DCMedical News: Tuesday, February 11, 2020
DCMedical News-DCMN
Washington, D.C.
Tuesday, February 11, 2020
DCMedical News is published every day both the House and the Senate are in session.
THE BIG STORY IN HEALTH CARE
FY 2021 (10-1-2020 through 9-30-2021) Budget Proposed
The Administration proposed its fiscal year 2021 budget (here) with $9 billion (about 9%) in reduction for programs of the Department of Health and Human Services (here). Summary budget tables from the Office of Management and Budget (here) show ten-year projections, including a reduction of between $770 billion and $1.3 trillion from what would otherwise be spent on Medicare and Medicaid. (The total of Medicare and Medicaid reductions proposed will change, depending on analysis and scoring of provisions such as “The President’s Health Reform Vision,” a $600 billion reduction, see Summary Tables pgs. 3-5).
The two-year bi-partisan budget “deal” of 2019, which called for .4% increase in discretionary nondefense spending, would be scrapped, with an overall 6% reduction, instead. For revenue, the budget assumes a 3% average annual growth rate in GDP, compared to 2.3% in 2019 and the 1.7% projected for the coming decade by the Congressional Budget Office.
CQ reports, “Much of the Medicare savings would come from reductions in payments to hospitals, which are the top driver of the nation's health care spending. Proposals to reduce payments for hospital outpatient departments to the amount paid to independent doctors would save $164.4 billion, while proposals to reduce Medicare's payments to hospitals for patients' unpaid bills would save $121.5 billion, according to OMB. As in past years, the fiscal 2021 budget also proposes Medicare reductions for graduate medical education.”
Medicaid expenditures would be reduced by work requirements and continued reduction in DSH payments (see Medicaid, below) for safety net hospitals. Medicaid block grants are not proposed per se, but the “Healthy Adult Opportunity” CMS guidance to states (here) would provide block grants (capped expenditures) to states, in exchange for greater state flexibility in managing the Medicaid program.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
Candy (and Recommendations) Is Dandy, but Payment Reduction Works to Limit Low-Value Tests
An original investigation in JAMA Internal Medicine (here) reports that “Marginal reductions in the use of 2 low-value laboratory tests were associated with the release of related Choosing Wisely recommendations,” but “a greater reduction in low-value vitamin D screening was associated with a previous payment policy change implemented in Ontario, Canada. These findings suggest that recommendations alone may be insufficient to significantly reduce use of low-value services and that pairing recommendations with policy changes [i.e. pay less] may be more effective.”
MedPAC veteran Dr. Rita Redberg and colleague Sanket Dhruva post an editorial to accompany the investigation, commenting on the policy choices available to curtail low valued services (“A Successful but Underused Strategy for Reducing Low-Value Care: Stop Paying for It,” here). They note “A 2010 policy payment change to not reimburse vitamin D screening in Ontario, Canada, was associated with a 92.7% relative reduction in screening. Choosing Wisely recommendations were associated with smaller reductions in Canada (4.5%) and the United States (14.0%).”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
MFAR: A Tool to Guarantee Medicaid Program Integrity, or a New Attack on Medicaid Supplemental Funding?
CMS chief Seema Verma continues her campaign against Medicaid Supplemental Funding (see DCMN 11-13-2019). Unveiled last November at the National Association of Medicaid Directors (NAMD, CQ coverage here, CMS press release here), the Medicaid Fiscal Accountability Regulation (MFAR, fact sheet here, proposed regulation here) has drawn negative reaction from providers and states heavily dependent on Medicaid supplemental funding, such as DSH (Disproportionate Share Hospital) safety net subsidies. Historically low Medicaid payment rates compel states to provide supplemental payments beyond the base, to guarantee access. The payments, made in the aggregate with little federal (or public) reporting, may also be used by states to respond to interest or pressure group advocacy. The comment period on the proposal, which closed February 1, drew more than 4,000 responses.
Bloomberg Health Law reported (11-12-2019) at the time the campaign was announced that Ms. Verma “focused much of her outrage on the growth of state Medicaid supplemental payments to providers, which have grown from 9.4% of Medicaid payments in fiscal year 2010 to 17.5% in FY 2017. Medicaid payments are either base payments, which are painstakingly documented at a granular level, or supplemental payments, which are reported in aggregate. That makes it unclear what the supplemental money went for. In 2016, state Medicaid agencies made nearly $50 billion in supplemental payments to providers.”
More recently (1-27-2020) Bloomberg reported that AHA “Estimates the proposal could reduce Medicaid funding by $37 billion to $49 billion a year, or 5.8% to 7.6% of total program spending. Hospitals could see Medicaid payments shrink by $23 billion to $31 billion annually. That represents a cut of nearly 13% to 17%.”
Nursing homes are another potential financial loser under MFAR. Bloomberg reported (1-27-2020) that “Indiana nursing homes get nearly 40% of their Medicaid funding from supplemental payments, while Utah facilities get 35%, according to the Medicaid Payment Advisory Commission. In Texas, roughly half of the state's 1,200 nursing home facilities receive supplemental payments.”
Reports Modern Healthcare (here), the proposed rule “gives the CMS sweeping new authority to regulate how states finance their Medicaid programs.” The AHA (here) and NAMD (here) both comment on the negative consequences they anticipate for their constituents. Modern Healthcare notes (here) that Governors have begun to pay attention to an area which, for most, represents the largest category of their states’ expenditures: “Governors of both major political parties are warning that a little-noticed regulation proposed by President Donald Trump's administration could lead to big cuts in Medicaid, reducing access to healthcare for low-income Americans.” The Kaiser Family Foundation publishes an issue brief on the subject, here.
READINGS AND REFERENCES
Research Methods Homework
JAMA Surgery publishes a series of short essays with examples and references on research methods. Today (here), a “Practical Guide to Comparative Effectiveness Research Using Observational Data.” Hierarchical multivariable risk adjustment, propensity score techniques, and instrumental variable quasirandomization. Health services research is not for the weak, you know?
U.S. House of Representatives:
Members at https://www.house.gov/representatives
Committees and Members at https://www.house.gov/committees
U. S. Senate:
Committees and Members at https://www.senate.gov/committees
CQ 2020 Calendar of Regularly Scheduled Sessions, here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
February 12, 13, 25, 26, 27, 28
March 2, 3, 4, 5, 9, 10, 11, 12, 23, 24, 25, 26, 27, 30, 31
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.