Ryan eyes push for ‘entitlement reform’ in 2018

http://thehill.com/homenews/house/363642-ryan-pledges-entitlement-reform-in-2018?utm_source=&utm_medium=email&utm_campaign=12524

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House Speaker Paul Ryan (R-Wis.) on Wednesday said House Republicans will aim to cut spending on Medicare, Medicaid and welfare programs next year as a way to trim the federal deficit.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview on Ross Kaminsky’s talk radio show.

Health-care entitlements such as Medicare and Medicaid “are the big drivers of debt,” Ryan said, “so we spend more time on the health-care entitlements, because that’s really where the problem lies, fiscally speaking.”

Ryan said he’s been speaking privately with President Trump, who is beginning to warm to the idea of slowing the spending growth in entitlements.

During his campaign, Trump repeatedly promised not to cut Medicare, Medicaid or Social Security.

“I think the president is understanding choice and competition works everywhere, especially in Medicare,” Ryan said.

House and Senate Republicans are currently working on their plans for tax reform, which are estimated to add more than $1 trillion to the deficit. Democrats have voiced concerns that the legislation could lead to cuts to the social safety net.

Ryan is one of a growing number of GOP leaders who have mentioned the need for Congress to cut entitlement spending next year.

Last week, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said that once the tax bill was done, “welfare reform” was up next.

Sen. Marco Rubio (R-Fla.), last week, said “instituting structural changes to Social Security and Medicare for the future” will be the best way to reduce spending and generate economic growth.

Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, told Bloomberg TV that “the most important thing we can do with respect to the national debt, what we need to do, is obviously reform current entitlement programs for future generations.”

Ryan also mentioned that he wants to work on changing the welfare system, and Republicans have in the past expressed a desire to add work requirements to programs such as food stamps.

Speaking on the Senate floor while debating the tax bill last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said he had a “rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”

His comments were echoed by Ryan.

“We have a welfare system that’s trapping people in poverty and effectively paying people not to work,” Ryan said Wednesday. “We’ve got to work on that.”

 

AARP to Congress: Don’t Cut Medicare

https://www.aarp.org/politics-society/advocacy/info-2017/medicaid-medicare-tax-reform-fd.html?cmp=EMC-DSO-NLC-WBLTR—MCTRL-120817-F1-2613065&ET_CID=2613065&ET_RID=33152417&mi_u=33152417&mi_ecmp=20171208_WEBLETTER_Member_Control_Winner_251100_391403&encparam=rGtTYC48LtlDepUYFPD2E6KmzkAw6WgcgwvDlv37DZs%3D

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The tax bill would trigger an automatic funding cut in the vital program.

AARP Chief Executive Officer Jo Ann Jenkins called on congressional leaders Thursday to keep their promise to America’s seniors and prevent a large cut to Medicare that the tax bill now being debated on Capitol Hill would trigger.

The tax measure would result in a $1.5 trillion increase in the federal deficit over the next decade, according to the nonpartisan Congressional Budget Office (CBO). Such a deficit would prompt an automatic $25 billion cut to Medicare as soon as January because of the “pay-as-you-go” law, commonly referred to as PAYGO.

The law was designed to keep the deficit in check by requiring the administration to reduce spending in many mandatory federal programs if Congress enacts a law that increases the deficit but doesn’t provide offsetting revenue.

In a letter to Senate Majority Leader Mitch McConnell, Minority Leader Charles Schumer, House Speaker Paul Ryan and Minority Leader Nancy Pelosi, Jenkins reminded McConnell and Ryan that they had recently issued a statement promising that “we will work to ensure these spending cuts are prevented.”

In their statement, the Republican leaders pointed out that the PAYGO law has never been enforced since it was passed in 2010 and “we have no reason to believe that Congress would not act again” to forestall the cuts PAYGO would require.

Medicaid, Social Security, food stamps and some other social safety net programs are exempt from the PAYGO law. But Medicare and programs like federal student loans, agricultural subsidies and the operations of U.S. Customs and Border Protection are not exempt.

The law caps how much the government can trim from Medicare at 4 percent. That’s $25 billion the first year, according to CBO. The amount could be higher in subsequent years, depending on the size of the deficit and Medicare’s budget.

The reduction would affect the payments that doctors, hospitals and other health care providers receive for treating Medicare patients. Individual benefits would not be directly cut, but the reduction could have implications for the care beneficiaries receive.

“The sudden cut to Medicare provider funding in 2018 would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries,” Jenkins wrote. Health care providers might stop taking Medicare patients, she added, even as 10,000 older adults are enrolling in the health program each day.

In addition, Medicare Advantage plans and Part D prescription drug plans may compensate for the cuts by charging higher premiums or shifting more costs to beneficiaries in future years.

“Our members and other older Americans are counting on you to preserve their access to Medicare services, including their doctors and hospitals,” Jenkins wrote.

20 charged in $146M healthcare fraud scheme in Brooklyn

https://www.fiercehealthcare.com/antifraud/healthcare-fraud-scheme-164-million-brooklyn?mkt_tok=eyJpIjoiT1RZNE9HVmhObVZoTW1ReSIsInQiOiJJOVIwamhJUzZScW1XQVhjb09IakYzbWNrWVZcL1gzYlwvMm15RWllNnlxYlJkbzNoT09CblgwMWYrcVdXS2N4Q2tyeHBKa2hQeXBtRDNwQktDK0NSQ3NSOUpzRUV4VG91RjF1Z0lIdjZIK0NCaTY3UURTUHV2VnFxZzRHRjZlalJhIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Money, handcuffs and a stethoscope

Twenty people—four of whom are doctors—are facing charges related to a massive fraud scheme that bilked Medicare, Medicaid and other managed care organizations out of $146 million.

Prosecutors from the Brooklyn District Attorneys Office said the defendants ran an enterprise in which recruiters offered cash to low-income and homeless patients to get them to undergo a series of medically unnecessary tests at participating clinics.

They then allegedly billed publicly funded insurance programs for performing those tests and laundered the fraudulently obtained funds through the bank accounts of a series of shell companies in far-flung countries such as Taiwan and Lithuania.

Once that money reached the defendants, prosecutors said, they used it to buy expensive real estate—such as a $3.25 million apartment in downtown Brooklyn, New York—and fund shopping sprees at high-end stores like Hermes and Bulgari.

“This massive scheme, which provided no patient care at all, wasted millions of taxpayer dollars dedicated to Medicaid and Medicare,” Acting Brooklyn District Attorney Eric Gonzalez said in the announcement.

The investigation began following a referral from the Department of Health and Human Services Office of Inspector General. To uncover the alleged scheme, investigators employed undercover detectives, intercepted communications and conducted surveillance and financial analyses.

The defendants are facing charges including enterprise corruption, healthcare fraud, grand larceny and money laundering. Prosecutors said 35-year-old Kristina Mirbabayeva, of Brooklyn, was the ringleader of the scheme, and 53-year-old New Jersey resident Kevin Custis, M.D., was her business partner.

Another one of the doctors charged, 61-year-old Robert Vaccarino, was also employed as a New York Police Department surgeon, according to The Wall Street Journal. The police department said Tuesday that Vaccarino had been suspended.

At a news conference this week, representatives from the Brooklyn District Attorneys Office said the scheme was the biggest healthcare case in the office’s history, the article added.

In other antifraud news:

Prosecutors insist Florida eye doctor stole $136M from Medicaid

The attorney for Salomon Melgen, M.D., a Florida eye doctor who has been convicted of a $100 million Medicare fraud, argued at a sentencing hearing on Thursday that the government has only proven Melgen stole about $64,000.

Attorney Josh Sheptow said Melgen—who was charged separately with bribing New Jersey Democratic Sen. Bob Menendez—injected patients with then-experimental drugs that are now approved, the Associated Press reported. Sheptow suggested Melgen may have falsified billing statements to get around the fact that Medicare doesn’t pay for experimental treatments—so since the treatments were actually legitimate, the government didn’t lose money on paying for them.

But Assistant U.S. Attorney Alexandra Chase argued that the judge should accept the government’s estimate that Melgen stole $136 million, noting that even if he stole half as much, he would be eligible for a life sentence. Prosecutors are asking for a 30-year sentence.

 

CMS makes it official: Two mandatory bundled-pay models canceled

http://www.modernhealthcare.com/article/20171130/NEWS/171139986?utm_source=modernhealthcare&utm_medium=email&utm_content=20171130-NEWS-171139986&utm_campaign=dose

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The CMS has finalized its decision to toss two mandatory bundled-payment models and cut down the number of providers required to participate in a third.

Only 34 geographic areas will be required to participate in the Comprehensive Care for Joint Replacement Model, or CJR, according to a rulemaking released Thursday. Initially, 67 geographic areas were supposed to participate.

Up to 470 hospitals are expected to continue to operate under the model. That includes the CMS’ estimate that 60 to 80 hospitals will voluntarily participate in CJR. Originally, 800 acute-care hospitals would have participated under the program.

With so many hospitals getting a reprieve, the CMS estimates the model will save $106 million less over the next three years versus what it would have saved if CJR had remained mandatory for all 67 geographic areas. The model is now expected to save $189 million over those years instead of $295 million.

The rule comes weeks after the CMS finalized a proposal to allow knee-replacement surgeries to take place in outpatient settings. When the proposal was released in July, some questioned if it was an attempt to undermine the CJR model.

The CMS has also finalized plans to cancel the Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model, which were scheduled to begin on Jan. 1, 2018. Eliminating these models gives the CMS greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum, the agency said.

These cardiac pay models were estimated to save Medicare $170 million collectively over five years.

The agency acknowledged that some hospitals wanted the models to continue on a voluntary basis, as they had already invested resources to launch them, but said those arguments were not detailed enough for the agency to do so.

“We note that commenters did not provide enough detail about the hiring status or educational and licensing requirements of any care coordinator positions they may have created and filled for us to quantify an economic impact for these case coordination investments,” the CMS said.

On average, hospitals have five full-time employees, including clinical staff, tracking and reporting quality measures under value-based models, according to the AHA. They are also spending approximately $709,000 annually on the administrative aspects of quality reporting.

More broadly, the average community hospital spends $7.6 million annually on administrative costs to meet a subset of federal mandates that cut across quality reporting, record-keeping and meaningful use compliance, according to the trade group.

Ultimately, the CMS decided to not alter the design of these models to allow for voluntary participation since that would potentially involve restructuring the model, payment methodologies, financial arrangement provisions and quality measures, and it did not believe that such alterations would offer providers enough time to prepare for the changes before the planned Jan. 1, 2018 start date.

The CMS acknowledged that hospitals and other stakeholders have voiced concerns that the Trump administration may not be as committed to value-based care as the Obama administration, but it insists that’s not true. The CMS said the Trump administration just believes voluntary models are the better way to go.

“We take seriously the commenters’ concerns about the urgency of continuing our movement toward value-based care in order to accommodate an aging population with increasing levels of chronic conditions,” the agency said in the rule. “We continue to believe that value-based payment methodologies will play an essential role in lowering costs and improving quality of care, which will be necessary in order to maintain Medicare’s fiscal solvency.”

 

Paul Ryan says GOP aiming to cut Medicare, Medicaid spending

https://www.fiercehealthcare.com/cms-chip/paul-ryan-medicare-medicaid-spending-cuts?mkt_tok=eyJpIjoiWXpZMk5qaGtOVFkzWXpVNCIsInQiOiJrTmFEUmZER0J6WnNGSGNqcXpRWmI0cHNsbkxNZ3B1WU1Lb2dBZ0NIUGRISEZoOVEzeEhIMDUrczQwZ2hYWld2VW1SMk5EXC9tSk0wVk96QU9UUWFcL1JZZ093bHF2Mjh2RmpiaEU5enlyOEkzb2hKM0FZd3RMNVp3azhBV0Q3aVVnIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

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In further proof that Republicans are not giving up their push to enact major changes to healthcare policy, House Speaker Paul Ryan has signaled that the party will focus on cutting Medicare and Medicaid spending next year.

“We’re going to get back, next year, at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview with conservative talk show host Ross Kaminsky.

In addition to welfare, it’s the “healthcare entitlements”—Medicare and Medicaid—that are the major targets, Ryan said, reasoning that they are some of the biggest drivers of national debt, alongside military spending.

As evidenced by a 2015 tweet, President Donald Trump pledged as a candidate not to cut Social Security, Medicare or Medicaid, but the GOP’s legislative attempts to repeal the Affordable Care Act would have slashed Medicaid funding drastically.

Both the president and GOP lawmakers have pledged to revisit that legislation in 2018, and Ryan noted he’s making headway with convincing Trump to back Medicare cuts.

“I think the president’s understanding [that] choice and competition works everywhere in healthcare, especially in Medicare,” he said.

But while Ryan contended that entitlement reform was the logical next step after passing a tax bill that reduces revenue, Democrats don’t see it that way. They argue that Republicans only want to cut key government programs to make up for the fact that their tax bill is estimated to increase the deficit by at least $1 trillion over a decade.

Republicans’ tax bill will also have healthcare policy implications. The Senate’s version of the bill repeals the Affordable Care Act’s individual mandate, and House conservatives have said they want that provision to make it into the final draft of the legislation.

Study: ‘Big five’ insurers depend heavily on Medicare, Medicaid business

https://www.fiercehealthcare.com/cms-chip/big-five-insurers-medicare-medicaid-growth-profits?mkt_tok=eyJpIjoiT0RnMFkySXdPV0psWldSaCIsInQiOiJQSllQNlpcL2RhTzBDZFwvZXh5M1ZUSDJyUU5JTGw3dnh1QTVac01rZUFcL2pNUUhhMXBaQjBxK29ScHRrOHhsT3d6aE5pcFRJUWd4Sm0rYXA4S0RYVGE2N0czN2hhc2hsXC9EZk9mSGVLR0V1UFlwVDZpQmdkcll0eTBMNDUzTHlIZDIifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Rising Stocks

Even as they’ve retreated from the Affordable Care Act exchanges, the country’s biggest for-profit health insurers have become increasingly dependent on Medicare and Medicaid for both profits and growth.

In fact, Medicare and Medicaid accounted for 59% of the revenues of the “big five” U.S. commercial health insurers—UnitedHealthcare, Anthem, Aetna, Cigna and Humana—in 2016, according to a new Health Affairs study.

From 2010 to 2016, the combined Medicare and Medicaid revenue from those insurers ballooned from $92.5 billion to $213.1 billion. The companies’ Medicare and Medicaid business also grew faster than other segments, doubling from 12.8 million to 25.5 million members during that time.

All these positive trends, the study noted, helped offset the financial losses that drove the firms to reduce their presence in the individual marketplaces. Indeed, the big five insurers’ pretax profits either increased or held steady during the first three years of the ACA’s individual market reforms (2013-2016). Their profit margins did decline during those three years, but stabilized between 2014 and 2016.

Not only do these findings demonstrate the “growing mutual dependence between public programs and private insurers,” the study authors said, but they also suggest a useful policy lever. The authors argued that in order to help stabilize the ACA exchanges, federal and state laws could require any insurer participating in Medicare or state Medicaid programs to also offer individual market plans in those areas.

Nevada has already done something similar: It offered an advantage in Medicaid managed care contract billing for insurers that promised to participate in the state’s ACA exchange. The state credited that policy with its ability to coax Centene to step in and cover counties that otherwise would have lacked an exchange carrier in 2018.

It’s far less certain, though, whether such a concept will ever be embraced at the federal level during the Trump administration, since its focus has been on unwinding the ACA rather than propping it up.

Either way, recent events underscore the study’s findings about how lucrative government business has become for major insurers. One of the main goals of CVS’ proposed acquisition of Aetna is to improve care for Medicare patients, which would help the combined company “be more competitive in this fast-growing segment of the market,” CVS CEO Larry Merlo said on a call this week.

Aetna CEO Mark Bertolini added that the transaction has “incredible potential” for Medicare and Medicaid members, as the goal is to provide the type of high-touch interaction and care coordination they need to navigate the healthcare system.

 

Outlook Darkens for Not-for-Profit Hospitals

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The revised outlook from Moody’s comes amid a larger-than-expected drop in cash flow this year and the ongoing uncertainty regarding federal healthcare policy for public and not-for-profit hospitals.

Moody’s Investors Service has downgraded from stable to negative its 2018 outlook for the not-for-profit hospital sector based on an expected drop in operating cash flow.

“Operating cash flow declined at a more rapid pace than expected in 2017, and we expect continued contraction of 2%-4% through 2018,” said Eva Bogaty, a Moody’s vice president.

“The cash flow spike from insurance expansion under the Affordable Care Act in 2014 and 2015 has largely worn off, but cash flow has not stabilized as expected because of a low revenue and high expense growth environment,” Bogaty said.

In a briefing released Monday, Moody’s said hospital revenue growth is slowing and is expected to remain slightly above medical inflation, which declined to a low of 1.6% in September. Hospitals can’t translate volume growth into stronger revenue growth because of the lower reimbursement rate increases across all insurance providers and higher expense growth.

In addition, rising exposure to governmental payers will dampen revenue growth for the foreseeable future due to a rapidly aging population and low reimbursement rates. Medicare and Medicaid, represent 60% of gross patient revenue in 2017, Moody’s said.

Key drivers of expense growth include rising labor costs, driven by an acute nursing shortage and ongoing physician and medical specialist hiring. Technology costs are also rising as systems are upgraded and IT staff is needed for training and maintenance. While the ACA’s arrival heralded a drop in bad debt from 2014-16, bad debt rebounded in 2017 and will continue to grow at a rate of 6%-7% in 2018, Bogaty said.

“Rising copays and use of high deductible plans will increase bad debt for both expansion and non-expansion states,” she said.

In the near-term, uncertainty regarding federal healthcare policy will have a marginal fiscal impact on NFP hospitals. Bogaty said ambiguity surrounding the ACA does affect the planning and modelling of long-term strategies, while recent federal tax proposals will add to rising costs for hospitals.

The outlook could be revised to stable if operating cash flow resumes growth of 0%-4%. A change to positive could result from expectations of accelerated operating cash flow growth of more than 4% after inflation, Moody’s said.