Federal Funding Bill Relaxes Medicare Loan Repayment Terms, Delays DSH Cuts

Federal funding bill relaxes Medicare loan repayment terms, delays DSH cuts

Source: Modern Healthcare, by Rachel Cohrs

House Democrats’ bill to extend funding for the federal government through mid-December included a provision that would relax repayment terms for COVID-19 Medicare loans.

CMS Administrator Seema Verma confirmed on Friday that the agency is delaying recoupment on the Medicare loans as lawmakers haggled over legislation to avoid a government shutdown weeks before an election. The bill would also extend funding for several Medicare and Medicaid policies including delaying cuts to disproportionate-share hospital payments until Dec. 11.

Hospitals have implored Congress to forgive or relax repayment terms for $100 billion in COVID-19 relief loans that Medicare gave out in the spring. CMS was supposed to start recouping the funds by cutting off providers’ Medicare fee-for-service reimbursement starting in August, but has not yet begun doing so.

Foley & Lardner Partner Judith Waltz, who is a former assistant regional counsel at HHS, said congressional action soon would be the most efficient path to resolving the issue, as it would likely be difficult for CMS to refund provider payments if they start recouping funds and Congress relaxes the repayment terms afterward.

“If this doesn’t pass, I’m not sure what CMS’ next move would be. They can’t just leave this indefinitely,” Waltz said.
The Federation of American Hospitals, which has been a key stakeholder pushing for revisions to the Medicare loan program said it supports the changes in the new spending bill.

“The ongoing pressures of the current crisis required a revision of the repayment terms,” FAH President and CEO Chip Kahn said.

The American Medical Association also praised the move, as physician practices also were able to apply for the program.

“Upon passage of the Continuing Resolution, patients should know that their physician is more likely to weather the pandemic’s economic challenges. Congress recognized the danger, and rightfully modified the program so physicians can keep seeing patients,” AMA President Dr. Susan Bailey said.

House Democrats’ bill would give providers one year after the Medicare Accelerated and Advance Payment Program loan was issued before recoupment would begin, an extension from 120 days under current law. The recoupment rate would also be lowered from its current100% level to 25% for the first 11 months of repayment, and 50% for the six months afterward. Hospitals would have 29 months after payments to begin to pay back the funds in full before interest would begin to accrue. The interest rate would be lowered from the current rate of 9.6% to 4%.

The accommodations should be sufficient to allay concerns for most healthcare providers concerned about repayment, Waltz said, although she acknowledged some practices may still close.

The legislation also creates a new deadline for funding for several healthcare policies, including delaying cuts to Medicaid disproportionate-share hospital payments and extending funds for programs such as the Money Follows the Person demonstration, diabetes programs and community behavioral health clinics. The policies are currently set to expire on Nov. 30.

The new deadline creates a potential vehicle for a last-ditch effort to ban surprise medical bills post-election as senior GOP lawmakers who have advocated for reform face retirement.

Medicare Part B premium increases would also be limited in 2021.

Republicans, however, were rankled that farm aid money they wanted was left out of the legislation and Senate Majority Leader Mitch McConnell (R-Ky.) said the bill “shamefully leaves out key relief and support that American farmers need.”

Federal government funding expires on Sept. 30. The Senate is also set to soon begin a tense battle over the Supreme Court nomination that President Donald Trump is expected to announce as soon as late this week.

Verma: CMS Will Mull Which COVID-19 Flexibilities May Stick Around Post-Pandemic

Verma: CMS will mull which COVID-19 flexibilities may stick around post- pandemic | FierceHealthcare

Source: Fierce Healthcare, by Paige Minemyer

The Trump administration has rolled out a slew of policies aimed at offering greater flexibility to payers and providers amid COVID-19. But what changes are likely to stick around long-term?

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma said the agency will comb back through its policymaking under the pandemic and consider which, if any, of the changes will stick around once the country emerges from that situation.

The administration has heard plenty of positive feedback from payers and providers around the adjustments, particularly around easing access to telehealth, Verma said Monday during a fireside chat at Fierce Healthcare’s Virtual Series on Medicare Advantage.

“I think the reviews have been that the plans have really appreciated the flexibility, especially around telehealth and being able to have those midyear benefit changes,” Verma said.

While she didn’t offer a definitive list of where the administration intends to land on some of the flexibilities offered under COVID-19, she said that updates to ease reporting requirements for the Medicare Advantage star ratings are unlikely to stay in place long-term.

Verma also addressed changes the agency has made to calculations for the star ratings, which will now include patient experience feedback and data such as their access to generic drugs and biosimilar products.

The goal, Verma said, is to arm Medicare beneficiaries with as many data as they need to make informed choices about their care and about whether traditional Medicare or Medicare Advantage is the right route for them.

Providing them with additional plan-level specifics about supplemental benefits, provider networks and other key considerations is what drove the agency’s recent revamp of its Medicare Plan Finder, which was overhauled last summer ahead of open enrollment for the 2020 plan year.

“I would say we want to build more transparency into the system,” she said.

Verma also said that the administration is expecting a strong open enrollment period for Medicare Advantage this year, bolstered by CMS’ efforts to increase competition and expand benefit choices for beneficiaries.

She touted the fact that rates in the program have gone down over the past several years even as the agency has opened up new flexibilities for insurers to offer additional benefits.

“[Medicare Advantage] really represents market based principles, where plans are competing on the basis of cost and quality for Medicare beneficiaries,” Verma said.

Pelosi: ‘Hard To See’ Democrats Supporting Less Than $2.2T In COVID-19 Aid

Pelosi: 'Hard to see' Democrats supporting less than $2.2T in COVID-19 aid  | TheHill

Source: The Hill, by Mike Lillis

Speaker Nancy Pelosi (D-Calif.) on Thursday said that she’s hopeful the parties will reach an agreement on the next round of coronavirus relief but suggested Democrats aren’t prepared to accept anything less than her last offer — $2.2 trillion — on a deal.

“When we go into a negotiation it’s about the allocation of the resources,” she told reporters in the Capitol. “But it’s hard to see how we can go any lower when you only have greater needs.”

The comments come as both sides are voicing some optimism that, after weeks of stalled negotiations, a bipartisan deal on an emergency coronavirus bill is possible before the November elections.

President Trump on Wednesday urged congressional Republicans to accept more emergency funding — the very thing Democrats have been demanding. And Pelosi spoke by phone later in the day with the administration’s chief negotiator, Treasury Secretary Steven Mnuchin, in search of a path forward. Yet the sides still appear to be far apart on the top-line spending number.

House Democrats had passed the $3.4 trillion HEROES Act in May but have since dropped their request to $2.2 trillion. Republicans have called for much less spending, initially proposing a $1.1 trillion package, then trimming that request down to $650 billion — a proposal that was soundly rejected by Senate Democrats last week.

Pelosi pointed out the odd dynamics of the negotiation: Democrats came down $1.2 trillion and, in response, the Republicans went down, too.

“We asked them to go up $1 trillion, instead they went down, not recognizing the need,” she said.

Pelosi noted that, because four months have passed since the HEROES Act was written, the nation’s public health and economic conditions have changed. She’s asked her committee heads to update the legislation to meet current needs, which in some cases are more severe than they were in May. She singled out the airlines, restaurants and other small businesses as particular targets for more emergency help.

“The needs have only grown since May 15. … So we’re going to have to reallocate some of that money so that we can meet the needs as we see them,” she said. “The fact is, we shouldn’t be going down because we have these needs, so that we can open up the economy.”

The Speaker noted that the federal government has already propped up Wall Street to the tune of trillions of dollars and accused Republicans of being reluctant to meet the needs of struggling workers.

“We don’t object to the stock market doing well, that’s for sure,” she said. “But why can’t we spend what it takes to shore up the middle class in our country?”

Most members of the House Democratic Caucus appear to support Pelosi’s hard-line negotiating demand for at least $2.2 trillion, noting that small businesses are flailing, millions of workers remain jobless and the number of coronavirus deaths is poised to hit 200,000 in the United States.

Yet a number of moderates are also agitating for a vote this month on another emergency aid package — even absent an agreement with Republicans. Such a vote, proponents say, would put pressure on GOP leaders to negotiate further while protecting vulnerable Democrats from campaign attacks that their party has done nothing since May to address the crisis.

Pelosi on Wednesday downplayed any internal divisions, saying all factions of the party simply want to unleash the funding to help their constituents.

When a reporter noted that some in her caucus are griping to the media about leadership tactics, she didn’t hesitate.

“Well, they don’t say it to me,” Pelosi said. “What they say is we need to have a solution.”

She later added: “You hear different things, but the fact is we want to have an agreement, and we will stay until we have an agreement.”

Trump Outpatient Drug Plan May Depend On Upending Buy-And-Bill System

Trump outpatient drug plan may depend on upending buy-and-bill system

Source: Modern Healthcare, by Rachel Cohrs

The Trump administration could move forward with a policy that ties Medicare payments for outpatient drugs to foreign prices by upending the buy-and-bill payment system, according to the administration’s draft plan.

President Donald Trump on Sunday signed an executive order calling for the HHS secretary to implement a rulemaking plan to tie Medicare outpatient drug payment to international prices. If the administration chooses to move forward with the regulatory process in an expedited manner before the November election, providers could be faced with implementation challenges.

The administration’s draft plan for a Center for Medicare and Medicaid Innovation demonstration, which was released in October 2018, would set Medicare Part B reimbursement based in part on drug prices paid in other countries. But the draft policy would only work if entities step up to fill a new middleman role to take on the financial risk of buying Part B drugs from manufacturers and selling them to providers. Provider participation in the demonstration as drafted would be mandatory, and cover 50% of Medicare Part B spending.

Sunday’s executive order said the White House plans to shift to a more aggressive most-favored-nation policy where Medicare would pay the lowest price offered in countries with comparable economies, and it could also change its plan to revolutionize the buy-and-bill system in a final rule.

The Obama administration tried to implement a similar plan to introduce middlemen into Medicare Part B, but the Competitive Acquisition Program failed. The Trump administration’s advance notice of proposed rulemaking left many questions unanswered about how incentives would be different for potential vendors, which could include group purchasing organizations, distributors, wholesalers, specialty pharmacies, manufacturers and individual or groups of physicians and hospitals.

Two unanswered questions about the vendor model would be how participating providers would be chosen and why vendors would take on the financial risk of participation, said Rachel Sachs, associate professor of law at Washington University in St. Louis.

Sachs said a new system would likely take time to implement. “The model relies for implementation on recruiting these private vendors and having them set up the necessary kinds of business arrangements they would need to implement this proposal,” Sachs said.

If the administration were moving at top speed, it could try to release a final rule on outpatient drug reimbursement before the 2020 election. Drugmakers have indicated they may sue to stop implementation, which could slow down the process.

Dr. Peter Bach, the director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes, said a vendor program has better odds of working in a demonstration like the Trump administration’s draft plan because the financial stakes are much higher in Medicare Part B than they were in the mid-2000s, and the draft demonstration would make provider participation mandatory. The administration’s draft plan also appears to be limited to a few high-cost drugs, which could make it easier to implement.

Adam Finkelstein, counsel at Manatt Health and former health insurance specialist at CMMI, said the administration is not legally required to issue a proposed rule before a final rule on its Part B policy. The speed of the regulatory process likely depends on how the Trump campaign intends to use the policy for political messaging considerations ahead of the election. The more quickly the adminstration moves ahead, Finkelstein said, it leaves the administration more vulnerable to legal challenges.

“They have a couple of pathways, and not all are guaranteed to work,” Finkelstein said.

Additionally, the Congressional Review Act requires a 60-day delay in the effective date for major rules, though that requirement can be waived in cases of the public interest, Finkelstein said.

The draft plan also proposes changing provider reimbursement for outpatient drugs from the current system that pays providers a percentage of the drug’s Average Sales Price to a flat fee. CMS said in the draft plan that the goal for the new payments would be to hold providers harmless to current revenue “to the greatest extent possible.” However, it’s possible that such a policy could affect various providers differently.

There are also practical considerations that could make a quick turnaround challenging, as providers already have a stock of the drugs on hand, Bach said. Jillanne Schulte Wall, American Society of Health-System Pharmacists senior director of health and regulatory policy, also voiced concern about the liability for hospitals if they don’t own the drugs they are providing, and compliance with drug supply chain documentation requirements.

If HHS decides to cut the vendor system from a final rule, it could leave hospitals to absorb the reduction in reimbursement.

“There is some wiggle room for a reduction in reimbursement, but that would (be) calamitous. It wouldn’t go forward,” Bach said.

A proposed rule on the administration’s outpatient drug policy has been under review at the White House budget office since June 2019. Trump’s executive order also called for tying Medicare Part D payments to foreign prices, but is unclear exactly how the administration could move forward with that policy.

Helping Employees Return to the Workplace: Leadership Tips

Helping Employees Return to the Workplace: Leadership Tips

Source: Carrier Management

With most of the world beginning to reopen after months of pandemic lockdown, it’s time for businesses to begin implementing their plans for re-entry to the workplace. Among the expert tips: ensure employee safety and emotional well-being, offer flexibility, and communicate effectively.

Employees Should Be Top Priority

While ensuring physical safety is key—with considerations such as scheduling, seating configurations, visitor policies, elevator usage, food delivery—organizations must also take care of their employees’ emotional and psychological health, says a recent article from Harvard Business Review.

HBR offered some advice for reducing employee anxiety:

  • * Make employee well-being your top priority. Employees need reassurance that companies will put their people first whenever possible, especially in difficult times.
  • * Share accurate, timely and transparent information. Engage in open dialogue with employees and be honest about the state of the business.
  • * Employees will feel more comfortable and secure at work if employers follow recommendations from the CDC and other trusted public health experts, such as keeping work areas clean and sanitized, instituting flexible sick leave policies and encouraging sick employees to stay home, and providing personal protective equipment like masks and hand sanitizer.
  • * Managers will need to take greater responsibility for employee well-being—familiarizing themselves with the warning signs of emotional distress, regularly checking in with staff, helping team members understand what is and isn’t within their control, and learning how to triage real-time issues.
  • * Offer flexibility. Many team members may still be caring for children or sick loved ones; others may be too anxious to return to work immediately. Companies that had success with remote work may want to consider either a full transition to work-from-home or at least a hybrid model.

Communication Should Be Clear and Inspiring

Recognizing and addressing the core human emotions of grief, loss and anxiety in the workplace is a chance to rebuild organizational health, productivity and talent retention, says McKinsey & Co.

  • * Leaders need to understand where people are mentally and prepare accordingly. Some will be enthusiastic about returning to the office, while others will not want to venture back yet. Still others may want to re-enter in theory but worry about risks to their health and the safety of their loved ones.Survey employees regularly so you know which camp they fall into.
  • * Leaders need to invest time in cultivating open, compassionate conversations about what has been lost in the pandemic. They should validate that there is an emotional impact and that it can be a topic of discussion in the workplace. Efforts must be authentic—acting empathetic without showing true compassion can make things worse.
  • * Recognize the power of ritual. Rituals create a sense of familiarity and reassurance, reduce stress, and can help mark a new phase in an organization’s life. McKinsey recommends nominating a specific date, or timeframe, that the organization will collectively treat as the start of the “next normal” and around which rituals can be enacted.
  • * Leaders can use this moment to define and demonstrate a common sense of purpose with employees, who will be looking for leadership and ways to engage themselves. Share execution plans broadly with staff to solicit input and engage them on the challenges the organization faces.

How Companies Are Getting Speedy Coronavirus Tests for Employees

How Companies Are Getting Fast Coronavirus Tests for Employees - The New  York Times

Source: The New York Times, by Noam Scheiber

As businesses try to recover from the pandemic’s economic blow while ensuring the safety of workers and customers, many have complained of two obstacles: access to coronavirus testing for their employees and long delays in receiving results.

But some have found a reliable workaround. Through a growing number of intermediaries, they can generally obtain test results in one to three days, often by circumventing large national labs like Quest and LabCorp that have experienced backlogs and relying on unused capacity at smaller labs instead.

The intermediaries occupied various corners of the health care galaxy before the pandemic, like offering treatment on behalf of insurance companies or providing employee access to human resources data. Now they are addressing what Rajaie Batniji, an executive at one of the companies, calls “a supply-chain optimization failure.”

“The bottleneck in the crudest terms is: Are you routing tests to processing labs that can process it immediately?” said Dr. Batniji, a physician and co-founder of Collective Health, which administers health plans for employers and created a separate testing and screening product during the pandemic. “That ends up being what slows us down.”

Daniel Castillo, the chief medical officer of Matrix Medical Network, which is among the companies connecting businesses with laboratories, said the solution often meant turning to labs located where the spread of the virus was relatively contained.

“In some places there are spikes and perhaps testing issues; in other parts of the country there are not,” said Dr. Castillo, whose company works with health insurers to treat chronic conditions like diabetes and hypertension. “We might send a test across the country — fly it to Maryland from Arizona.”

While there is not limitless capacity for employers to test workers, Dr. Batniji, Dr. Castillo and others in the industry said significantly more could do so. Even Quest and LabCorp have said their average turnaround times have dropped significantly in recent weeks.

A program intended to catch infections before they result in outbreaks typically requires testing a substantial portion of people in a shared space once a week, if not more frequently, whether or not they have symptoms. Mike Boots, an epidemiologist at the University of California, Berkeley, said that such testing could be enormously beneficial, but that it must be combined with other measures, like distancing and contact tracing, to be effective.

For P.C.R. tests — which detect the virus’s genetic material and are the gold standard of accuracy — the process typically costs around $100 per test per person. Even less sensitive tests, which experts increasingly recommend as a screening tool, can add up, and most currently require special equipment and a health professional to administer them.

As a result, decisions about testing often reveal less about availability than about the economics of a business and the value it places on driving down workplace transmission.

Businesses for which an outbreak among employees would be extremely costly — possibly curtailing or halting operations — are generally the most likely to seek out tests.

“If there is a significant probability of a shutdown, it’s a no-brainer — you’re going to do everything you can privately to stop it,” said Jonathan Kolstad, an economist at Berkeley who has written about efficient means of mass testing and has set up a company to help promote it. “But in some cases, you don’t get a shutdown.”

In those cases, Mr. Kolstad and other economists said, employers are unlikely to carry out testing until it is cheaper and faster.

Cameron Manufacturing in upstate New York is putting a premium on employee testing. The company, which makes conveyor belts and other equipment for food and dairy processors, only briefly shut down because of the pandemic, but many customers delayed sales visits and installation work, wary of admitting outsiders.

“It’s affecting us revenue-wise,” Matthew Sharpe, the company’s chief executive, said in an interview in August. “We haven’t had major contracts canceled, but they’ve been pushed out into next year.”

So that month, Mr. Sharpe began regular P.C.R. testing for members of his sales and engineering teams, who typically travel to customers’ work sites. Workers are also tested before and after they travel to a “hot” state for work, which could otherwise require isolating themselves for several days upon returning. Mr. Sharpe said Cameron employees received test results through a website within 36 hours and could use the information to establish their health status to customers.

The company that built the site, Atlas ID, connected Cameron with a lab in Washington State that analyzed its tests. Atlas was founded in 2018 to give workers secure access to employment and income verification data, so they could share it easily with lenders and property managers. When the pandemic hit, it shifted its focus to employers in need of testing while building a network of labs to serve them.

Chip Luman, a co-founder of Atlas ID and its chief operating officer, said those relationships benefited smaller labs by offering steadier demand. “If I’m bringing in this partner that can guarantee me 100 tests every Monday from this employer, 500 from that one, they can look at capacity and plan business around that,” Mr. Luman said.

US BioTek, the lab near Seattle that handles Cameron’s tests, previously focused on allergy testing, among other services, but invested in new testing equipment during the pandemic.

Jack Frausing, US BioTek’s chief executive, said in an email that he had contacted Atlas on LinkedIn after reading about the company in the press. Mr. Frausing said US BioTek was able to provide results for over 95 percent of the samples it received within 24 hours and had the capacity to more than triple its test processing.

Other employers have begun regular testing of asymptomatic workers for similar reasons.

Some, like the meat processors Tyson Foods and JBS, have done so after outbreaks forced them to shut down facilities temporarily, and in the face of pressure from the United Food and Commercial Workers union. Representatives of both companies said they had begun testing to help protect workers.

Kate Maguire, the artistic director and chief executive of the Berkshire Theater Group, which went ahead with a production of “Godspell” this summer after two months of discussions with an actors’ union about safety protocols, said frequent testing of all the actors was indispensable.

“I didn’t know otherwise how to feel secure,” Ms. Maguire said. “If we had an outbreak, that would have been the end of us for a long time.”

But the flip side of this calculus, some economists said, is that employers who believe they can continue to operate even if a number of workers become infected will often forgo the expense of testing.

Zack Cooper, an economist at Yale’s School of Public Health, who contributed to a recent Rockefeller Foundation report on a national testing plan, said many businesses faced a key consideration: “If an employee gets sick, will they be able to bring someone else in to do their job?”

Some automakers, for example, have relied on an increase in temporary workers to deal with absences related to Covid-19, though they assert that the practice is unrelated to their decision to forgo wide-scale testing.

While the United Automobile Workers union has demanded such testing for months, several automakers have said it is not yet practical.

James R. Cain, a General Motors spokesman, said by email that until there was an accurate test that could deliver results very quickly, without the need for a lab, “mass testing will have limited if any value in helping G.M. prevent disease from getting into the workplace.” Mr. Cain added that the company was continuing to explore testing strategies but that its safety protocols, which include protective equipment and distancing, had been effective so far.

Mr. Kolstad of Berkeley and other economists say genuine uncertainty about the value of testing workers without symptoms — including about how often testing must occur and how quickly the results must be obtained to be useful — may lead employers to forgo testing.

The federal government has largely avoided providing employers with guidance on asymptomatic testing — the Centers for Disease Control and Prevention says such testing of workers “may be useful to detect Covid-19 early and stop transmission quickly” — which has created additional reluctance. The agency recently stopped recommending testing for people without symptoms in its guidelines for the general public, drawing criticism from experts.

Some employers may also worry that knowledge of infections they discover through testing could expose them to lawsuits from workers or customers if they continue operating.

Many experts argue that more widespread testing by employers will ultimately hinge less on capacity than on cost. They recommend greater use of tests that are less sensitive but faster and cheaper than P.C.R. tests, but those tests have experienced regulatory hurdles and other bottlenecks.

“If it was easy as taking a temperature,” said Lawrence Katz, a labor economist at Harvard, “then no doubt every employer and every office you went into would be testing people all the time.”

How Ruth Bader Ginsburg’s Death Could Jeopardize The Affordable Care Act

A woman wearing a mask writes a message in chalk in front of a painting of the late Associate Justice of the Supreme Court Ruth Bader Ginsburg on Sept. 19 in New York City. Ginsburg died on Sept. 18.

Source: The Washington Post, by Amy Goldstein

The death of Justice Ruth Bader Ginsburg injects fresh uncertainty into the future of the Affordable Care Act, as the Supreme Court prepares to consider anew the constitutionality of the law that has reshaped the United States’ health-care system in the past decade.

As the senior member of the court’s liberal bloc, Ginsburg was a reliable vote to uphold the ACA in the past and had been expected to do so when the high court reviews the law a third time in its coming term. The sudden shift in the court’s composition provides the latest lawsuit seeking to get rid of the health-care law a greater opportunity, though not a certain victory, while mobilizing Democratic and swing voters focused on the issue in the upcoming elections, according to legal scholars and political analysts

“Ginsburg’s death is the nightmare scenario for the Affordable Care Act,” said Nicholas Bagley, a University of Michigan law professor who supports the law. “If the suit had a trivial chance of success yesterday, it has a new lease on life.”

Friday night’s announcement that the justice had died of cancer is the latest twist along an uncommonly tortuous path for a major piece of social legislation. The ACA has been in peril in the courts and from President Trump and congressional Republicans since it was adopted by a Democratic president in 2010, becoming Barack Obama’s main domestic policy achievement. The newest legal challenge comes as polls were showing health care was a dominant issue in the November elections, even before the coronavirus pandemic removed millions of Americans’ jobs and health insurance and elevated people’s worries about whether they would have coverage if they got sick.

The Supreme Court is scheduled to hear oral arguments Nov. 10, a week after Election Day, in an ACA case with sharp partisan contours. It is based on a lawsuit that was initiated by a coalition of Republican state attorneys general and is supported by Trump’s Justice Department. Another coalition of mostly Democratic attorneys general is trying to uphold the law.

The case turns on different legal arguments than those from when the Supreme Court upheld the ACA in 2012 and 2015. The current case, California v. Texas, contends that the statute is unconstitutional because a 2017 change in federal tax law eliminated tax penalties for Americans who violate a requirement in the law that most people carry health coverage. The suit contends that if that part of the ACA is invalid, so is the rest.

The court’s eventual decision has stakes for the health-care system and Americans’ lives far beyond the insurance requirement, which has been moot since 2019. The most popular aspect of the law protects people with preexisting medical conditions from being frozen out of health insurance or charged higher rates. Democrats used this issue successfully in the 2018 midterm elections to win control of the House, and former vice president Joe Biden, the Democratic presidential nominee, has started running ads on this theme in the most competitive states.

Other aspects of the law include the expansion of Medicaid in 38 states and D.C.; insurance marketplaces created for people without access to affordable health benefits through a job; and federal subsidies for nearly 9 in 10 who buy health plans through those marketplaces. The law also fills in gaps in Medicare drug coverage, defines a set of essential health benefits that insurers must cover, requires some restaurants to list calories of menu items and compels many employers to create private spaces for mothers to nurse babies.

“In important respects, the ACA has become part of the basic plumbing of the U.S. health-care system,” Bagley said. “Ripping it out at this point would create enormous problems.”

Legal scholars across the ideological spectrum have regarded the case the Supreme Court plans to hear in November as legally weak. Still, it prompted a Texas district judge to invalidate the entire law in late 2018, though it remains in place during appeals. The New Orleans-based U.S. Court of Appeals for the 5th Circuit agreed late last year the insurance requirement is unconstitutional but sent back to the lower judge the question of whether the rest of the law could remain — or in legal parlance, could be “severed.”

On Saturday, scholars said they regarded the law’s survival chances as dampened with Ginsburg’s death. Assuming the court’s remaining three liberals vote to uphold it, they now would need to find two justices to join them — one more than if the late justice were alive to participate, said Timothy S. Jost, a retired law professor at Washington and Lee University.

Still, both Jost and Bagley noted that Chief Justice John G. Roberts Jr. and the Supreme Court’s newest member nominated by Trump, Brett M. Kavanaugh, have written recent opinions in cases involving other issues, reasoning that parts of laws could be invalidated while leaving the rest in place — a position that could preserve the other parts of the ACA even if the court rules the insurance requirement no longer being enforced as unconstitutional.

An anti-ACA law professor at Case Western Reserve University, Jonathan Adler, predicted that there are not more than four justices likely to go beyond the idea that the insurance mandate is invalid to striking down the entire statute. In that case, Ginsburg’s presence, had she lived, would not make a difference in preventing the whole law from being overturned.

The scholars said the outcome of the case is unlikely to be affected by whether the Senate confirms a successor to the late justice this year. If the court ended up in a 4-to-4 tie, that would preserve the lower court’s ruling striking down the insurance mandate, as would a 6-to-3 split reflecting a newly strengthened conservative majority of justices.

Unless a new justice is confirmed by early November, he or she would be unlikely to participate in the case, because the court’s practice is for justices to take part in decisions only when they have attended the oral arguments. Occasionally, the court has rescheduled oral arguments when it has not had its full complement of nine justices.

Assessing the political implications of Ginsburg’s death in light of the pending ACA challenge, Whit Ayres, a Republican pollster and political consultant, said voters opposed to the law are more likely to be motivated by the opportunity for Trump to choose a Supreme Court nominee with conservative views on social issues, such as abortion, than on health care.

Celinda Lake, a Democratic consultant who is a Biden campaign pollster, said polling for other clients this year suggests that Ginsburg’s death could prove useful to Democratic candidates up and down the ballot if voters perceive the law to be in jeopardy. Lake said polls suggest that Democratic voters had been concerned about whether candidates supported the health-care law but had not regarded it as in danger.

“It totally refocuses the debate,” Lake said, adding that polls show voters remain especially focused on preserving insurance protections for preexisting conditions, with many Americans fearing this year that they could be responsible for bills if they got cancer or were infected with the novel coronavirus.

Suburban women and older Americans, in particular, hold such views — both important constituencies in the November elections, she said. Women who are Independents, especially in rural areas, share these concerns, even though they may not be aligned with Democrats on expanding government-financed health care or other more liberal health-care issues, Lake said. “It gets us back to terrain that produces the biggest advantage for us,” she said of Democratic candidates.

Trump Administration Backing Off Medicaid Rule That States Warned Would Lead To Cuts

Trump administration backing off Medicaid rule that states warned would lead  to cuts | TheHill

Source: The Hill, by Jessie Hellmann

The Trump administration will not move forward with a proposed Medicaid rule that states, hospitals, insurers, patient advocates and members of both political parties warned could lead to massive cuts to the federal health care program for the poor.

“The proposed Medicaid Fiscal Accountability Rule (MFAR) was designed to increase transparency in Medicaid financing and ensure that taxpayer resources support the health care needs of our beneficiaries,” Centers for Medicare & Medicaid Services Administrator Seema Verma said in a statement Monday.

“We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study,” she added.

Verma said the rule is being withdrawn from the agency’s regulatory agenda, but it’s not clear if it will be added to future agendas.

The rule was intended to overhaul the complex payment arrangements states use to raise money for their Medicaid programs — funding that is then matched by the federal government.

The administration argues some states use questionable methods of raising funds so they can leverage more money from Washington. One approach used by states consists of taxing providers that stand to benefit from more Medicaid funds flowing into the state.

But governors and state Medicaid directors argue those long-standing arrangements are both legal and necessary as states look for ways to keep up with escalating health care costs.

Dozens of states wrote public comments to Verma, urging her to withdraw the proposal, including conservative states that are typically supportive of her work.

If finalized, the rule “would have forced states to face larger Medicaid shortfalls and to make bigger cuts harming beneficiaries and providers,” tweeted Edwin Park, a research professor at Georgetown University.

What Have Pandemic-Related Job Losses Meant for Health Coverage?

What Have Pandemic-Related Job Losses Meant for Health Coverage? | KFF

Source: Kaiser Family Foundation, by Cynthia Cox and Daniel McDermott

The coronavirus pandemic has caused a sharp increase in unemployment across the country. The unemployment rate peaked at 14.7% in April and remained above 10% until very recently. In the United States, health insurance and employment often go hand-in-hand: With the majority of working age adults receiving coverage through an employer-sponsored plan, people who lose work due to the pandemic also risk losing their health coverage when they might need it most. An earlier KFF brief, based on unemployment figures through the start of May, estimated that roughly 27 million people were at risk of losing their job-based coverage when they or family members lost their jobs. However, at the time, it was unclear what decisions employers were making about whether to keep their workers covered (e.g. by keeping furloughed workers on health plans or by helping employees pay for COBRA continuation coverage).

Data has now become available that provide a glimpse into what has happened to enrollment among employer plans since the start of the pandemic. Surprisingly, in comparison to the nearly 9% drop in employment from March to June, early data suggests that employers had kept coverage rates remarkably steady, at least through mid-summer. We examined data that insurance companies submit to the National Association of Insurance Commissioners, compiled by Mark Farrah Associates, finding that enrollment in the fully-insured group market dropped by just 1.3% from the end of March through the end of June.

Part of the explanation for this apparent discrepancy could be that many of the people who lost employment were never enrolled in employer-based coverage in the first place, as lower-wage workers are less likely to be covered by their employer’s plan. Even so, there are some reasons this 1.3% drop may even overstate employer coverage losses during the early months of the pandemic. For years, the fully-insured group market has gradually shrunk: While the 1.3% is the largest drop in recent years and is likely largely driven by job losses, over the last several years we have seen enrollment drops from the first to second quarter of the year ranging from 0.3% to 0.7% in the fully-insured market. Also, though we do not have data on self-funded plan enrollment rates, there are reasons to suspect the types of companies that self-insure (which tend to be larger companies) were better able to weather the early financial hits and might have had fewer job losses or might have been in a better position to let their employees retain their health benefits.

The relatively low coverage losses through the end of June are consistent with data showing growth in Medicaid enrollment through May and relatively flat Marketplace enrollment, not yet indicative of big losses in employer coverage. If there were large coverage losses in the employer market, we previously estimated that 85% would have been eligible to move to Medicaid or the ACA Marketplaces.

From discussions with employers and benefit consultants, we have heard that some employers elected to keep furloughed workers enrolled in health coverage. As the pandemic continues it’s unclear how long this can continue. Data from BLS show that temporarily laid-off workers made up the vast majority of the unemployed in the spring and early summer. However, temporary lay-offs have decreased, while the number of permanent job losses has increased through the summer. If this trend continues, we could see larger coverage losses later this year.

Are Hospitals Making Money Treating COVID-19 Patients?

Are hospitals making money treating COVID-19 patients?

Source: Modern Healthcare, by Tara Bannow

On HCA Healthcare’s second-quarter investor call, an analyst asked the for-profit chain’s chief financial officer an intriguing question: What’s the profitability of COVID-19 patients?

Posed to most other health systems, such a query would have sounded absurd. But the Nashville-based hospital giant had just posted $1.1 billion in profit, up 38% from the prior-year period, even as elective procedures were largely shut down.

Finance chief Bill Rutherford responded that coronavirus tends to prompt longer lengths of stay and higher acuity than typical hospitalized patients. “It’s too early to convert that to profitability,” he said. “Our focus is making sure we’ve got all the resources we need to care for those patients.”

Examples of wealthy health systems reporting higher 2020 profits, anecdotes of sky-high bills for COVID treatment and billions in federal grants have raised the question of whether a subset of well-performing hospitals are making money on their COVID books of business.

Most hospitals, though, appear to be losing money on COVID care, and that’s not counting the pandemic’s most detrimental effect: the plunge in profitable elective procedures. Hospitals’ divergent reimbursement experiences underscore the pandemic’s role in deepening the split between wealthy systems and their financially vulnerable peers.

Now, as the country heads into an expected second wave of the pandemic, hospital administrators need to keep trimming expenses while revenue lags and the federal government makes tough decisions about how to allocate aid with little information to go on.

Some experts are hoping HHS will consider financial need when allocating the remaining $57 billion in federal Coronavirus Aid, Relief, and Economic Security Act grants. So far, a little over half the Provider Relief Fund grants distributed have been based on prior revenue, with large, financially secure systems amassing hundreds of millions in aid.

“There is clear evidence that many hospitals that have done financially well historically, have good overall margins and hundreds of days cash on hand are getting millions in cash disbursements due to the revenue-based formula,” said William Schpero, an assistant professor of health policy and economics at Weill Cornell Medical College. “That money might be better used elsewhere, whether among hospitals that have been particularly hard-hit or that are financially vulnerable.”

A hospital’s true margin on COVID care will probably remain a mystery, experts say. That’s because the pandemic, unlike any other crisis that’s hit the industry, has come with a number of confounding factors that make it impossible to isolate the margin on treating seriously ill coronavirus patients. Most importantly, hospitals’ biggest source of revenue—nonurgent procedures—dropped out from under them, and there’s no telling when, if ever, it will completely return.

The crisis has sunk the margins of large systems like Mass General Brigham in Boston and Sutter Health in Northern California, but others, like Kaiser Permanente in Oakland, Calif., and ProMedica in Toledo, Ohio, are doing better than ever.

The 20% bonus

Aside from the grants, CMS is tacking on an additional 20% to its reimbursement for treating hospitalized Medicare patients with COVID. Medicare-age adults have seen the highest rates of COVID hospitalization. The bump has prompted conspiracy theories about hospitals wanting more COVID cases on their books to increase Medicare reimbursement.

“The COVID-specific impact is very, very difficult to quantify,” said Ge Bai, an associate professor of accounting and health policy and management at Johns Hopkins University.

One factor that makes determining margins so tricky is that so much of hospitals’ costs are tied up in fixed overhead expenses that would be difficult to allocate to a specific patient. Almost half—48%—of hospitals’ total operating expenses were overhead and capital costs in 2018, according to a recent Journal of General Internal Medicine study of about 3,500 hospitals.

Health systems prefer to discuss the pandemic’s effects in aggregate, without isolating the COVID book of business.

“They’re all unprofitable because we lost so much elective business and we have such a high fixed-cost infrastructure,” said Robin Damschroder, CFO of Detroit-based Henry Ford Health System. “You really have to look at the totality of the clinical operations of any health system.”

In normal times, there would be enough reimbursement to cover a hospital’s high overhead costs. But during the pandemic, the loss of volume and the added supply and labor costs associated with responding to the crisis has created “stranded overhead” that has nowhere to be liquidated, said Rob DeMichiei, a strategic adviser with data and analytics technology provider Health Catalyst and former CFO of UPMC.

“With that volume gone, there is all that overhead with very few cases to cover it,” he said. “There is really no amount of reimbursement on an individual case that’s going to be able to cover the direct costs, which it does cover, but also all this overhead.”

Experts are divided on the question of whether hospitals are generating a margin on their COVID patients. The point they agree on, though, is that no one can know for sure except maybe the hospital CFO, and even then, there’s a good chance he or she can’t be certain.

For Kevin Holloran, who covers not-for-profit hospitals at Fitch Ratings, the answer is an easy no. COVID is a “completely different animal” from other conditions, with some patients hospitalized for weeks or months. “I can’t see a way that anyone would say, ‘COVID patients are profitable for me’ in any way, shape or form,” he said.

When it comes to treating COVID patients who are uninsured or who rely on Medicaid, hospitals are unlikely to make money, as is their typical experience with those payers, said Dr. Ross Nelson, the head of KPMG’s healthcare strategy group.

Medicare’s 20% add-on payment for COVID patients could bump that margin into the black, Nelson said. But since Medicare pays a flat case rate per DRG, length of stay will be a big determinant of profitability. “My hypothesis is that the COVID patients that come in and stay for a week to a week and a half, at least on the Medicare and commercial side, they probably make some money on,” Nelson said. “As length of stay starts to extend beyond a week and a half or so, I think it’s too early to tell on that.”

Hospitals faced with more unknowns

Maimonides Medical Center, the largest hospital in Brooklyn, has treated north of 2,300 COVID patients. Leaders believe they broke even on commercial patients, using an estimated cost per patient, CEO Kenneth Gibbs said. Even with the 20% add-on, Medicare reimbursement covered about 90% of the cost of care. Medicaid covered about two-thirds the cost of COVID care, he said.

Gibbs said the struggle is just as much in front of providers as it is behind them. That’s because there will continue to be volume declines, and patients will still need to be isolated according to infection status. Basically, the cost per patient will be higher for the foreseeable future. “I think the challenges are unknown because the hit is ongoing,” Gibbs said. “The stress on the system may actually sort of be building, even though we’re past what feels like the core surge.”

For Henry Ford, the 20% Medicare add-on culminated in an additional $8 million on its Medicare claims related to COVID. Of the more than 10,000 COVID patients Henry Ford treated, 32% were covered by Medicare, including Medicare Advantage. But the bigger impact from Medicare was waiving the 2% sequestration, a reduction that usually happens annually, and postponing cuts to disproportionate-share hospital payments.

All told, that amounted to roughly $40 million for the health system, in addition to $328 million in federal relief grants in the first half of 2020. “Is it compensating for everything related to the cost of COVID? That’s a question yet to be answered,” Damschroder said.

Henry Ford reported $224 million in operating income in the first half of 2020, a 165% increase from the prior year and a strong 7% operating margin.

Private insurance payment rates are more than twice Medicare rates for the services most likely to be used by patients hospitalized with COVID, although Medicare’s 20% add-on payment will narrow that gap, a July analysis from the Kaiser Family Foundation found. With the 20% add-on, the average Medicare reimbursement for patients on a ventilator for more than 96 hours would have increased from $40,218—the average payment in 2017—to $48,262. Private rates would be roughly double that even with the 20% add-on, ranging from 1.8 to 2.1 times those of Medicare.

Federal aid allocations

Of the $175 billion originally allocated for Provider Relief Fund grants, a little over half has been distributed according to prior total patient revenue, suggesting HHS tried to replace revenue lost from suspending procedures. Another $22 billion went to hospitals that saw large numbers of COVID patients. Smaller amounts were targeted at safety-net hospitals, rural hospitals, skilled-nursing facilities and children’s hospitals.

Karyn Schwartz, a senior fellow with the Kaiser Family Foundation, said she agrees that knowing whether hospitals’ reimbursement for COVID treatment covers their costs could be helpful information for policymakers in determining how the remaining roughly $57 billion in Provider Relief Fund grants would be best allocated. “I think knowing how costly it is to treat these patients is important in terms of understanding how important it is to allocate the money that way versus something else,” she said.

Matt Hutt, an accountant who heads AAFCPAs’ healthcare division, said by his estimation, in order for Medicare’s 20% add-on payment to cover the cost of COVID care, it would have needed to be a 35% add-on. Going forward, he said it’s important to tie Provider Relief Fund grants to the losses providers are seeing on COVID care.

“That’s really what the funds should be used for: the impact that COVID had on your business,” he said.

The problem with that, however, is the numbers used to calculate margin can be “warped,” Johns Hopkins associate professor Bai said. While revenue from COVID treatment is clear-cut, the cost component is open to interpretation. Large, well-connected providers would likely hire savvy consultants to make their margins look worse than they are, she said. Instead, Bai said the decline in charges or outpatient claims would be a more objective way to distribute the money.

Even if, hypothetically, systems were making money on COVID patients but still losing money in every other aspect of their business due to lower demand, that would put the healthcare system in jeopardy, said Rick Kes, healthcare industry senior analyst with RSM. “The sustainability of our healthcare system is maybe the overriding issue.”

Opinions abound on how the remaining federal aid should be allocated. Michael Abrams, managing partner and co-founder of healthcare consultancy Numerof & Associates, said tying the disbursement to fee-for-service revenue, as has been done with much of the money so far, rewards providers who haven’t shifted toward value-based payment models. He thinks HHS should offer incentives for value-based payment with the remaining money.

“I just hate the idea of bailing out an industry that is increasingly on a course that departs from what the country needs,” Abrams said.

Last Updated 09/23/2020

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