of legislative action regarding Medicare expansion will be necessary in the next five years, according to the study’s authors.

Hospital and health systems should remain aware of the financial impact that several Medicare expansion proposals could have on their respect organizations, according to a Navigant study released Friday afternoon.

Fresh off the 2018 midterm elections where healthcare played a critical role in the electoral shift that saw Democrats retake the House of Representatives, 2020 presidential candidates are heralding sweeping policy proposals to expand coverage through Medicare. 

While several versions of Medicare for All legislation exist, other policy proposals such as ‘Medicare for more’ or the public option have drawn consideration from lawmakers as potentially more viable or pragmatic solutions to America’s healthcare problems.

In its analysis, Navigant found a medium-sized, nonprofit, multi-hospital system with revenues of more than $1 billion and a current operating margin of 2.3% would endure vastly different financial implications under several proposed federal healthcare policy changes.

Medicare for All would reduce revenues by around $330 million, a margin drop of just over 22%, the public option proposal would cause revenue declines in the neighborhood of $153 million, a margin impact of -6.3%, and the ‘Medicare for more’ expansion plan is estimated to have a neutral impact compared to the status quo.

Still, Navigant’s study points out that if Congress does not act on Medicare expansion until after the next presidential election, hospitals could face a scenario with a financial impact comparable to the public option proposal.

Using the model health system as an example, status quo projections without any cost reduction initiatives would see the organization’s net margin decline from 2.3% to negative 6.2% from 2018 to 2023, with operating costs rising between 4.5% to 5% per year and revenues growing at 2.5% to 3% per year.

“There’s going to be a need to control hospital cost structures going forward, regardless of whether it’s in the status quo with baby boomers aging into Medicare and payer mix shifts occurring, or in a scenario that has limited expansion, moderate expansion, or robust Medicare for All,” Jeff Leibach, director at Navigant, told HealthLeaders in an interview. “There are obviously varying degrees of impact on hospitals, but all of them are going to require a level of attention and and management of revenue strategy and cost structure that I think hospital CFOs are struggling with today and will benefit from through continued focus on performance improvement and revenue strategy.”

PLANS, DETAILS, AND IMPACT:

‘Medicare for more’

  • Voluntary buy-in at age 50 and over
  • In one scenario, choice between employer coverage and Medicare
  • No Medicare payment relief
  • No reduction in revenue cycle management operations compared to the status quo
  • 15% reduction in current disproportionate share hospital payments

Public option

  • All lives covered regardless of age
  • Choice between employer coverage and Medicare
  • Range from no Medicare payment relief to payments at 110% of Medicare rate
  • 1.5% reduction in revenue cycle management operations compared to the status quo
  • 70% reduction in current disproportionate share hospital payments

Medicare for All

  • All lives covered regardless of age
  • Single payer healthcare coverage
  • Range from no Medicare payment relief to payments at 120% of Medicare rate
  • 2.5% reduction in revenue cycle management operations compared to the status quo
  • 100% reduction in current disproportionate share hospital payments

Leibach said that the analysis arrives at the early part of the conversation surrounding widespread Medicare expansion at the federal level, which makes it difficult to gauge how health system leaders will react to Navigant’s findings.

Some may be hesistant to support plans that are projected to create such a negative material impact on their respective bottom lines, but others may be willing to consider a policy proposal that significant decreases or even eliminates bad debt costs associated with a large uninsured population.

Even before the report was released, however, the American Hospital Association declined to voice support for Medicare for All late last month. 

Leibach added that he was surprised by the “nominal impact” of the voluntary buy-in plan, arguing that could hospital leaders may rally around that proposal as a compromise to expanding Medicare without fully deteriorating their financial standing.

This approach would also be the least disruptive to the commercial insurance market, according to Leibach, assuming that the Medicare for All proposal would be a true single-payer platform that eliminates private insurers.

 

 

 

 

Financial worries keep hospital CEOs up at night

https://www.healthcaredive.com/news/financial-worries-keep-hospital-ceos-up-at-night/546982/

Image result for ceo concerns

Dive Brief:

  • Financial challenges, including increasing costs, shaky Medicaid reimbursement, reductions in operating costs and bad debt, ranked No. 1 on the list of hospital CEO worries in 2018, according to an American College of Healthcare Executives poll.
  • Government mandates and patient safety and quality tied for second place in ACHE’s survey of top issues facing health systems. Workforce shortages came in third.
  • A little more than 350 execs responded to the survey and ranked 11 concerns their facilities faced last year. Behavioral health and addiction issues, patient satisfaction, care access, physician-hospital relations, tech, population health management and company reorganization filled in the remaining slots.

Dive Insight:

No matter which cog in the healthcare system one blames for the skyrocketing costs of healthcare (big pharma inflating the list prices of drugs; hospitals for upmarking services; insurers for leaving gaps in care resulting in surprise bills) consumers’ pocketbooks aren’t the only ones affected.

A separate American Hospital Association-backed study predicted health systems will lose $218 billion in federal payments by 2028, and private payers (whose dollars would normally help hospitals make up the difference) have been curtailing reimbursements as well.

Bad debt was another fear in the ACHE report. Uncompensated care costs peaked in 2013 at $46.4 billion and, though the figures have decreased slightly since then, hospitals shelled out $38.3 billion in 2016. Wisconsin alone was on the hook for $1.1 billion in uncompensated care in fiscal year 2017.

“The survey results indicate that leaders are working to overcome challenges of balancing limited reimbursements against the rising costs of attracting and retaining talented staff to provide that care, among other things,” ACHE president and CEO Deborah Bowen said in a statement.

Other financial concerns included competition, government funding cuts, the transition to value-based care, revenue cycle management and price transparency.

And 70% of hospital CEOs were worried about shifting CMS regulations in 2018, along with regulatory/legislative uncertainty (61%) and cost of demonstrating compliance (59%) — unsurprising, given the current administration’s track record of unpredictability.

Patient safety and quality of care was also top of mind for health system CEOs, with over half of respondents anxious about the high price of medications, involving physicians in the culture of quality and safety and getting them to reduce unnecessary tests and procedures.

Also of interest was the high rank given to addressing behavioral health and addiction issues, according to Bowen, which ranked fifth in its first year of being included in the survey. The topic has been front and center in the industry of late, in line with the increasing recognition of social determinants of health and the breakdown in silos of care.

Ranking of the issues has remained largely constant since 2016, though in 2017 more hospital CEOs were concerned about personnel shortages than patient safety and quality.

 

As Hospitals Post Sticker Prices Online, Most Patients Will Remain Befuddled

https://khn.org/news/as-hospitals-post-sticker-prices-online-most-patients-will-remain-befuddled/amp/

As of Jan. 1, in the name of transparency, the Trump administration required that all hospitals post their list prices online. But what is popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.

Anyone who has ever tried to find out in advance how much a hospital test, procedure or stay will cost knows the frustration: “Nope, can’t tell you” or “It depends” are common replies from insurers and medical centers.

While more information is always welcome, the new data will fall short of providing most consumers with usable insight.

That’s because the price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician’s charge, and more.

“I don’t think it’s very helpful,” said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. “There are about 30,000 different items on a chargemaster file. As a patient, you don’t know which ones you will use.”

And there’s this: Other than the uninsured and people who are out-of-network, few actually pay full charges.

The requirement to post charges online in a machine-readable format, such as a Microsoft Excel file, came in a 2018 guidance from the Trump administration that builds on rules in the Affordable Care Act. Hospitals have some leeway in deciding how to present the information — and currently there is no penalty for failing to post.

“This is a small step” toward price transparency amid other ongoing efforts, Centers for Medicare & Medicaid Services Administrator Seema Verma said in a speech in July.

But finding the chargemaster information on a hospital’s website takes diligence. Patients can try typing the hospital’s name into a search engine, along with the keywords “billing” or “chargemaster.” That might produce a link.

Even when consumers do locate the lists, they might be stymied by seemingly incomprehensible abbreviations.

The University of California San Francisco Medical Center’s chargemaster, for example, includes a $378 charge for “Arthrocentesis Aspir&/Inj Small Jt/Bursa w/o Us,” which is basically draining fluid from the knee.

At Sentara in Hampton Roads, Va., there’s a $307 charge for something described as a LAY CLOS HND/FT=<2.5CM. What? Turns out that is the charge for a small suture in surgery.

Which services, treatments, drugs or procedures a patient will face in a hospital stay is often unknowable. And the charge listed is just one component of a total bill. Put simply, an MRI scan of the abdomen has related costs, such as the charge for the radiologist who reads the exam.

Even something as seemingly straightforward as an uncomplicated childbirth can’t easily be calculated by looking at the list.

Comparisons between hospitals for the same care can also be difficult.

An uncomplicated vaginal delivery charge at the Cleveland Clinic’s main campus is $3,466.

Looking for that same information on the Minnesota Mayo Clinic’s online chargemaster page shows two listings, one for $3,030, described as “labor and delivery level 1 short” and the other for $5,236, described as “labor and delivery level 2 long.” But, what’s a short labor? What’s a long one? How is a patient who didn’t go to med school supposed to know the difference?

Also, those are just the charges for the actual delivery. There are also per-day room charges for mom and the newborn, not to mention additional charges for medications, physicians and other treatments.

To get at the total estimated charge, California requires hospitals to report charges for a select number of such “bundles” of care, called “diagnosis-related groups,” or DRGs, in Medicare jargon.

At the University of California-San Francisco’s hospital, for example, there are two chargemaster line items for vaginal childbirth: One is $5,497 and the other is $12,632. But there’s no indication how these differ. Consumers might then turn to the “bundled” cost based on those DRGs, where the ancillary costs are included. That lists the total charge for an uncomplicated childbirth at an astounding $53,184.

A UCSF spokeswoman said no officials were available to comment on this figure.

Though chargemaster rates are quite different from the lower, negotiated rates that insurers pay, they do become the basis for what patients pay who are without insurance or who are treated at hospitals outside their insurer’s network. Out-of-network patients are often surprised when they get what are called “balance bills” for the difference between what their insurer pays toward their care and those full charges.

Still, even knowing chargemaster rates “would be entirely unhelpful” in fighting a high balance bill, said Barak Richman, a law professor at Duke University who has written extensively about balance bills and hospital charges.

“Chargemasters are enormous spreadsheets with incredibly complicated codes that no one short of a billing expert would be able to make sense of,” he said.

Nevertheless, some experts say that merely making the charges public shines a light on the often very high — and widely varying — prices set by facilities.

Even if those charges are only “what hospitals would like to receive,” posting them publicly could make hospitals “totally embarrassed by the prices,” said Anderson at Hopkins.

Billing expert George Nation, a finance professor at Lehigh University, said that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers. Hospitals generally would oppose that, saying negotiated rates are a trade secret.

It’s unclear that the lists will have much impact. “It’s been the norm here in California for over a decade,” said Jan Emerson-Shea, vice president of external affairs for the California Hospital Association. Even so, “from a practical standpoint, I’m not sure how useful this information is,” she said. “What an individual pays to [the] hospital is going to be based on what their insurer covers.”

That could include such things as the annual deductible, whether the facility or physicians involved in the care are in-network and other details.

“The hospital piece is just a small piece,” said Ariel Levin, senior associate director for state issues at the American Hospital Association.

Still, “the biggest concern is it falls short of that end goal because it really doesn’t help consumers understand what they are going to be liable for,” she said.

 

 

 

 

Federal judge says HHS overstepped authority in cutting 340B payments

https://www.fiercehealthcare.com/hospitals-health-systems/federal-judge-says-hhs-overstepped-authority-cutting-340b-payments?mkt_tok=eyJpIjoiTnpBNE1HTmtObUl3WVRkayIsInQiOiJFOU1xMDRPMGtzMCtnWXU4MExUVFAzZ3Jrdm5cL2s3S1dMRkVldTRWS2QyNmJZU255UWRIWW14QmtXVkJ2T2VTeGpYTVBvQXZWWW1JVnB0S0crTXV3aFhDS0wrY3NzTmtEYmJEMHdvSG03bGkxS2ZlREdiaWZydFZkbkdlXC9tTHE1In0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Drug prices

A federal judge has sided with hospitals in the ongoing battle over cuts to 340B drug discount payments, saying the Department of Health and Human Services’ rule slashing money to the program overstepped the agency’s authority.

District Judge Rudolph Contreras from the District of Columbia has issued an injunction (PDF) on the final rule, as requested by the American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals.

Contreras also denied HHS’ request for the hospital groups’ ongoing litigation against the 340B payment cuts to be dismissed.

The Centers for Medicare & Medicaid Services finalized the payment changes late last year, cutting the rate in 340B from up to 6% more than the average sales price for a drug to 22.5% less than the average sales price of a drug, slashing $1.6 billion in payments.

Hospital groups have warned that the cuts could substantially hurt their bottom lines, especially for providers with large populations of low-income patients. Higher cost for drugs in 340B could also lead to access problems for these patients.

Contreras said in his opinion (PDF) that the payment changes overstepped HHS’ authority.

Because the payment changes affect many drugs—any in the 340B program—and the payment cuts are a significant decrease, the agency bypassed Congress’ power to set those reimbursement rates with the rule, Contreras said.

But simply siding with the hospital groups could prove disruptive, he said, as retroactively adjusting payments and reimbursing hospitals for lost money over the past year would impact budget neutrality, requiring cuts elsewhere to offset the payments. So both parties will have to reconvene to determine the best way forward, Contreras said.

The AHA, AAMC and AEH issued a joint statement praising the ruling.

“America’s 340B hospitals are immeasurably pleased with the ruling that the Department of Health and Human Services unlawfully cut 2018 payment rates for certain outpatient drugs,” the groups said.

“The court’s carefully reasoned decision will allow hospitals and health systems in the 340B Drug Pricing Program to serve their vulnerable patients and communities without being hampered by deep cuts to the program.”

The case marks the groups’ second attempt at a legal challenge of the 340B cuts. A federal court rejected their initial appeal in July. 

An HHS spokesperson said in a statement emailed to FierceHealthcare that the agency is “disappointed” in Contreras’ ruling, but said it looks forward to addressing the judge’s concerns about potential disruption to payments.

“As the court correctly recognized, its judgment has the potential to wreak havoc on the system,” the agency said. “Importantly, it could have the effect of reducing payments for other important services and increasing beneficiary cost-sharing.”

Chip Kahn, president of the Federation of American Hospitals, said Contreras’ ruling puts lowered drug costs, that benefit all hospitals, at risk.

“The DC Federal District Court’s ruling to stop reforms to Medicare payment for drugs acquired under the 340B drug discount program is unfortunate because it undermines HHS efforts to cut drug costs and promote fairer payments,” Kahn said in a statement.