DCMedical News: Friday, December 3, 2021
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Friday, December 3, 2021
House Passes a Continuing Resolution Funding Federal Government Until 2-18-2022: Significant Medicare Impact
CQ reports that “House and Senate negotiators agreed on a temporary spending bill [HR 1619, here] Thursday that would keep the lights on at federal agencies through Feb. 18, buying 11 more weeks to try to resolve partisan disputes over funding levels and policy riders that have stalled progress on fiscal 2022 appropriations.” The deadline for “keeping the lights on” in and through federal funding was midnight tonight (Friday). The bill passed the House on a 221-212 vote Thursday evening. “Several GOP senators on Wednesday said they'd potentially object to quick passage if they didn't secure a vote on their proposal to block President Joe Biden's vaccine-or-test mandate for private employers.” However, the Senate acted Thursday night to approve the continuing resolution, 69-28.
Medicare cuts taking place Jan. 1, including a 2 percent "sequester" and separate reductions to reimbursements for physicians and clinical laboratory services, won't be addressed in the continuing resolution. Becker’s Healthcare reports (here) that “The American Medical Association is slamming the inaction of Congress on looming Medicare payment cuts, saying that allowing them would be ‘reckless during a public health emergency.’ The AMA has been sounding the alarm on 9.75 percent in payment cuts that are slated to take effect Jan. 1. The cut will stem from several sources, including resumption of a 2 percent Medicare sequester, imposition of a 4 percent statutory PAYGO sequester, expiration of a 3.75 percent temporary increase in the physician reimbursement and a freeze in annual Medicare provider fee schedule updates.”
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Chevron Deference and the 340B Program
Bloomberg reports on another significant health care case argued before the Supreme Court this week. In brief, §340B (referring to the section of the Public Health Service Act authorizing the program) began in 1992 as an effort to use drug company money to subsidize safety net hospitals. (See section 602 of P.L. 102-585, in the middle of the Veterans Health Care Act of 1992, here.) The program compelled drug companies to sell their products to eligible hospitals at a substantial discount, then allowed the hospitals to re-sell the drugs to third parties, including Medicare, at a profit, nominally using that profit to subsidize services to low-income patients. The program grew without constraint, and now involves more than 2,000 hospitals, most of which are not “safety net” hospitals. There is a trade association specifically focused on this program, representing 1,400 or so of the beneficiary hospitals (“340B Health”, https://www.340bhealth.org/about/).
CMS has moved to limit the benefits of the program, upon which many hospitals now partially rely. CMS did so without conducting a survey on the impact of such reduction, called for in the statute. Bloomberg reports (here), “The Medicare provisions allow the government to use hospital ‘average acquisition costs’ to determine reimbursement rates, so long as the government conducts a survey of those costs. If a survey isn’t possible, the law says the government can use ‘average price’ . . . The government wants to use average cost, even without the required survey. Justice Elena Kagan said that makes no sense. ‘The text of the statutory provision sets it up as, if you do a survey, you can do one thing, and if you don’t do a survey, you can’t do that thing,’ Kagan told Justice Department attorney, Christopher Michel. ‘And you’re saying that this delegation should be read to say, if you do a survey, you can do this thing, and if you don’t do a survey, you can also do this thing.’ Why would Congress have written a statute like that?’ she asked.”
AHA brought suit against CMS’ interpretation of the 340B statutory provisions; 30% of the program’s revenues or $1.6 billion (otherwise paid to hospitals) is involved. (AHA’s position and views on the 340B program may be found here.) CMS lost in the District Court, then prevailed before the District of Columbia Court of Appeals, arguing in both settings that the court should defer to the agency (known as Chevron deference, for a leading case articulating the principle of court deference to administrative agencies in the interpretation of ambiguity in statutes).
Bloomberg reported further that “So far the Supreme Court hasn’t been willing to overturn Chevron and its offshoots. Instead, the court has tinkered with the rules to encourage lower courts to serve as a check on agency power.” Justice Gorsuch said “there’s been a ‘troubling trend’ of lower court rulings in which judges just seem to throw up their hands in the face of tough statutory language.”
Jiang, Makary, Bai, Reveal Hospital Price Disparities for Imaging Studies, in Radiology
The Wall Street Journal (here) summarized a new study from John Jiang, Martin Makary and Ge Bai in Radiology (here) which found “Some hospitals charge up to 10 times as much as others for standard medical scans . . . Health economists say the disparities reveal how little influence consumers have over pricing . . . Hospitals and insurers have long set prices in confidential negotiations, which has frustrated employers seeking to curb costs by shopping for better deals under worker health-benefit insurance plans.”
The study focused on the opacity which remains the norm in hospital price disclosure eight months after a federal rule requiring hospitals to post 300 “shoppable” prices. The study also reviewed the wide variability in information actually disclosed. A total of 13 CPT codes were studied for 5700 hospitals and imaging facilities. One-third of hospitals required to disclose such information had done so. “As of September 6, 2021, a mean of 2053 of the 5700 hospitals (36%) reported the commercial negotiated price for one of the 13 CMS-specified shoppable radiology services, with the median number of plans contracted with a hospital ranging from 10 to 12 across the services . . . Compared with the Medicare rate, CT examination of the head or brain (CPT code 70450) had the highest median negotiated price ($813 vs $137), and mammography (CPT codes 77065, 77066, and 77067) had the lowest median negotiated prices ($230 vs $101; $289 vs $129; and $235 vs $104, respectively).”
READINGS & REFERENCES
A Piecemeal of Incremental Changes
A group of health reporters for The New York Times analyzes (here) the overall impact of the social/environmental infrastructure bill which passed the House on November 19, but which faces an entirely uncertain future in the Senate. “An estimated 3.4 million Americans would gain health insurance as a result of the legislation . . . The bill would expand health care access for children, make insurance more affordable for working-age adults and improve Medicare benefits for the disabled and older Americans . . . taken together, these policies represent the biggest step toward universal coverage since the passage of the Affordable Care Act in 2010.”
AHRQ on Rural Health
The Agency for Healthcare Research an Quality has published (report here, 184 slides here) its November, 2021 Chartbook on Rural Healthcare. Some 20% of the U.S. population lives in rural areas, which constitute 85% of the nation’s land mass. The rural population in the U.S. is older, poorer, sicker, and getting worse: “Compared with urban counties, rural counties have a larger percentage of adults over the age of 65 (17.5% vs. 13.8%); a higher poverty rate (15.3% vs. 11.9%) and lower per capita income ($42,993 vs. $59,693); and a higher prevalence of adults with multiple chronic health conditions (e.g., arthritis, diabetes) (34.8% vs. 26.1%).” Over time: “In 1999, the age-adjusted death rate in rural areas was 7% higher than in urban areas; by 2019, the rate in rural areas was 20% higher than in urban areas.”
Money, race and health services. The AHRQ report notes, “Research suggests that urban hospitals are twice as profitable as rural hospitals, and most unprofitable hospitals are rural,” and that “Rural hospitals predicted to be at high risk of financial distress in 2019 served communities with higher percentages of non-White residents (18.8% vs 9.7%) and Black residents in particular (5.2% vs. 1.5%).”
Having babies: “The South has the lowest density of rural hospitals with obstetric services (7 per 100,000 rural women of reproductive age compared with 15 per 100,000 in the West (the region with the highest density). Loss of hospital-based obstetric care in rural counties that are not adjacent to urban areas is associated with increased risk of birth in hospitals without obstetric units and of preterm birth.”
Select Coronavirus Public Health Resources and References may be found here.
2021 CQ Congressional Calendar here.
2022 CQ House of Representatives Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
December 6, 7, 8, 9, 10
January 10, 11, 12, 13, 18, 19, 20, 21
February 1, 2, 3, 4, 7, 8, 9, 28
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org