AHIP Presses Congress, White House To Ramp Up Scrutiny Of Private Equity Provider Deals

AHIP presses Congress, White House to ramp up scrutiny of private equity  provider deals | Fierce Healthcare

Source: Fierce Healthcare, by Robert King

Health insurance trade group AHIP is calling for the White House and Congress to increase scrutiny of private equity control of providers, which the group worries could impact quality and costs.

 

The group earlier this week released letters sent to the White House and congressional leaders outlining parts of a new policy road map and priorities (PDF). Chief among them was more transparency surrounding private equity deals, which has grown in popularity across certain parts of the provider industry.

“While improving transparency of health care prices at the federal level has been a major focus, only the recent executive order related to nursing home care has applied to the activities of private equity entities of the health care marketplace, which have vastly different business models than other health care organizations,” the letter to President Joe Biden said.

AHIP wrote that there needs to be more transparency on private equity control of physician specialty groups and how the deals can impact quality and costs for patients.

The group noted in a white paper that back in 2018 private equity made up 45% of all health mergers and acquisitions. While initial deals applied to certain specialties like orthopedics and urology, AHIP said targets have expanded.

AHIP wants Congress to pass legislation that requires the public reporting of all private equity and hedge fund purchases of specialty groups and other providers such as emergency room physicians or ambulance providers. They also want the federal government to study any anticompetitive impact on the acquisition of providers by private equity firms.

 

Other key priorities in AHIP’s road map include:

  • * Advance use of site-neutral payments to ensure payments are the same no matter the site of care. The Centers for Medicare & Medicaid Services has cut Medicare payments in recent years to off-campus hospital clinics to bring the payments in line with those paid to physician clinics. But the effort led to a legal fight with the hospital industry.
  • * Support the expansion of home-based advance care via “value-based care and payment models,” the road map said.
  • * Remove barriers to telehealth access, which exploded in use since the onset of the pandemic; but, now, regulators are figuring out what to make permanent. AHIP wants the federal government to have network adequacy regulations to account for the availability of telehealth and to ban billing of “distant site facility fees for telehealth services.”

AHIP’s push to scrutinize private equity deals comes as the federal government has delivered more scrutiny of hospital merger deals. The Federal Trade Commission also launched a probe into physician practice acquisitions back in January 2021 to examine their impact on market competition.

Employers Pay Hospitals Billions More Than Medicare

How Much More Than Medicare Do Private Insurers Pay? A Review of the  Literature | KFF

Source: Axios, by Adriel Bettelheim and Caitlin Owens

Employers and private insurance plans in 2020 paid hospitals 224% of what Medicare paid for the same services, with rates for inpatient and outpatient care varying widely from site to site, a new report from RAND finds.

The intrigue: The report found that hospital prices had no significant correlation with hospitals’ share of Medicare and Medicaid patients, which hospitals say factor into private rates. Price did positively correlate with hospital market share.

Why it matters: Hospitals account for about 37% of health spending for the privately insured — and even people who don’t use hospital services foot some of the bill through their premiums.

The big picture: Annual per-person spending growth for workplace health coverage has exceeded spending growth for government programs in nine of the past 13 years, largely because enrollment and demand for services among the commercially insured has barely changed.

  • * The divergence in pricing has been linked to mergers and acquisitions, affiliation agreements and other consolidation that increases hospitals’ leverage.
  • * In 2021, the average premium cost of an employer-sponsored family plan was more than $22,000, an increase of 47% from 2011, according to the Kaiser Family Foundation.

What they found: The report draws on medical claims data from employers and state databases from 2018 to 2020 covering 4,102 hospitals and 4,091 ambulatory surgical centers that account for $78.8 billion of spending.

  • * States like Hawaii, Arkansas and Washington had relative prices below 175% of Medicare prices, while others including Florida, West Virginia and South Carolina had prices at or above 310% of Medicare levels.
  • * In 2020, COVID-19 inpatient hospitalizations averaged 241% of Medicare, which is similar to the relative price for all inpatient procedures.
  • * Prices for common outpatient services performed in ambulatory surgical centers such as imaging and colonoscopies averaged 162% of Medicare payments. However, Medicare pays the centers less than it pays hospital outpatient departments for the same services, the study notes, and the ratio would be lower if centers were paid the same way.
  • * Medicare per-procedure payments to hospital outpatient departments were 2.1 times higher than payments to ambulatory surgical centers and commercial payments were 2.6 times larger, the study found.
  • * If the same providers were paid Medicare rates for the same services, employers and private plans would have saved $49.9 billion, researchers said.

The other side: Hospitals say Medicare reimbursement rates are too low, so they have to charge privately insured patients more to make ends meet. The pandemic has also disrupted many hospital business models — for example, by forcing the cancellation of elective procedures.

The bottom line: Health costs are likely to keep rising for those with private insurance as employers use higher deductibles, copays and coinsurance to offset some of the rising costs.

  • * While employers back reforming how workplace health care is paid for, they don’t agree on many of the details or how significant changes would be.
  • * The more information about pricing disparities that becomes public, the more likely it is that pressure on hospitals to justify their prices will build.

Medical Malpractice Deal Could Replace Ballot Measure, Still Raise Monetary Awards

California 2022 ballot will be heavy on health careSource: CalMatters, by Ana B. Ibarra and Kristen Hwang

After years of multimillion-dollar battles over medical malpractice awards, California legislators  passed a deal increasing the monetary amount patients could claim in lawsuits while also averting a costly November ballot battle.

The deal, which passed both chambers with near unanimous votes, replaced a ballot measure with legislation raising the cap for a patient’s “non-economic damages,” or pain and suffering, although in a more incremental approach than the initiative would have.

“The legislative resolution we reached ends a decades-long political fight that pitted patients and families against insurance companies,” said Nick Rowley, trial attorney and author of the ballot initiative, in a statement.

It will be sent to the Governor’s desk for his signature.

Medical organizations have long contended that unlimited malpractice awards would drive up the cost of care and reduce the number of providers in the state. Thursday’s vote on gradual increases was hailed as a landmark measure to avert that outcome.

“This bill will help to ensure health care providers can keep their doors open while also balancing the financial needs of patients with health care related injuries,” said Lisa Maas, executive director of Californians Allied for Patient Protection, which represents medical organizations opposed to the ballot initiative, in a statement.

If signed, starting Jan. 1, 2023, cases not involving a patient death will have a new limit of $350,000, with an increase over the next 10 years to $750,000 and a 2% annual adjustment for inflation after that. Meanwhile, cases involving a death will have an increased limit of $500,000 that will grow over the next 10 years to $1 million, with a 2% annual increase thereafter.

Under current law, a $250,000 cap only applies to non-economic damages and Californians who suffer from medical malpractice can recover as much as they need for medical bills and loss of income.

“The two sides of the ballot measure campaign have committed to putting patients first, to prioritizing the stability of affordable access to health care, and to set aside differences to do what’s right for all Californians,” Dr. Robert E. Wailes, president of the California Medical Association, said in a letter sent to members.

In the letter, Wailes said his organization is working with Gov. Gavin Newsom’s administration and the Legislature to turn this new arrangement into law. “Under the agreement, the initiative will be withdrawn from the ballot and this watershed agreement will preclude another costly fight.”

In contrast, the ballot measure, known as the “Fairness for Injured Patients Act,” sought to increase the compensation cap for non-economic damages from $250,000 toabout $1.2 million. The measure was backed by families of injured patients, trial lawyers and the advocacy group Consumer Watchdog.

The ballot measure would have allowed a judge to exceed that cap if a patient died or suffered a “catastrophic injury,” meaning an injury that left them permanently disabled or disfigured.

Rowley, principal funder of the measure, told CalMatters taking the legislative route through Assembly Bill 35 secures a cap increase for patients and their families. The legislation would allow for multiple caps — one for a medical institution and another for a provider, for example. That means that in a case not involving a death, a patient could potentially hold multiple parties liable and receive more than $350,000, Rowley said.

“That’s a big change and that number is going to go up,” he said.

Rowley said he is ready to pull the ballot measure as long as the bill is signed as is. Newsom has until the end of June to sign.

The Medical Injury Compensation Reform Act, or MICRA, which first set a cap on malpractice payouts, was signed by Gov. Jerry Brown in 1975 during a special legislative session convened after the California Medical Association raised the alarm on skyrocketing malpractice premiums. At the time, Los Angeles doctors were told by insurers that their costs would increase five fold.

“This has been an issue since before I came to the Legislature,” said state Sen. Tom Umberg, one of the legislators carrying the bill. “I think MICRA needed adjustments some time ago…[but] it’s been difficult to achieve a compromise.”

In opposition to the ballot measure, a coalition of health providers argued that it would essentially have eliminated the cap and significantly increased the number of lawsuits filed in the state. They argued it would result in less resources for patient care and ultimately drive up the cost of health care.

Medical malpractice costs account for approximately 1% of total health care spending in the state, according to a Legislative Analyst’s Office analysis of an early version of the ballot measure. Raising or removing the cap is likely to increase overall health care spending though an exact dollar amount is hard to determine, the analysis states.

What this means for patients and their families

Charles Johnson, chairperson of the campaign in support of the ballot measure, lost his wife, Kira Johnson, in 2016 during a scheduled C-section at Cedars Sinai Medical Center. He sued the hospital and has a pending case.

The new limits, if passed, wouldn’t apply to his case, but he said he took on this role so that other families could seek legal representation and accountability.

“Lawyers told me time and time again that they couldn’t take my case because of these caps,” Johnson said. The $250,000 barely covers legal fees and families are often discouraged from going to court because they can’t afford it, he said.

“Medical malpractice is expensive to try,” he said. “You’re going to spend upwards of $100,000 just to go to trial.” Most families only go to court if they have the resources or if they can get an attorney to take their case pro bono, he said.

If it becomes law, this agreement would grant families the opportunity for justice, he said. “The financial part is just one piece of this…there is no number that will bring my wife back,” he said. “For these families, it’s about justice.”

Johnson said striking a deal with the opposition and enacting changes through legislation is the best solution for families.

Carmen Balber, executive director of Consumer Watchdog, a supporter of the measure, said the bill will fundamentally change patients’ access to justice when they are harmed by medical negligence.

“The reason it was on the ballot is because families are locked out of the courtroom; they have no access to accountability because of how low this cap is,” she said.

A long time coming

In 2014, a similar ballot measure to raise the caps on monetary awards was soundly defeated by a two-thirds vote.

Fighting these measures at the ballot box is an expensive endeavor, particularly when they’re brought before voters time and time again. The proposed compromise would avoid another costly fight. Already, Rowley’s measure has generated $23.2 million in contributions, with a bulk of the funds — $21.9 million — raised by opposition groups.

In recent years, special interest groups have successfully pressured lawmakers into enacting reforms by threatening high-priced ballot battles. Last year, three measures — including a soda tax ban, an internet privacy expansion, and a lead paint liability limit — were pulled from the ballot after similar deals were reached.

The 2014 medical malpractice ballot measure generated more than $70 million in contributions, with opposition industry groups — including insurers and physicians groups — raising the bulk of the funds, while attorneys funded most of the support.

Attempts to reform the original malpractice law in the Legislature have also repeatedly failed, and constitutional challenges to the law have been rejected by the state appellate and supreme courts. Earlier this year, the state Supreme Court ruled that the liability cap also applies to physicians assistants practicing under the supervision of a doctor.

Rising Google Searches For Procedures Suggest Recovering Demand, Analysts Say

Google Accused of Enabling Piracy With Images Search Feature | TimeSource: Healthcare Dive, by Nick Paul Taylor

Dive Brief:

  • * Searches on Google for 20 common, nonemergent procedures are above pre-pandemic levels, providing another data point that indicates demand is recovering, according to analysts at Needham.
  • * The analysts believe Google Trends data may indicate the level of consumer interest in certain procedures, leading them to track the resource to understand changes over time. U.S. searches for orthopaedic, general surgery and cardiovascular procedures were at 114%, 112% and 101% of their pre-pandemic levels, respectively, in the last analysis.
  • * Earlier analyses suggest the data may bode well for future sales at medical device companies. The data previously have correlated with medtech financial results, with slumps and rises in search numbers in step with drops and increases in revenue.

Dive Insight:

The most recent medtech industry earnings season was characterized by improving results. After struggling with the impact of omicron early in the year, many companies had a recovery in demand as the quarter progressed, leading some orthopaedic businesses to post sales that matched or topped pre-pandemic levels and businesses across the industry to report that the recovery continued into April.

Google search data potentially provides a window into what is coming next. The idea is that the search results show whether consumer interest is falling or rising and, in doing so, offer insights into future sales of medical devices.

The latest analysis found nonemergent procedure searches are up on both the pre-pandemic period, defined as the first seven weeks of 2020, and on a trailing 90-day basis. Over the 90 days through last week, Google searches for the 20 procedures tracked by the Needham analysts rose 8%, with hernia repair having the greatest improvement and nephrectomy faring the worst.

Searches related to orthopaedics, general surgery and cardiovascular procedures gained 12%, 6% and 9%, respectively, over the analyzed period. The figures are similar to the analysis covering the 90 days through the end of April, with orthopaedic searches decelerating by one percentage point and general surgery and cardiovascular gaining two percentage points and one percentage point, respectively.

The rise in orthopaedic searches over the past 90 days suggests the recovery in demand seen during the first three months of the year may have continued into the second quarter. Still, patient demand likely is just one of the forces that will shape results in the second quarter and after, company executives have said.

“We do expect that staffing pressure will continue to be a challenge throughout the year, just not as intense, I think, as what we thought when we started the year,” Zimmer Biomet CEO Bryan Hanson told analysts on a quarterly results conference call.

After the Pandemic Hit Nursing Homes Hard, California Lawmakers Push to Tighten Licensing Rules

Nursing home COVID copy 2_i.png

Source: Kaiser Health News, by Samantha Young

When Johanna Trenerry found a nursing home for her husband after his stroke, she expected his stay would be temporary.

He never came home.

Arthur Trenerry died at Windsor Redding Care Center in Northern California in October 2020. The 82-year-old great-grandfather is among more than 9,900 California nursing home residents who have died of covid-19.

The nursing home where Trenerry died is licensed by the state, but not under its current owner, Shlomo Rechnitz. The state denied Rechnitz a license, citing at least one death and multiple cases of “serious harm” at other nursing homes he owns or operates. To get around that, Rechnitz formed a business partnership with one of the home’s former owners, who continues to hold the facility’s license.

Some California lawmakers want to put an end to those types of business arrangements and ban people or entities from buying or operating nursing homes unless they have a license — which is the situation in most states. They’re also proposing an overhaul of the licensing process to reject applicants with poor performance and those without adequate experience or financial resources.

The ambitious effort, which the industry considers an overreach, could make California’s oversight the gold standard and a model for other states trying to improve nursing home care. Nationwide, more than 152,000 residents of nursing homes have died of covid during the pandemic, according to federal data.

“The public health emergency that we’ve experienced could be something that becomes a catalyst for making real change,” said Dr. Debra Saliba, a UCLA professor of medicine who served on a National Academies of Sciences, Engineering, and Medicine committee that released a comprehensive report on nursing homes in April. “One of the things that we have right now is the determination, the resources to make things happen.”

In his State of the Union address in March, President Joe Biden said the quality of care had declined in nursing homes taken over by investors — and vowed to set higher federal standards. In anticipation of the speech, the White House released a proposal calling on Congress to boost funding for nursing home inspections and to give federal regulators the authority to deny Medicare funds to underperforming facilities. The administration also directed the Centers for Medicare & Medicaid Services to propose minimum staffing standards within a year.

States are also taking steps to improve quality. New Jersey, for example, this year adopted a law that toughens penalties for health violations and requires nursing homes to disclose financial records.

In California, lawmakers are considering several proposals, including the changes to nursing home licensing rules.

Companies and individuals can buy or run nursing homes in California before they get a license, a process that even an industry lobbyist described at a legislative hearing this year as “backward” and unique to the state.

“In California, nursing home owners and operators can operate without a license even after they’ve been denied a license,” said state Assembly member Al Muratsuchi (D-Torrance), author of AB 1502. “Many of these owners and operators have, unfortunately, an extensive history of neglect and abuse.”

Muratsuchi’s bill would require an owner or company to apply for a license 120 days before buying or operating a nursing home and include financial records that contain the names of all owners and investors. The state would reject applicants who fail to meet standards for character, performance in other homes, and the financial ability to run the home. Homes operating without a license would lose Medicaid funding and couldn’t admit new residents.

The powerful California Association of Health Facilities, which represents more than 800 nursing homes, has blocked previous licensing legislation and has set its sights on Muratsuchi’s bill. The group is led by Craig Cornett, a veteran of the state Capitol who has worked for four Assembly speakers and two Senate leaders.

The organization has made just over $2 million in political contributions and spent $5.9 million lobbying lawmakers from Jan. 1, 2011, through March 31, 2022, according to records filed with the California secretary of state’s office.

The bill fails to consider the state’s “complex regulatory environments” and would create “extensive” disclosure requirements on ownership applications that “in many cases would fill an entire room with boxes and boxes of paper,” Jennifer Snyder, a lobbyist for the association, told lawmakers in January.

The measure would “eliminate the ability for most current owners in California to actually apply or even apply for a change of ownership,” she added.

But this year, the industry faces an altered political landscape.

Covid has pushed lawmakers to act — and Muratsuchi has gained a valuable co-sponsor for his bill, Democratic state Assembly member Jim Wood, head of the Assembly Health Committee. Wood has condemned nursing homes for not doing enough during the pandemic and has directed state regulators to conduct stricter oversight.

Muratsuchi’s measure has cleared the state Assembly and awaits a hearing in the Senate.

Investigations by news organizations CalMatters and LAist last year found that at least two California nursing home operators without licenses were running dozens of facilities even though officials at the state Department of Public Health had declared them unfit to do so.

The homes remain open, in large part because finding another nursing home for residents is incredibly difficult.

In July 2016, state regulators denied a license to Rechnitz — who had purchased the Windsor Redding Care Center, where Arthur Trenerry died — citing 265 health and safety code violations at his other facilities in the previous three years. Nevertheless, Rechnitz continues to operate the home in partnership with a former owner, Lee Samson, who is listed as a license holder in state records.

Mark Johnson, a lawyer who represents Rechnitz and his company, Brius Healthcare, said that Windsor Redding Care Center’s “license is in good standing” and that Rechnitz is managing the facility under an agreement “that is customary in the skilled nursing facility industry.” Rechnitz has filed a new and updated license application with the state, Johnson said.

Johanna Trenerry said she had no idea Rechnitz had been denied a license. Had she known, she said, she would never have placed her husband of 60 years at Windsor Redding.

Even before her husband caught covid, Trenerry and her children were trying to transfer him to another home because he seemed overly medicated, could no longer hold up his head, and fell numerous times trying to get out of bed, she said. Once, she recalled, the nursing home brought out the wrong person when the family visited.

They kept him “so drugged up,” said Nancy Hearden, one of the Trenerrys’ eight children. “And I think it was just because it was easier for them. He wasn’t getting to go to his rehab. I felt, ‘We’ve got to get him out of this place.’”

Then he got covid.

Sixty of the 84 residents at the facility came down with the disease in September 2020 — and at least two dozen of them died. According to a lawsuit filed by family members of 15 residents who died, including the Trenerrys, employees of the home were forced to work despite having covid symptoms. The lawsuit refers to state citations that found the home didn’t supply enough personal protective equipment to staffers, didn’t test staff, and placed covid patients and untested patients in the same rooms with residents who weren’t infected.

Johnson denied the allegations.

Leapfrog Group: Patients report worse hospital experiences during COVID-19 pandemic, raising safety concerns

Leapfrog sees 'significant' infection increases across its largest-to-date  release of hospital safety grades | Fierce HealthcareSource: Fierce Healthcare, by Dave Muoio

The latest batch of hospital patient safety ratings from the Leapfrog Group shows a general decline among “several” hospital safety measures concurrent with the onset of the COVID-19 pandemic, according to the healthcare safety watchdog.

 

Released Tuesday, the scores are accompanied by a report from Leapfrog that highlights a “significant” decline in the experiences of adult inpatients at acute care hospitals during the pandemic, with many areas “already in dire need” prior to the pandemic deteriorating even further.

“The healthcare workforce has faced unprecedented levels of pressure during the pandemic, and as a result, patients’ experience with their care appears to have suffered,” Leah Binder, president and CEO of the Leapfrog Group, said in a statement.

 
 

Leapfrog’s twice-annual reports assess more than 30 patient safety measures and component measures compiled from the Centers for Medicare & Medicaid Services (CMS) and Leapfrog’s hospital surveys between July 2018 and March 2021. The most recent release assigns letter grades to nearly 3,000 U.S. general hospitals and is the second collection of scores to incorporate safety and experience data from the COVID-19 pandemic.

This time around, Leapfrog assigned 33% of hospitals an “A,” 24% a “B,” 36% a “C,” 7% a “D” and less than 1% an “F”—a roughly equivalent distribution to those given in the fall.

Eight states had 50% or more of its hospitals receive an “A” grade, with North Carolina (59.8%) and Virginia (59.2%) leading the way.

 

On the other end of the spectrum, Wyoming, West Virginia, North Dakota and the District of Columbia had zero hospitals that received an “A” from the watchdog.

As before, Binder said that the “significant variation in safety performance” across different facilities underscores the need for public access to hospital assessment tools “so patients can make the best decision for themselves and their loved ones.”

Alongside the scores, Leapfrog placed a spotlight on patient experiences in a report comparing Hospital Consumer Assessment of Healthcare Providers and Systems Survey (HCAHPS) scores across more than 3,500 U.S. hospitals before (2019) and during (mid-2020 to mid-2021) the COVID-19 pandemic.

The group found statistically significant declines between the survey periods in the average percentage of hospital patients who gave the most favorable responses for nine of the 10 HCAHPS measures.

 

The greatest decline was seen among patients’ experiences with hospital staff responsiveness (a 3.7 percentage point decrease), followed by communication about medicines (a 2.9 point decrease), and cleanliness of the hospital (a 2.9 point decrease).

Leapfrog noted that these patient experience areas and others—like understanding care transitions (which already claimed the least favorable responses)—are directly tied to patient safety events and likely took a hit due to pandemic strains on the healthcare workforce.

“We commend the workforce for their heroic efforts these past few years and now strongly urge hospital leadership to recommit to improved care—from communication to responsiveness—and get back on track with patient safety outcomes,” Binder said.

The inpatient experience report is the second in a series of three such analyses from Leapfrog focused on patient experience during the pandemic. The first report, released in early April, focused on a decline in favorable patient ratings for communications about procedures across ambulatory surgery centers and hospital outpatient departments alike.

Leapfrog’s broader Hospital Safety Grade rankings are available online as a free resource for patients and their families. The organization said its analyses are independently assessed and peer-reviewed, with the methodology of the scoring available online for review.

The prior round of ratings highlighted “significant” declines in hospitals’ performance on preventable hospital-acquired infections. Those findings echoed similar concerns from patient experience intelligence firm Press Ganey and the Centers for Disease Control and Prevention.

KLAS: Hospitals Say Price Transparency Remains Too Confusing And Pricey To Implement

Hospitals say price transparency pricey to implement

Source: Fierce Healthcare, by Robert King

Hospitals and health systems believe a price transparency rule, while well-intentioned, is far too expensive to implement and is confusing, a new report found.

 

The report released Thursday from the health IT firm KLAS Research underscores major compliance issues surrounding a landmark rule that requires hospitals to post payer-negotiated rates for certain services in an easy-to-understand format. Compliance with the rule has been scattershot since it went into effect last year.

“There are concerns about cost, data accuracy and patient options of pricing tools; some respondents worry about patients’ ability to understand the displayed pricing data, and today, most patients are unaware online pricing information exists,” the report said.

Hospitals must offer clear pricing estimates for at least 300 shoppable hospital services and could face fines for each day of noncompliance.

KLAS spoke with 66 revenue cycle leaders to get a sense of how hospitals feel about the shift towards price transparency and the nuts and bolts of implementing the rule more than a year after its compliance deadline.

“Many hospitals comply only because they are required to by law and because they want to avoid monetary penalties,” the analysis said. “Additionally, organizations struggle to find resources to help with compliance because of the financial burden of investing in a regulation that doesn’t provide a return on investment.”

Throughout 2023, respondents say they are going to have to continually invest in new employees and technology to meet the mandate.

Among those surveyed, 52% said that the rule requires a significant number of resources to comply while 40% put resource requirements at a moderate level and 8% at a small number.

Many of the respondents lashed out at two parts of the rule: the requirement that facilities use machine-readable files for the pricing information and that they put online a master list of rates.

Respondents cited problems with “software used to publish the pricing information. Some say the published rates mainly benefit payer and provider organizations instead of patients.”

 

KLAS also explored how hospitals are looking to comply with the rule.

Third-party vendors were the most popular option, employed by 36% of respondents, while 28% who relied on their electronic medical record vendor. Only 18% relied on internal services and 18% were unsure.

The vendor that respondents most used for help was Epic, used by 16 of the revenue cycle leaders, followed by Experian Health with eight.

“Some who currently use a third party say they will consider moving to their EMR vendor’s platform in the future to further consolidate systems,” KLAS’ report said. “For example, some Epic EMR customers who use a third party for price transparency intend to move to Epic’s offering once it becomes more robust.”

report released back in February showed that one year after the rule’s implementation only 14.5% of hospitals are fully compliant with the rule. CMS has warned more than 300 hospitals about non-compliance.

And more than a year after it went into effect, KLAS’ survey shows that confusion around the rule still reigns.

“Many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward,” KLAS wrote.

Respondents say they don’t know what types of resources are going to be required in the future as “price transparency rules evolve or are interpreted differently.”

U.S. Hospitals Struggle to Absorb Pandemic-Era Rising Costs

Fitch: COVID-19 resurgence threatens nonprofit hospitals' margins, credit  ratings | Fierce HealthcareSource: Bloomberg, by Carey Goldberg

U.S. hospitals are struggling to absorb rising costs for labor, drugs and supplies as the pandemic drags on, the American Hospital Association said Monday in a report.

Labor costs per patient jumped by 19% in 2021 from 2019, and supplies rose by over 20% per patient during that period, according to the report. Nursing expenses shifted heavily toward travel nurses. The travelers’ share of nursing budgets rose to 39% in 2022 from 5% in 2019.

The federal government has allotted more than $170 billion to help hospitals through the pandemic, but many say they are still losing money, especially after the omicron wave earlier this year. HCA Healthcare Inc. cut its annual adjusted earnings forecast on Friday amid higher labor costs, sending shares 22% lower.

 

“The dramatic rise in costs of labor, drugs, supplies and equipment continue to put enormous pressure on our ability to provide care to our patients and communities,” AHA Chief Executive Officer Rick Pollack said in the statement. The association represents nearly 5,000 hospitals nationwide.

In Massachusetts, the state hospital association on Monday detailed its own financial woes, reporting that in January and February, as omicron hit, hospitals lost $430 million overall, despite federal relief money.

In January, 42 of 47 hospitals surveyed lost money and February was almost as bad, the Massachusetts Health and Hospital Association reported.  Governor Charlie Baker is proposing an additional injection of $250 million in federal money for distressed hospitals.

Arbiters To Expand Surprise Billing Dispute Resolution Reviews, CMS Says

Surprise Medical Bills: New Protections for Consumers Take Effect in 2022 |  KFFSource: Modern Healthcare, by Maya Goldman

Many Workers, Particularly at Small Firms, Face High Premiums to Enroll in Family Coverage, Leaving Many in the ‘Family Glitch’

Many Workers, Particularly at Small Firms, Face High Premiums to Enroll in Family  Coverage, Leaving Many in the 'Family Glitch' | KFFSource: Kaiser Family Foundation, by Gary Claxton, Larry Levitt, and Matthew Rae

The Biden Administration recently issued a proposed rule to make it easier for family members of workers offered health insurance at their jobs to qualify for premium tax credits for Marketplace coverage. The proposal aims to address what has been called the “family glitch”. Under the ACA, an individual enrolling in a Marketplace plan is not eligible for a premium tax credit if they are eligible for job-based coverage that is considered affordable and provides minimum value (i.e., covers at least 60% of health expenses on average). Current regulations provide that job-based coverage is considered affordable to a worker and their dependents if the cost of self-only coverage for the worker is less than 9.6 percent of family income, without regard to the cost of adding family members. The proposal would revise that interpretation by assessing the affordability of job-based coverage available for the family members of a worker by comparing the total cost for the whole family (including the worker) to the 9.6 percent threshold. This assessment would measure affordability for members of the family other than the worker. Affordability for the worker himself or herself would continue to be based on the cost of self-only coverage.

The proposed rule explains that the current interpretation leads to cases where family members are considered to have an affordable offer even when they face very high contribution amounts if they want to enroll in that coverage, which the agencies assert is not consistent with the ACA’s purpose of providing access to affordable coverage for everyone. We previously estimated that 5.1 million people are currently caught in this ‘family glitch’.

In this analysis, we use the KFF Employer Health Benefits Survey (EHBS) to look at the shares of workers that might pay significant amounts to enroll families and how these shares vary across firms. These are the workers most likely to benefit from a fix to the family glitch.

Health insurance is expensive. The average premiums in 2021 were $7,739 for single coverage and $22,221 for a family of four. The average contribution amounts for covered workers were $1,299 for single coverage and $5,969 for a family of four. Importantly, there was considerable variation around these averages: for example, ten percent of covered workers were enrolled in a plan with a premium of more than $29,000 for family coverage; and 12% of covered workers were enrolled in a plan with a contribution of at least $10,000 for family coverage. It is the family members of workers in firms with high contributions that are most likely to benefit from the proposed rule change.

Before looking at some of the characteristics of these firms and workers, we should be clear about what these percentages mean. When we say that 12% of covered workers are in a plan that has a worker contribution of at least $10,000, we are not saying that 12% of covered workers actually enroll in family coverage and pay those amounts. Instead, we are saying that 12% of covered workers work at firms where the contribution for a family of four for their largest health plan (or sometimes an average of several plans) is at least $10,000. Surveys do not collect information about all of the health plans each employer may offer, nor are they able to account for potential adjustments that might affect individual workers or families (smoking surcharges, discounts for filling out a health risk assessment, surcharge if spouse is offered coverage at another job). So, while these surveys cannot give precise results on actual costs, they give a pretty good picture of the magnitude of the costs workers face to enroll in the plans that most workers choose.

Workers in small firms face higher contributions for family coverage. Workers in small firms (3-199 workers) on average face higher contributions to enroll in family coverage and are more likely to face very high contribution amounts. The average contribution for a family of four in 2021 was $7,710 for workers in small firms, compared to $5,269 for workers in larger firms. Twenty-nine percent of covered workers in small firms faced a contribution of at least $10,000 for family coverage, compared to only 5% of covered workers in larger firms.

One reason family contributions may be higher in smaller firms is that some small employers only make a contribution toward the cost of self-only coverage, leaving the worker to pay the entire difference between the premium for self-only coverage and the premium for family coverage. Even in firms selecting less comprehensive coverage, this difference can be many thousands of dollars. We estimate that 19% of small firms offering health benefits make little or no additional contribution towards the cost of family coverage. These firms employ about 17% percent of the covered workers enrolled at small firms (3-199 workers).

Workers in the service industry are more likely to face high contributions for family coverage. Contributions for family coverage vary significantly by industry. Covered workers in certain industries are more likely to face high contributions for family coverage while covered workers in other industries (wholesale, transportation, communications, utilities, state and local government) are less likely.

The proposed rule addresses the eligibility for premium tax credits in situations where workers face unaffordable contribution amounts to enroll their family members in job-based coverage. Data from the KFF Employer Health Benefits Survey demonstrates that some workers face very high contribution amounts for family coverage, with 12% facing a contribution of at least $10,000 for a family of four. Workers with coverage through small firms are particularly at risk of high contributions for family coverage, and would therefore benefit from the family glitch fix.

Last Updated 05/25/2022

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