Last-Ditch Effort By Republicans To Replace ACA: What You Need To Know

http://khn.org/news/last-ditch-gop-effort-to-replace-aca-5-things-you-need-to-know/

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Republican efforts in Congress to “repeal and replace” the federal Affordable Care Act are back from the dead. Again.

While the chances for this last-ditch measure appear iffy, many GOP senators are rallying around a proposal by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.), along with Sens. Dean Heller (R-Nev.) and Ron Johnson (R-Wis.)

They are racing the clock to round up the needed 50 votes — and there are 52 Senate Republicans.

An earlier attempt to replace the ACA this summer fell just one vote short when Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and John McCain (R-Ariz.) voted against it. The latest push is setting off a massive guessing game on Capitol Hill about where the GOP can pick up the needed vote.

After Sept. 30, the end of the current fiscal year, Republicans would need 60 votes ­— which means eight Democrats — to pass any such legislation because special budget rules allowing approval with a simple majority will expire.

Unlike previous GOP repeal-and-replace packages that passed the House and nearly passed the Senate, the Graham-Cassidy proposal would leave in place most of the ACA taxes that generated funding to expand coverage for millions of Americans. The plan would simply give those funds as lump sums to each state. States could do almost whatever they please with them. And the Congressional Budget Office has yet to weigh in on the potential impact of the bill, although earlier estimates of similar provisions suggest premiums would go up and coverage down.

“If you believe repealing and replacing Obamacare is a good idea, this is your best and only chance to make it happen, because everything else has failed,” said Graham in unveiling the bill last week.

Here are five things to know about the latest GOP bill: 

1. It would repeal most of the structure of the ACA.

The Graham-Cassidy proposal would eliminate the federal insurance exchange, healthcare.gov, along with the subsidies and tax credits that help people with low and moderate incomes — and small businesses — pay for health insurance and associated health costs. It would eliminate penalties for individuals who fail to obtain health insurance and employers who fail to provide it.

It would eliminate the tax on medical devices. 

2. It would eliminate many of the popular insurance protections, including those for people with preexisting conditions, in the health law.

Under the proposal, states could “waive” rules in the law requiring insurers to provide a list of specific “essential health benefits” and mandating that premiums be the same for people regardless of their health status. That would once again expose people with preexisting health conditions to unaffordable or unavailable coverage. Republicans have consistently said they wanted to maintain these protections, which polls have shown to be popular among voters.

3. It would fundamentally restructure the Medicaid program.

Medicaid, the joint-federal health program for low-income people, currently covers more than 70 million Americans. The Graham-Cassidy proposal would end the program’s expansion under the ACA and cap funding overall, and it would redistribute the funds that had provided coverage for millions of new Medicaid enrollees. It seeks to equalize payments among states. States that did not expand Medicaid and were getting fewer federal dollars for the program would receive more money and states that did expand would see large cuts, according to the bill’s own sponsors. For example, Oklahoma would see an 88 percent increase from 2020 to 2026, while Massachusetts would see a 10 percent cut.

The proposal would also bar Planned Parenthood from getting any Medicaid funding for family planning and other reproductive health services for one year, the maximum allowed under budget rules governing this bill. 

4. It’s getting mixed reviews from the states.

Sponsors of the proposal hoped for significant support from the nation’s governors as a way to help push the bill through. But, so far, the governors who are publicly supporting the measure, including Scott Walker (R-Wis.) and Doug Ducey (R-Ariz.), are being offset by opponents including Chris Sununu (R-N.H.), John Kasich (R-Ohio) and Bill Walker (I-Alaska).

On Tuesday 10 governors — five Democrats, four Republicans and Walker — sent a letterto Senate leaders urging them to pursue a more bipartisan approach. “Only open, bipartisan approaches can achieve true, lasting reforms,” said the letter.

Bill sponsor Cassidy was even taken to task publicly by his own state’s health secretary. Dr. Rebekah Gee, who was appointed by Louisiana’s Democratic governor, wrote that the bill “uniquely and disproportionately hurts Louisiana due to our recent [Medicaid] expansion and high burden of extreme poverty.”

5. The measure would come to the Senate floor with the most truncated process imaginable.

The Senate is working on its Republican-only plans under a process called “budget reconciliation,” which limits floor debate to 20 hours and prohibits a filibuster. In fact, all the time for floor debate was used up in July, when Republicans failed to advance any of several proposed overhaul plans. Senate Majority Leader Mitch McConnell (R-Ky.) could bring the bill back up anytime, but senators would immediately proceed to votes. Specifically, the next order of business would be a process called “vote-a-rama,” where votes on the bill and amendments can continue, in theory, as long as senators can stay awake to call for them.

Several senators, most notably John McCain, who cast the deciding vote to stop the process in July, have called for “regular order,” in which the bill would first be considered in the relevant committee before coming to the floor. The Senate Finance Committee, which Democrats used to write most of the ACA, has scheduled a hearing for next week. But there is not enough time for full committee consideration and a vote before the end of next week.

Meanwhile, the Congressional Budget Office said in a statement Tuesday that it could come up with an analysis by next week that would determine whether the proposal meets the requirements to be considered under the reconciliation process. But it said that more complicated questions like how many people would lose insurance under the proposal or what would happen to insurance premiums could not be answered “for at least several weeks.”

That has outraged Democrats, who are united in opposition to the measure.

“I don’t know how any senator could go home to their constituents and explain why they voted for a major bill with major consequences to so many of their people without having specific answers about how it would impact their state,” said Senate Minority Leader Chuck Schumer (D-N.Y.) on the Senate floor Tuesday.

CHI posts $585M operating loss in FY17

http://www.healthcaredive.com/news/chi-posts-585m-operating-loss-in-fy17/505184/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202017-09-19%20Healthcare%20Dive%20%5Bissue:12065%5D&utm_term=Healthcare%20Dive

Click to access CHI%20Annual%20Report%20Period%20Ending%20June%2030%202017.pdf

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Dive Brief:

  • Catholic Health Initiatives reported a $585.2 million operating loss for fiscal year 2017, ended June 30, up from $371.4 million in 2016.
  • Non-operating income was strong, however, reaching $713.6 million, versus a $204.2 million loss the previous year. The performance benefited from investments of nearly $640 million, according to CHI’s 2017 annual report.
  • Overall, CHI saw a net surplus of $128.4 million — a welcome result after last year’s net loss of $575.7 million. Total operating revenue for 2017 totaled $15.5 billion.

Dive Insight:

CHI has made strides toward getting back on sound financial ground, officials said in a statement, but challenges remain, particularly in some markets.

During the year, CHI divested its KentuckyOne facilities, a move expected to bring in $534.9 million. The system also transitioned operations, management and control of University of Louisville Medical Center back to the university and sold nearly all of its Louisville area acute care operations.

The company said it has also found a buyer for Medicare Advantage plans, but added that uncertainty around the future of the Affordable Care Act has delayed the sale of its QualChoice Health commercial insurance segment.

The Denver-based system is in talks with Dignity Health about a possible merger of their organizations. The non-for-profit hospital systems signed a nonbinding letter of intent to explore an affiliation in September 2016. San Francisco Business Times reported in June that the two organizations were in “final stages” of merger discussions.

Moody’s downgrades UPMC to ‘A1’

http://www.beckershospitalreview.com/finance/moody-s-downgrades-upmc-to-a1.html

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Moody’s Investors Service downgraded Pittsburgh-based UPMC from “Aa3” to “A1,” affecting $2.9 billion of debt.

In addition, Moody’s downgraded UPMC-Hamot’s bonds, which are parity obligations for UMPC, from “Aa3” to “A1.”

The downgrade is a result of several factors including UPMC’s rapid expansion project, high execution risk following the acquisition of Harrisburg, Pa.-based PinnacleHealth and a new service area with high competition. Moody’s also acknowledged UPMC’s increased debt burden, below average financial performance and suppressed margins. Offsetting an additional notch downgrade is UPMC’s strong market position, integration of various hospital acquisitions and core competency in acute care management.

The outlook is negative, reflecting Moody’s expectation that UPMC’s rapid expansion may pose financial and cultural stress.

Novant Health sees operating income drop 32.3%

http://www.beckershospitalreview.com/finance/novant-health-sees-operating-income-drop-32-3.html

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Winston-Salem, N.C.-based Novant Health saw operating income drop 32.3 percent year-over-year in the second quarter of fiscal year 2017 to $39.7 million, according to unaudited financial documents.

The health system recorded a 2.2 percent year-over-year increase in operating revenue in the second quarter of this year, to $1.11 billion. However, the system saw operating expenses increase 5 percent year-over-year to $994 million.

Including expenses, Novant saw net income drop 2.8 percent year-over-year for the second quarter ended June 30 to $83.9 million.

Becker’s Hospital Review reached out to Novant Health for further explanation of its second quarter financial performance. The system did not provide any additional information.

Exposure Draft: U.S. Not-For-Profit Hospitals andHealth Systems Rating Criteria

https://www.fitchratings.com/site/re/895646

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Fitch Ratings has proposed rating criteria changes for nonprofit hospitals and health systems.

Here are five things to know.

1. Fitch said the proposed criteria changes include introduction of revenue defensibility, operating risk and financial profile rating factors as well as individual assessments for each of those factors.

2. Other proposed criteria changes from Fitch include “financial profile alignment with business profile in rating assessment; forward looking consideration of the impact of existing or needed capital investments that may increase financial leverage; and introduction of FAST, an issuer specific scenario analysis tool measuring investment portfolio stress linked to asset allocation, stress on revenue and cost growth rates.”

3. The overall goal with the proposed criteria changes is “to communicate Fitch’s credit ratings more clearly and better express the characteristics that affect a credit’s relative resilience in changing economic conditions,” said Fitch Senior Director Kevin Holloran.

He added, “Fitch believes that this will facilitate a more forward-looking approach to ratings and will better highlight differences among credits within the same rating category.”

4. The agency said it anticipates “fewer than 15 percent of ratings will be affected, with a roughly equal mix of upgrades and downgrades” as a result of the proposed criteria changes.

5. Fitch is accepting comments on the proposed criteria changes via email until Oct. 20. The full Fitch report on the proposed criteria changes is available here.

Storm Harvey could financially hurt already strained Houston hospitals

http://www.reuters.com/article/us-storm-harvey-healthcare/storm-harvey-could-financially-hurt-already-strained-houston-hospitals-idUSKCN1B92T2

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Structural improvements over the last decade to Houston hospitals have helped them so far to avoid devastation like Hurricane Katrina in New Orleans in 2005, but the pounding it is receiving from Tropical Storm Harvey is expected to financially hobble many already strained Texas medical centers.

The storm has forced hospitals to cancel surgeries, evacuate patients and contend with food and supply shortages. Even bigger challenges are expected in coming months when people who have lost homes and jobs avoid medical treatment or seek charitable care.

“A lot of hospitals already were burdened by uncompensated care…they were already struggling, and this will make things much harder,” said Vivian Ho, a healthcare economist at Rice University.

Rice has been temporarily closed because of the slow-moving storm that has killed at least 11 people since Friday and paralyzed Houston, the fourth most-populous city in the United States with a U.S.-census estimated 2.3 million.

Houston’s healthcare industry includes some of the most prestigious institutions in the country and has grown to accommodate a rising population in recent years.

But uncertainty about changes to U.S. health insurance policy, the region’s shrinking energy sector and Texas’ high percentage of uninsured have forced several Houston hospitals to cut thousands of jobs this year and post millions of dollars in losses, even before the storm.

Investment bank Jefferies warned in an Aug. 28 note that Harvey could have a significant impact on Texas healthcare providers, especially HCA Healthcare Inc, which has “11 percent of its beds in the areas impacted by severe weather.”

Texas Hospital Association spokesman Lance Lunsford said medical centers made significant improvements after buildings were damaged by Tropical Storm Allison in 2001.

Harvey broke rainfall records for the continental United States, with one site south of Houston recording 49.2 inches (1.25 meters) of precipitation.

Flooding prompted MD Anderson on Monday to cancel appointments and surgeries until Wednesday at the earliest, St. Luke’s Hospital closed one of its branches, and flooding at Ben Taub Hospital shut its food service.

MD Anderson on Monday told employees not part of its storm “ride out” team to stay home.

Roads around the cancer center’s main hospital were impassible, and a doctor posted photos of flooding that reached into the hospital lobby.

MD Anderson’s economic impact to the area is about $35 billion, according to its web site. Its 21 hospitals and affiliated institutions employ more than 106,000 people.

Highmark Health posts record 6-month performance with $505M operating surplus

http://www.beckershospitalreview.com/finance/highmark-health-posts-record-6-month-performance-with-505m-operating-surplus.html

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Pittsburgh-based Highmark Health, the parent company of insurer Highmark and Allegheny Health Network, reported an operating gain of $505 million in the first six months of fiscal year 2017, compared to $35 million the same period last year.

“Highmark Health delivered its strongest financial performance for the six-month period ending June 30 since the formation of Highmark in 1996,” Karen Hanlon, executive vice president and CFO of Highmark, said.

Highmark attributed its financial turnaround to improvements in its government health plan business, as well as its commercial and senior health plan segments. The company’s nealry 5 million-member health plan achieved an operating gain of $480 million in the six months ended June 30, up $399 million compared to the same period a year prior, mostly fueled by its government business.

On the provider side, Highmark’s Allegheny Health Network in Pittsburgh saw its strongest financial performance since its establishment. AHN recorded $28 million in excess revenue over expenses in the first six months of this year, an improvement of $47 million from the same period in 2016.

While intentional enrollment reductions decreased Highmark’s operating revenues year-over year by $100 million to $9.1 billion in the six-month period, at the same time the organization’s expenses dropped $50 million. Highmark attributed the decrease to reduced costs related to its Epic EHR and other technology implementations.

For-profit hospital operators likely to experience weak patient admissions through 2018

http://www.beckershospitalreview.com/finance/for-profit-hospital-operators-likely-to-experience-weak-patient-admissions-through-2018.html

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Major for-profit hospital operators were plagued by weak patient volumes in the quarter that ended June 30, and this trend is likely to continue through next year, according to Reuters.

Dallas-based Tenet Healthcare’s net loss ballooned from $44 million in the second quarter of 2016 to $56 million in the second quarter of this year. The company’s hospitals experienced softer patient volume in the second quarter of 2017, including fewer patients seeking elective procedures, according to Reuters.

Tenet’s rivals, such as Nashville, Tenn.-based HCA Healthcare and Franklin, Tenn.-based Community Health Systems also experienced weak patient volumes in the second quarter. HCA ended the second quarter of 2017 with net income of $657 million, which was down slightly from $658 million in the same period of 2016. CHS recorded a net loss of $137 million in the second quarter of this year, compared to a net loss of $1.43 billion in the same period of 2016.

Tenet, HCA, CHS and other for-profit hospital operators experienced a surge in admissions in 2014 and 2015 due to higher insured rates under the ACA. However, many insurers have pulled back from the ACA exchanges since last year, which has caused the for-profit hospital operators to see lower patient volumes, analysts told Reuters.

The companies are expected to see weak patient admissions next year, as the future of the ACA remains uncertain and patients with high-deductible health plans face soaring out-of-pocket costs.

Dr. Soon-Shiong’s NantHealth to cut 300 jobs as losses mount

http://www.beckershospitalreview.com/hospital-management-administration/dr-soon-shiong-s-nanthealth-to-cut-300-jobs-as-losses-mount.html

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NantHealth, a personalized medicine company led by billionaire Patrick Soon-Shiong, MD, will slash its workforce by 300.

The workforce reduction will occur through layoffs and transferring some staff to Allscripts Healthcare Solutions, according to NantHealth’s second quarter earnings release. Allscripts enteredinto an agreement Aug. 3 to buy NantHealth’s provider and patient engagement solutions business.

NantHealth said the workforce cutback and other steps taken by the company will result in $70 million in annualized cost savings.

NantHealth ended the first six months of 2017 with a net loss of $111.2 million, compared to a net loss of $87.3 million in the first half of 2016.

Aetna reports 52% surge in second quarter profit

http://www.healthcarefinancenews.com/news/aetna-reports-52-surge-second-quarter-profits?mkt_tok=eyJpIjoiWVdGallqTTBZVGRoTVdKaSIsInQiOiI4UXRNZDB6VUZ2MEtTbGhNbm9zZ3dnQys3Z2dkS2VYWDQyZlwvbkxtNEIxRlwvT085a056VlwvbjhweFlxOEFWUktZOGVMeWRTMm5BbCtCaE44T0VlOUNDdkRIQ1ZCRFpBd2NhK1NjZTJOaGFteHJjWEZDOTN5R2pDK3oxb2w4d0xvZSJ9

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CEO Mark Bertolini credits Medicare market, which he wants to expand in 2018.

Aetna’s government business in Medicare and Medicaid, and its exit from numerous Affordable Care Act exchange markets helped propel the insurer’s second quarter profits by 52 percent over last year.

Aetna reported second quarter profits of $1.2 million, compared to $791,000 for the same period in 2016.

“Specifically, operating results in our government business remain robust with government premiums representing more than half of the total healthcare premiums,” CEO Mark Bertolini said during the August 3 earnings call. “Medical cost trends remain moderate and we experienced favorable development of prior period healthcare cost estimates across all of our core products in the quarter.”

Helping to cut medical claims costs was a decision by the Hartford, Connecticut-based insurer to cut its participation in the ACA market from 15 states last year to a current four states.

In June, Aetna submitted bids to the Center for Medicare and Medicaid Services to expand Aetna’s reach from 56 percent of the Medicare population to 60 percent in 2018, according to Bertolini.

“As we discussed previously, our goal is to accelerate our geographic expansion in 2019 and beyond to serve more of this growing population,” Bertolini said. “Continuing on with our government business. Medicaid delivered another solid quarter, including stable revenue and underwriting results compared to the prior-year period, despite the exit from Missouri during the quarter.”

Aetna serves approximately 2.1 million Medicaid members, a decrease of approximately 250,000 compared to last year, due to its exit from the Missouri Medicaid program.

“Based on our continued outperformance, we are once again increasing our full-year 2017 earnings projections,” Bertolini said.