DCMedical News: Thursday, November 4, 2021
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Thursday, November 4, 2021
Reconciliation, After the Elections
The text of House Democrats' new version of their budget reconciliation package (HR 5376, 1684 pgs.) is here. CQ reports that “The Rules Committee was meeting Wednesday on the amended budget package, which includes language designed to lower the prices of prescription drugs, revise other health care provisions, offer a paid-leave program and raise a $10,000 cap on the state and local tax deduction.”
Employer Sponsored Health Insurance in the BBB
The scaled back Build Back Better bill also includes changes in employer-sponsored health insurance that InsideHealthPolicy reports (here) are the subject of employer group attacks. “One of the policies employers oppose lowers the ‘affordability threshold’ for employer coverage starting in January. Under current law, most large employers must offer insurance coverage that meets minimum coverage standards and costs no more than 9.5% of a worker’s income (indexed to inflation). If the premium contribution is more than 9.5%, that worker could get subsidized coverage from the exchange -- and the employer would be penalized. The BBB changes that affordability threshold down to 8.5% of income, which aligns with the cap on premium contributions put in place under the American Rescue Act . . . But employers say the policy would be counterproductive and could result in higher costs for workers if cost-sharing is increased to make up for the lower premiums. And some employers might drop coverage, the Chamber [of Commerce] warns.”
Policy Targets Intended and Unintended
Modern Healthcare reports (here) that “House Democrats are taking a new approach to convince recalcitrant conservative states to expand Medicaid to low-income adults: threatening funding cuts to hospitals. Under an updated version of the domestic policy package that the House may consider as soon as this week, hospitals in states that don't expand Medicaid could face a 12.5% cut in funding meant to help hospitals that serve large numbers of Medicaid patients. These so-called disproportionate share hospital payments are intended to keep safety net facilities financially stable by offsetting Medicaid's low payment rates and helping cover uncompensated care costs. Democrats have already tried cajoling states into expanding Medicaid with the promise of extra federal funds through the COVID-19 relief law enacted this year. No state has taken up the offer. That's on top of the fact that the federal government already covered 90% of the costs of Medicaid expansion under the Affordable Care Act.
DOCTORS, NURSES AND OTHER HEALTH CARE PROFESSIONALS
A Divining Rod for Failure
The USC-Schaeffer Brookings team reports (full report here, summary here) on “Private equity investment as a divining rod for market failure: Policy responses to harmful physician practice acquisitions.” The study recalls recent history: “An influx of profit-driven entities into the sector might raise the cost or reduce the quality of patient care. Exemplifying these concerns, private equity-backed physician staffing companies and air ambulance operators helped drive the problem of out-of-network surprise medical billing, leading to increases in both in-network and out-of-network payments and exposing consumers to unexpected financial burdens. Private equity investor groups subsequently poured millions of dollars into lobbying to block passage of a federal surprise medical billing law.” However, the study asks whether private equity itself is the problem, or “whether, in the absence of private equity, other sources of capital—such as public equity, venture capital, health systems, and insurers—would similarly exploit existing market failures and legal loopholes in the health care system.”
The study explores these possibilities: “Private equity may more aggressively exploit market failures and payment loopholes . . . Private equity’s growing investment in physician practices may be accelerating horizontal consolidation in certain specialties, which a large body of evidence suggests increases prices and/or reduces the quality of care on net . . . private equity might distort the organizational form of physician practices away from physician ownership. This plausibly could harm patient care and employed physicians.” Recommendations from the study, however, are anodyne: close payment loopholes; enhance enforcement of antirust and employment law; and increase fraud and abuse enforcement.
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Verity Liquidator Blames Multiplan and its Client Commercial Health Plans for Out-of-Network Income Shortfall
Modern Healthcare (here) reports that Verity is “Suing MultiPlan and some of the country's largest health insurance companies, alleging they conspired to underpay for out-of-network services to the tune of about $10 billion per year. The liquidator for Daly City-based Verity Health System, a not-for-profit company that operated six hospitals, argues that . . . major insurers including UnitedHealthcare and Cigna unlawfully agreed to the scheme by virtue of their contracts with MultiPlan.” A lawyer for Verity Health System's liquidating trust contends "It's illegal for competitors to agree to charge the same price, even if they do it through a separate entity."
“Verity Health System primarily served Medicare and Medicaid patients, which made higher-paying commercial patients critical to their finances . . . Most of MultiPlan's revenue comes from ‘repricing’ out-of-network bills between its network of more than 1 million providers and 700 payers. The company negotiates down from providers' original bills and takes a cut for itself.” The article notes, “The lawsuit doesn't accuse insurers of explicitly communicating with one another to agree to offer the same, lower rates for out-of-network services . . . The insurer defendants did not actually need to communicate directly with one another in order to unlawfully agree to fix prices for out-of-network reimbursements." An attorney for Verity said "MultiPlan is taking all of that data and it's spitting out the same price for the identical procedure to all of these providers. That's a price fix, and that's illegal."
ASCs Bump Up Workers Compensation Expenses, Study
The Insurance Journal reports that “Workers' compensation payments are higher in Indiana than most other states” and that “Facilities, particularly ambulatory surgery centers, or ASCs, contributed to the higher-than-typical payments in Indiana,” according to Workers Compensation Research Institute (WCRI) Executive Vice President Ramona Tanabe. A WCRI report (here) was the basis for that finding. Also, having set fee schedules for professional services also affected prices: “Most states with no workers' compensation fee schedule experienced faster growth in prices paid compared to states with fee schedules from 2008 to 2020 . . . The six states with no fee schedules (Indiana, Iowa, Missouri, New Hampshire, New Jersey, Wisconsin) for professional services had higher prices paid than states with fee schedules. . . 2020 overall prices paid in these states were 44 percent to 179 percent higher than the median for states with fee schedules.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
MedPAC Addresses Ambulatory Care Fees, Part D for Long-Term Care
The Medicare Payment Advisory Commission will meet Monday, November 8th and Tuesday, November 9th (see DCMN of 11/2, here). On Tuesday the group will address the “alignment” (meeting brief here) of fee-for-service payment rates in different ambulatory care settings, and will also examine Medicare Part D pharmaceuticals for residents in long-term care facilities (meeting brief here).
Open Enrollment Report
Sara Collins of the Commonwealth Fund reports (here) that “During the ACA’s Open Enrollment Period, Consumers Will Get Lower Premiums, More Time, and More Help.” In a companion blog (here), Collins and colleagues explain why seniors will need all of that help: “One of five Medicare beneficiaries spent more than $2,000 a year out of pocket for health care, while one of 12 skipped or postponed care they needed because of costs.”
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here.
2021 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
November 5, 15, 16, 17, 18, 30
December 1, 2, 3, 6, 7, 8, 9, 10
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org