DCMedical News: Thursday, March 17, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Thursday, March 17, 2022
War Heroes
Here and here and here.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
AMA Voices Unhappiness of Doctors With Medicare Fees, MedPAC Recommendations
The American Medical Association has written (here) to Congressional leaders to voice its unhappiness with the Medicare 2023 physician fee schedule, and with the recommendation of MedPAC at its most recent meeting to keep those fees frozen.
The letter pointed to other Medicare providers who are receiving significant or at least regular fee increases, and to the 8% increase being given next year to Medicare Advantage plans.
The group noted that: "Based on an analysis of data from the Medicare Trustees, Medicare physician payment has been reduced 20 percent, adjusted for inflation, from 2001–2021. Also, the Medicare physician payment system is lacking an adequate annual physician payment update similar to other Medicare providers."
"In addition, Medicare spending per enrollee has been falling for physician payment schedule services even as it has risen steeply for other Medicare benefits. Furthermore, a continuing statutory freeze in annual Medicare physician payments is scheduled to last until 2026, when updates resume at a rate of only 0.25 percent a year indefinitely, well below the
rate of medical or consumer price index inflation."
The letter also noted that most physicians have not had an opportunity to "transition" to value-based payment programs with financial incentives, and even if they had, studies have shown the "value based" MIPS, for example, to be costly to physicians. In 2021, a study in JAMA Health Forum (here) asked, "How much does it cost for physician practices to participate in Medicare’s Merit-based Incentive Payment System (MIPS)? Findings in this qualitative study using interviews with leaders of 30 physician practices across the US, an average of $12, 811 per physician was spent to participate in MIPS in 2019. Clinicians and administrators spent more than 200 hours per physician on MIPS-related activities."
The AMA cited data from the Medicare Trustees, showing that Medicare physician pay has increased just 11 percent over the last two decades, or 0.5 percent per year on average; that Medicare hospital updates totaled roughly 60 percent between 2001 and 2021, with average annual increases of 2.4 percent for both inpatient and outpatient services; that Medicare skilled nursing facility (SNF) updates totaled more than 60 percent between 2001 and 2021, or 2.5 percent per year; that the cost of running a medical practice increased 39 percent between 2001 and 2021, or 1.6 percent per year; and that Economy-wide inflation, as measured by the Consumer Price Index, increased 51 percent over this period (or 2.1 percent per year). "Adjusted for inflation in practice costs, Medicare physician pay declined 20 percent from 2001 to 2021, or by 1.1 percent per year on average."
Enrollee spending mirrors these rate changes. From 2010 to 2020, according to the Medicare Trustees, change in spending per enrollee was negative 1% for physicians, positive 3.6% for Part A (hospitals), 42% for other Part B expenses, 29% for part C (MA plans) and 20% for Part D drug plans.
Congress only recently responded to complaints from organized medicine concerning the 2022 Physician Fee Schedule. A pending 10% cut in fees was averted.
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Zack Cooper Talks to Yale News on Hospital Prices, Mortality and Inequalities
The economist and health cost researcher said (here) "The preponderance of evidence shows that the increase in hospital prices we’ve seen over the last 20 years has been driven by the profound increase in consolidation that has occurred in the hospital sector. It really is striking. There have been nearly 2,000 mergers among the approximately 5,000 hospitals in the United States. Unfortunately, we’re at a point right now where most hospital markets are 'highly concentrated,' according to the Department Justice and Federal Trade Commission's Horizontal Merger Guidelines [see DCMN 3-15-2022]. This is extremely problematic. We must remember that the U.S. hospital sector is 6% of the country’s GDP and the largest contributor to health care costs, so these changes in hospital markets affect all of us."
In findings which Cooper characterizes as surprising, "In both concentrated and unconcentrated hospital markets, we found that receiving care from high-priced hospitals increased health spending by approximately 52%, which is quite a lot. What was striking is that when patients went to high-priced hospitals in concentrated markets, their spending went up by 52% but they did not get better outcomes. So this spending was really just wasteful. Juxtapose that with what we found in unconcentrated or more competitive markets. In these markets, attending a higher-priced hospital led to higher spending, but it also led to a 47% reduction in mortality for time-sensitive conditions like heart attacks. So, in these competitive markets, you spend 52% more, but you’re 47% less likely to die."
On the societal impact of high hospital prices, Cooper said "When hospital prices go up, this raises insurance premiums, and my team and I are really focused now on analyzing how rising insurance premiums are actually leading to pretty big changes in non-health sector employment and inequality."
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
MACPAC Sends Report to Congress
The Medicaid and Children's Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) has sent its spring report to Congress (report here, press release here).
Broken DSH
In one area of controversy addressed in the report, DSH (disproportionate share hospital allotments made to the states), MACPAC finds no relationship between the amounts and the needs. "As in prior years, the Commission continues to find little meaningful relationship between state DSH allotments and the number of uninsured individuals; the amounts and sources of hospitals’ uncompensated care costs; and the number of hospitals with high levels of uncompensated care that also provide essential community services for low-income, uninsured, and vulnerable populations."
Coincidentally, CMS published in Wednesday's Federal Register (here) the final Federal share (FS) disproportionate share hospital (DSH) allotments for fiscal year (FY) 2018 and FY 2019, and the preliminary FS DSH allotments for FY 2020 and FY 2021, as well as the final FY 2018 and FY 2019 and the preliminary FY 2020 and FY 2021 limitations on aggregate DSH payments that States may make to institutions for mental disease and other mental health facilities. Becker's notes that "The DSH payments, first given to the states, are then passed on to hospitals that serve a large number of low-income patients. The total amount of these payments to hospitals is limited by this annual allotment. DSH payments to a hospital also cannot exceed the total amount of uncompensated care reported by the hospital."
Also, "The report shows that in fiscal 2018, CMS provided $12.3 billion in DSH payments to states, and in 2019 CMS provided $12.6 billion in DSH allotments to states. For 2020, states' allotments total $22.5 billion, and in 2021 state allotments total $22.8 billion . . . These allotments are determined annually and are generally equal to the prior year's amount but adjusted for inflation. DSH allotments were slated to be reduced under law, but in 2021 Congress further pushed off the reductions until fiscal year 2024. The reductions are slated for fiscal years 2024-27 at a rate of $8 billion per year." The reductions followed assumptions in the Patient Protection and Affordable Care Act that, with the success of Medicaid expansion and marketplace plans, DSH would no longer be needed, and could be phased out. Amounts allotted to the individual states are found in the Federal Register publication, pp. 14864ff.
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here.
2022 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
March 18, 28, 29, 30, 31
April 1, 4, 5, 6, 7, 26, 27, 28, 29
May 10, 11, 12, 13, 16, 17, 18, 19
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org