DCMedical News: Thursday, February 8, 2018
DCMedical News
Washington, D.C.
Thursday, February 8, 2018
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THE BIG STORY TODAY IN HEALTH CARE
Midnight tonight (Thursday) is the deadline for passage and signing of a Continuing Resolution (#5) to fund federal government activities, the “stop-gap” funding resolution. The text as passed by the House is found here, and includes 44 separate health measures and two dozen additional social welfare initiatives. (Many of the latter deal with child welfare, foster homes and adoption, matters which once were the province of the states.)
The Senate, not to be outdone, agreed on a two-year (FY 2018, FY 2019) budget, upping discretionary spending by $300; raised the statutory debt ceiling, extended through March of 2019; added $6 billion for two years’ worth of anti-opioid and mental health efforts; added $4 billion for the rebuilding of VA hospitals and clinics; added $2 billion for the National Institutes of Health; extended the re-authorization of CHIP (the Children’s Health Insurance Program), now to ten years (CHIP was re-authorized for six years in CR #4); increased the authorization for community health centers for the next two years to $7 billion; and closed a part of the Medicare Part D “donut hole” in pharmaceutical benefits for Medicare beneficiaries in 2019.
Against the $300 billion increase there is roughly $100 billion of spending offset. (See below, “Who loses?,” concerning health field offsets).
A section-by-section summary of the bill is found here.
DOCTORS
$252 million is provided in this CR #5 for “Teaching Health Centers.” What are they?
Teaching health centers (THCs) that operate graduate medical education programs are among the “other health extenders” in Title V of the Continuing Resolution (page 327ff of the bill, here). THCs aim to reorient residency training from its traditional hospital base to ambulatory care, especially in community heath centers (Federally Qualified Health Centers, FQHCs). The program was specifically intended to provide graduate medical education funding directly to community-based health centers (See Chen, “Teaching Health Centers: A New Paradigm in Graduate Medical Education,” Academic Medicine, Dec. 2012).
The program stemmed from the widespread and commonly accepted recognition of the relative imbalance between training of primary care and training of specialist physicians in the United States, an imbalance that works to the disadvantage of those who are isolated medically, financially or geographically (“Cost Estimates for Training Residents in a Teaching Health Center,” HRSA). Like payment to hospitals for residency programs, the THC includes both direct and indirect expenses (page 341), to maintain filled positions, to expand approved programs and to establish new programs. Priority is given to teaching health centers that serve HPSA (Health Professional Shortage Areas), MUAs (Medically Underserved Areas), or which are located in a rural area.
The first 11 health centers were funded in January of 2011 with residents beginning in July of that year. All 11 of the original teaching health centers were in fact FQHCs, or “look-alikes” (same requirements, no federal funding), and all were affiliated with one or more university or medical school. Each of the THCs also linked up to a teaching hospital, to enable residents to participate in inpatient training. Part of the funding of the THC program, in fact, as it developed, involved a pass through of Medicare GME funding from hospitals to the health centers, to compensate the health centers for that percentage of the time the residents spent in caring for patients in the inpatient hospital setting.
A five-year retrospective (found here) found that GME still remains a hospital entitlement, and that transferring funds to community-based organizations for residency training “has proved difficult.” In 2015, the program was reauthorized at $60 million per year for a two-year period, having grown from 11 to 59 centers. Of the 59 residency programs, 42 were newly created, the remainder expansion programs, adding THC-supported residents to the cadre of Medicare-support residents.
CR #5 funding is for a total of $126.5 million for each of the Fiscal Years 2018 and 2019 (page 342 of the bill, here.)
HOSPITALS AND HEALTH CARE FACILITIES
Who Loses? Although variable in its implementation, the 2011 budget act called for “offsets” or “pay-fors,” that is, means through which new expenditures can be recovered by discontinuing older ones. So who (in this major health bill—perhaps the last one for this Congress) loses?
One loser, so far, is the American Medical Association, through Section 2704 of CR #5. This section extends the adjustments for “mis-valued services” under the physician fee schedule. It began in 2010, with a congressional mandate that CMS develop means of identifying “over-valued” codes in the Common Procedural Terminology (CPT), AMA-copyrighted professional services billing codes. For 2018, there was a -.4% adjustment, with the correction process to extend one more year.
Also losing are hospices (section 2701, providing that hospitals would be paid less when a hospital transfers a patient to a hospice after a short length of stay, beginning October 1, 2023); home health care, where the market basket for Fiscal Year 2020 would be 1.4%, lower than might otherwise be the case; reduced non-emergency end-stage renal disease ambulance transport; low quality Medicare Advantage plans, which can be thrown out for failure to achieve other than a “low star” rating for three consecutive years, a provision now extended to ten years; therapy assistant services for OT and PT; a loss for the LTCH (Long Term Care Hospitals) market basket update from 2018 through 2026 of 4.6%; Medicaid third party liability, through Section 2710 which would allow Medicaid to act, like Medicare, as a payer of last, not first, resort; $6 billion added in additional DSH payments to offset the cost of eliminating the 2018 and 2019 reductions; sunsetting the exclusion of biosimilars from the Medicare Part D coverage gap; and of course section 2715 on the Prevention and Public Health Fund, removing $900 million from the PPHF this year and next, $1 billion from FY2020 and FY2021, and another $1.1 billion for FY2022 through FY2027.
(See yesterday’s edition of DCMN for a complete discussion of the “Prevention and Public Health Fund,” (PPHF), a creation of the Patient Protection and Affordable Care Act (PPACA), characterized by dissenting Senate Republicans at the time as “a ‘slush fund’ for jungle gyms and walking paths.”) See also a protest letter from “Coalition for Health Funding,” here.
Finally, there is that now-famous new section (2711) requiring a state Medicaid program to count lottery winnings of $80,000 or higher in more than one month for purposes of determining Medicaid Adjusted Gross Income (MAGI) eligibility.
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
We need to find that big spender. Courtesy of business analyst company MCOL, and based in Healthcare Cost Containment Institute numbers, a graphic (here) on national health expenditures in the private sector in 2015 shows that the top 5% of commercially insured individuals accounted for 53% of health spending, while the bottom 50% of commercially insured individuals accounted for 4% of health spending. But (the insurance principle!) it isn’t always the same 5%. See (here) a graphic on turnover in health spending from NEJM Catalyst.
EVENTS & MEETINGS
Your February & March Calendar:
February 13
12:30 to 5:00, the ONC and the ASPE present a webinar on “Blockchain in Healthcare,” agenda and registration page here.
February 14
9:00 a.m., various advisory committees for the Substance Abuse & Mental Health Services Administration (SAMHSA) continuing on the 15th, information @ https://www.samhsa.gov/about-us/advisory-councils/meetings, agenda here.
February 14
House Ways and Means Committee holds a hearing on the FY2019 budget proposals of the Department of Health and Human Services, sole witness HHS Secretary Alex Azar.
February 14
10:15 a.m., the House Subcommittee on Oversight and Investigations holds a hearing on “Examining the Impact of Health Care Consolidation.”
February 16
9:00 a.m., Brookings/USC Schaeffer program on “Patient Cost Sharing for Prescription Drugs: Policy Issues,” Ginsburg, Holtz-Eakin, legislative reps, journalists, drug industry reps.
February 21
9:00 a.m., Health Affairs and WestHealth Institute hold a program on healthcare costs. Steve Forbes, Sanjay Gupta and other authorities.
February 21
11:00 a.m., Medicare.gov, Physician Compare 90-minute webinar on PQRS
March 1
9:00 a.m. MedPAC, Ronald Reagan Building, Horizon Ballroom, 1300 Pennsylvania Ave, continuing March 2.
March 1
9:00 a.m., 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
For insight into rural health and rural hospitals, a new essay by the founding editor of Health Affairs, veteran of the National Journal, esteemed columnist for The New England Journal of Medicine, John Iglehart: “The Challenging Quest to Improve Rural Health,” NEJM, February 1, 2018, here.
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: 9, 12, 13, 14, 15, 16, 26, 27, 28.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com