DCMedical News: Monday, February 5, 2018
DCMedical News
Washington, D.C.
Monday, February 5, 2018
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THE BIG STORY TODAY IN HEALTH CARE
February 8 (Expiration of the current Continuing Resolution funding many of the activities of the federal government)
A fifth Continuing Resolution (CR) will be needed to avoid another “shutdown” of federal government activity as the February 8 deadline for CR #4 looms.
Health legislation which was “tacked on” in negotiations for CR #4 included a six-year reauthorization of the Children’s Health Insurance Program. CR #4 also suspended three Obamacare taxes, including a one-year suspension of the health insurance tax, a two-year suspension of the medical device excise tax, and two-year suspension of the Cadillac tax on high-cost employer-sponsored health care plans, all at an estimated tax revenue loss of $31 billion (CBO report, here, pg. 4)
On other health legislation pending since September 30, 2017, CR #4 left out Community Health Centers (FQHCs), any resolution to the 340B drug subsidy, Disproportionate Share Hospital (DSH) funds for safety net hospitals, teaching health centers, the Maternal, Infant and Early Childhood Home Visiting Program, the $2,021 per year physical, speech and occupational therapy cap under Medicare, rural extenders (“Medicare Dependent” and “Low Volume Hospital” Medicare programs), and of course an actual budget leading to appropriations bills for the remaining seven months of FY 2018.
The House is preparing to vote Tuesday on CR #5 to extend government activity from February 8 to March 22. What health care measures might be included in CR #5? If Democratic votes in the House are needed for passage of CR #5--and to avoid another “shutdown--some or all of the programs which were to have been re-authorized by September 30 may benefit.
Beyond the Continuing Resolutions, a budget is needed for the fiscal year (2018) which began October 1, 2017.
Another budget battle will involve the upcoming fiscal year 2019, which begins October 1, 2018. Without a budget resolution, the “Continuing Resolution” tool will not be available in the Senate. There won’t be any “reconciliation instructions” if there is no budget with which to reconcile. Therefore, sixty votes will be needed in the Senate for new legislation, not 50.
DOCTORS
Have we reached the limits of behavioral economics in health services? In a recent Annals of Internal Medicine, UPMC’s Dr. Eric Roberts and colleagues find that “nudges” (bonuses, penalties) had nearly no impact on performance, except to disadvantage doctors and hospitals with very sick patients. The study focused on the “Value-Based Payment Modifier,” (VBP-M) and found that as implemented it “may contribute to health care disparities without improving performance on average.”
Pediatrician and policy guru Dr. Aaron Carroll has discussed the limits for patients in a blog found here. The “hassle” factor looms: when the federal payer has more paperwork associated with the bonus than the bonus is worth, doctors stay away in large numbers, even at the cost of financial penalty. But consider this: was that the plan?
More on behavioral economics: Leavitt Partners’ poll on “The State of Health Care Today,” involving more than 5,000 consumers, 621 physicians and 538 employers, found here, was discussed briefly in our January 31 edition. 60% of physicians have never heard of or are not familiar with the requirements of MACRA (the Medicare Access and CHIP Reauthorization Act of 2015).
Another study on the VBP-M published in Health Affairs (December 2017, pg. 2175) found that nearly one-third of groups of 100 or more clinicians didn’t bother reporting. They got a 1% cut in their Medicare rate.
See previous editions of January 16 and 24 on bundles, January 9, 11, 17, 23 and 31 on MIPS and MACRA. Past issues of DCMedical News may be accessed as follows: at the top of this e-mail, click on “View this email in your browser,” then click on “Past Issues.”
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
Medicare Advantage Programs Thrive
Medicare Advantage (MA), the private version of Medicare, is thriving. Begun as “Medicare Part C” in 1995, Medicare Advantage is run through commercial insurance companies, non-profits (Kaiser is a major MA provider) and hospitals and health systems.
Some 21 million Medicare beneficiaries are enrolled in MA programs, compared to 34 million approximately in traditional or Fee-For-Service (FFS) Medicare. MA enrollment is up nearly 8% during the past year, with the market leaders being UnitedHealth (5.24 million members, up 14% in 2017), Humana (3.51 million, up 7% in 2017), Aetna (1.71 million, up 21% in 2017) and Kaiser (1.57 million, up 11% in 2017).
Commercial insurer strategy is widely seen as focusing on the acquisition of more MA members (e.g., Aetna’s thwarted attempt to acquire Humana; Anthem’s recent announcement that it expects double-digit growth in MA, outpacing existing market growth. For Anthem, government business represents more than half of its consolidated operating revenue.)
CMS announced February 1 (summary here, 231-page “call letter” here, letter of support from Members of Congress with 17 pages of signatures here) that MA reimbursement will grow further, by 1.84% in 2019.
The tapeworm in the American body politic: Warren Buffett’s characterization of the cost of health care and its impact on American business. What is it they have in mind? The Wall Street Journal urged them to “go big,” not just tech toys for the employees. See tomorrow’s edition.
PHARMA
The 340B Drug Pricing Program offers hospitals that serve a disproportionate number of low-income patients substantial discounts on outpatient drugs. At the same time, the hospitals are able to seek standard payment (much higher than the low cost imposed on pharmaceutical manufacturers) from insurers. In theory, the profit can be used by hospital to expand access to care for low income patients. However, this was not made a requirement of the program at its inception, in 1993, leaving the hospitals able to use the buy-low/sell-high drug profits for general purposes.
A new study (found here) that compares hospitals eligible for the 340B program with otherwise similar hospitals finds that eligible hospitals employ 230 percent more hematologist-oncologists and 900 percent more ophthalmologists, but found no evidence that hospitals participating in the 340B program were investing more in safety-net providers or provide more care to low-income patients.
These findings suggest that hospitals are acquiring more hematologist-oncologists and ophthalmologists who can administer profitable outpatient drugs in order to increase hospital revenue without fulfilling the spirit of the 340B program by using their profits to benefit low-income patients. This study highlights the potential dangers of providing inadequate oversight of even the most well intended program.
EVENTS & MEETINGS
Your February & March Calendar:
February 5
8:30 a.m., Academy Health holds its National Health Policy Conference at the Marriott Marquis, Washington, D.C. See web site (https://academyhealth.confex.com). Continues through February 6. Cost to attend $1,315.
February 6
3:00 p.m., Full Ways and Means Committee in the House, hearing on the Opioid Crisis and “barriers” in the Medicare program to prevention and treatment of opioid abuse and dependence.
February 13
12:30 to 5:00, the ONC and the ASPE present a webinar on “Blockchain in Healthcare,” agenda and registration page here.
March 1
MedPAC, Ronald Reagan Building, Horizon Ballroom, 1300 Pennsylvania Ave, continuing March 2.
March 1
MACPAC, advisory body on Medicaid and the Children’s Health Insurance Program, continuing March 2.
March 26
PTAC, Physician-Focused Payment Model Technical Advisory Committee, continuing March 27, information at www.regonline.com/PTACMeetingsRegistration or livestream at www.hhs.gov/live.
OTHER PUBLICATIONS
“Medicare Beneficiaries’ Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future,” Kaiser Family Foundation, here. Excerpt: “One-fourth of traditional Medicare beneficiaries spent nearly 30 percent or more of their total income on out-of-pocket costs in 2013, while 10 percent of beneficiaries in traditional Medicare spent nearly 60 percent or more,” pg. 6.
For reference:
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
DCMN: February publication dates: 6, 7, 8, 9, 12, 13, 14, 15, 16, 26, 27, 28.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com