DCMedical News: Thursday, December 8, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Thursday, December 8, 2022
COVID and All-Cause Hospitalization
AHRQ’s Healthcare Cost and Utilization Project publishes (here) “Changes in Hospitalizations and In-Hospital Deaths in the Initial Period of the COVID-19 Pandemic (April–December 2020), 38 States and DC,” showing fewer hospitalized patients (with attendant loss of revenue), and higher in-hospital mortality (greater intensity of service, higher expense), setting the stage for the continued financial distress of most of the nation’s hospitals, slow to recover revenue as higher expenses continued.
“The number of hospitalizations across 38 States and DC was lower each month in April–December 2020 versus the same month in 2019 (April: 1.5M vs. 2.1M), whereas the in-hospital mortality rate was higher (December: 4.3 vs. 2.1 percent).”
“In the United States in 2019, there were approximately 35.4 million hospitalizations, about 2 percent of which resulted in an in-hospital death. At the start of the COVID-19 pandemic in April 2020, the number of hospitalizations declined substantially, with a 28 percent decrease in hospitalizations compared with April 2019, while the in-hospital mortality rate increased from 2.0 percent in April 2019 to 3.7 percent in April 2020.”
“By patient race and ethnicity, hospitalizations decreased the most for White non-Hispanic individuals (13.1 percent), while the number of in-hospital deaths for this group increased by almost 25 percent. Hispanic individuals had the smallest decrease in hospitalizations compared with the other race and ethnicity categories (5.8 percent) and the largest increase in in-hospital deaths (95.5 percent).”
Hospital Charity Care Mostly Increased in the Pandemic, but With Unclear Policies
A study in JAMA (here) notes that, during this pandemic period (above) of lower hospitalization and higher mortality, hospital charity care policies generally improved, in favor of the patient. “Tax-exempt hospitals appear to have updated their policies with mostly positive changes during and after the onset of the COVID-19 pandemic; however, some hospitals restricted charity care in 2021 documents. Unpublicized or vague eligibility criteria may limit patients’ understanding of charity care policies and conceal the full extent of charity care policy changes over time.” The 2021 challenges to patients are echoed in a report (here) from the Lown Institute, which found that “recent investigations have shown that many hospitals do the opposite, putting up obstacles for low-income patients to get free care for which they are eligible.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Prior Authorization Traffic Jam
InsideHealthPolicy reports (here) that Congressional action to limit prior authorization encountered potentially fatal Congressional Budget Office (CBO) estimates of the cost—the theory being that patients needing care being held up by prior authorization delays would actually get that care, increasing expense to the Medicare program.
One solution: CMS has issued alternative proposals (here) for prior authorization limitation which, implemented, would decrease changes which might otherwise come from Congressional action, lowering the projected cost of the legislation, freeing up a route to passage, or at last avoiding the CBO barrier.
The prior authorization problem was highlighted in a report from the Office of the Inspector General of HHS this past spring (here) which found “13% of prior authorizations denied in a one-week period analyzed by the office met Medicare coverage rules and 18% of denied payments during that week also met those requirements.” At the time, America’s Health Insurance Plans (AHIP), the commercial health insurance lobby, said that results are being overblown, and that “the study validates that the majority of MA prior authorization requests are approved.”
IHP notes “CMS on Tuesday (Dec. 6) took steps to streamline the prior authorization process by proposing that Medicare Advantage plans, Medicaid fee-for-service programs, Medicaid plans and exchange plans establish an electronic prior authorization system, and that payers set up an interface to share clinical and claims data as patients change from one plan to another.”
“The proposed rule, which CMS says would save $15 billion over 10 years across all providers, comes as Congress nails down its year-end legislative priorities, including possible passage of the Improving Seniors’ Timely Access to Care Act, which would overhaul MA prior authorization and shift the process to an electronic system. Stakeholders have said CMS movement on a rulemaking could significantly cut the cost of the bipartisan bill.”
“A congressional aide told Inside Health Policy CMS’ proposed rule could significantly decrease the projected cost of the bipartisan MA prior authorization reform bill, which they are optimistic will pass by the end of the year despite a $16 billion price estimate from the Congressional Budget Office. Lobbyists told Inside Health Policy that as electronic prior authorization is where most of the bill’s costs stem from, the proposed rule’s provisions could cut down the bill’s Congressional Budget Office score by as much as half.”
“CMS proposes adding a new electronic prior authorization measure for eligible hospitals and critical access hospitals under the Medicare Promoting Interoperability Program and for Merit-based Incentive Payment System (MIPS) eligible clinicians under the Promoting Interoperability performance category. To accomplish this, the agency also proposes requiring payers to implement a Fast Healthcare Interoperability Resources (FHIR) standard API, which would help them manage electronic prior authorization requests.”
How likely is this to happen? An MGMA spokesman said, “An alarming number of medical groups report completing prior authorization requests via paper forms, over the phone, or through varying proprietary online payer portals.” An alternative explanation is that CMS has no expectation that its rule will actually be implemented, and that their proposal is intended to clear the way (reducing CBO estimates of the cost) for legislation.
DRUGS & DEVICES
Clinical Trials a New Target for Private Equity
Kaiser Health Network and Fortune (here) published a new episode in their series “Patients for Profit: How Private Equity Hijacked Health Care,” this one entitled “The Business of Clinical Trials Is Booming. Private Equity Has Taken Notice.”
“Getting a drug to market a few months sooner and for less expense than usual can translate into millions in profit for the manufacturer. That is why a private equity-backed startup like Headlands Research saw an opportunity in creating a network of clinical sites and wringing greater efficiency out of businesses, to perform this critical scientific work faster. And why Moderna, Pfizer, Biogen, and other drug industry bigwigs have been willing to hire it — even though it’s a relatively new player in the field, formed in 2018 by investment giant KKR.”
“A fragmented clinical trials industry has made it a prime target for private equity, which often consolidates markets by merging companies . . . Good or bad, clinical trials have become a big, profitable business in the private equity sphere, data shows. Eleven of the 25 private equity firms identified by industry tracker PitchBook as the top investors in health care have bought stakes in clinical research companies . . . Still, most trial sites are physician practices that don’t consistently perform studies.”
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
December 12, 13, 14, 15
January 3, 4, 5, 9, 10, 11, 12, 24, 25, 26, 27, 30, 31
February 1, 2, 6, 7, 8, 9, 27, 28
March 1, 7, 8, 9, 10, 22, 23, 24, 27, 28, 29, 30
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org