DCMedical News: Tuesday, October 2, 2018
DCMedical News
Washington, D.C.
Tuesday, October 2, 2018
DCMedical News is published every day either the House or the Senate is in session. To subscribe, please see below.
THE BIG STORY TODAY IN HEALTH CARE
FY 2019: The 2019 federal fiscal year (10-1-2018 through 9-30-2019) begins with new regulations, as follows . . .
Hospital inpatient prospective payment system, for acute care and long-term care hospitals, quality reporting requirements, electronic health record incentive programs and other cost and claim reporting requirements, here; Hospice wage index and payment rate updates and hospital quality reporting requirements, here; Inpatient psychiatric facilities prospective payment system and quality reporting requirements, here; Inpatient rehabilitation facility prospective payment system, here; and Skilled nursing facility prospective payment system, value-based purchasing program and quality reporting program, here.
. . . and some corrections to these “final” rules, (on hospital IPPS, 59 pages of corrections, here; and on skilled nursing PPS, 10 pages of corrections, here).
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Rural Hospitals: A comprehensive GAO report (here) on the characteristics of rural hospitals predicts those most likely to close. “From 2013 through 2017, 64 of the approximately 2400 rural hospitals in the United States closed. These 64 rural hospital closures represented the following: More than twice the number of rural hospitals that closed during the prior 5-year period.” Of the factors involved in rural hospital closure, one within federal control was sequestration, the budget-balancing offset (“pay-fors”) to expenditures in non-health areas. “Under sequestration . . . each fiscal year since 2013, nearly all Medicare’s budget authority is subject to a reduction not exceeding 2 percent, which is implemented through reductions in payment amounts.” Heavy dependence of rural hospitals on utilization by older patients (whose care was paid for through Medicare) meant that sequestration was a disproportionate rural hospital burden.
The report recounts the history of an unintended consequence of hospital reimbursement through Diagnosis Related Groups (DRGs, “prospective reimbursement,” a prix fixe adjusted initially for capital, and also for medical education, outlier, disproportionate share and other add-ons). “We previously reported that between 1985 and 1988, 140 rural hospitals closed—approximately 5 percent of the rural hospitals in 1985. The large number of closures in the 1980s was preceded by a change in how Medicare paid hospitals. Specifically, in 1983, Medicare’s inpatient prospective payment system was created, whereby predetermined rates were set for each Medicare hospital discharge. The intent was to control Medicare costs by giving hospitals financial incentives to deliver services more efficiently and reduce unnecessary use of inpatient services by paying a hospital a predetermined amount. However, one consequence of the new payment system was that some small, rural hospitals experienced large Medicare losses and increased financial distress.”
No country for old hospitals: The GAO report found that “Approximately half of the rural hospitals that closed from 2013 through 2017—47 percent—ceased to provide any type of services. The remaining hospitals that closed during this period converted to other facility types, providing more limited or different services, such as urgent care, emergency care, outpatient care, or primary care.”
The report has a useful compendium (Appendix I) of grants, agreements and contracts identified by the Department of Health and Human Services as providing support to rural hospitals.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Thumb on the Scale as Medicare Open Enrollment Period Approaches? October 15-December 7 is this year’s Medicare “open enrollment” period. Marketing by Medicare Advantage plans was allowed to begin yesterday. CQ reports “CMS previously announced that MA premiums will decrease by six percent from an average of $29.81 to $28.00 next year, while average Part D drug premiums are expected to decline for the second year in a row, from $33.59 to $32.50. The department is also allowing private plans to offer non-medical supplemental benefits to their patients, such as adult day care, for the first time.” CMS unveiled a new web site, to assist Medicare beneficiaries in their choice.
Can Short-Term Limited-Duration Health Insurance Plans Protect Against Preexistent Conditions?: This dilemma was presented to the National Association of Insurance Commissioners, Health Insurance and Managed Care Committee, meeting in August (agenda and associated materials here). Presentations were made by the Center on Budget and Policy Priorities on non-ACA compliant plans and the risk of market segmentation; by HHS on STLDPs - - a new acronym, Short-Term Limited-Duration Plans; and by several commercial sponsors of STLDPs (Health Insurance Innovations, GoHealth, Simple Health Plans, IHC Carrier Solutions, Inc.). The presentation by Health Insurance Innovations (slide 3) compares premiums, deductibles and out-of-pocket maximums to Silver Exchange Plans, current and projected for 2019. The current monthly premium for a three-month sample STLDI plan is $79 compared to a median Silver plan premium of $477. But in writing short-term plans to include coverage of preexistent conditions there are major limitations in sample policies: preexistent conditions covered up to $25,000; underwriting questionnaires; deductibles of from $2,500 to $10,000; and significant co-insurance.
READING AND REFERENCE
“China’s Health Care Crisis”: The New York Times profiles (here) strains on “cradle-to-grave system of socialized medicine [which] has improved life expectancy and lowered maternal mortality rates,” but which “cannot adequately support China’s population of more than one billion people.” Inadequate devotion of resources to primary care, scandals, income inequality - - not unfamiliar challenges.
Medical Economics: From a journal closer than most to the practitioner, an article on “4 ways doctor reimbursement could change next year,” here.
EVENTS & MEETINGS
Oct. 3
National Association of Accountable Care Organizations Fall 2018 Conference, Washington, DC, through Oct. 5, agenda here: https://www.naacos.com/agenda-fall-2018
Oct. 15
4:05-5:45 p.m., HHS Secretary Azar on “Affordable Medicines: Access, Innovation and the Public Interest,” at the National Academy of Medicine, Washington, DC. Additional information here.
Oct. 25
1:00 to 5:00, “Top Minds,” Chernew, Dafny and more, “Disrupting the Health Care Landscape: New Roles for Familiar Players,” NEJM Catalyst webinar, https://join.catalyst.nejm.org/events, also sign up for “New Marketplace Survey: Payers and Providers Remain Far Apart,” which reports (here) that “health care stakeholders are not working together to achieve value-based care, but instead are waiting on government regulators to change the payment model – including, possibly, single-payer health care.”
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
October publications dates: 3, 4, 5, 9, 10, 11, 12, 15, 16, 17, 18, 19, 22, 23, 24, 25, 26
November publication dates: 13, 14, 15, 16, 26, 27, 28, 29, 30
December publication dates: 3, 4, 5, 6, 7, 10, 11, 12, 13, 14
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com