DCMedical News: Wednesday, January 16, 2019
DCMedical News-DCMN
Washington, D.C.
Wednesday, January 16, 2019
DCMedical News is published every day either the House or the Senate is in regular session.
THE BIG STORY IN HEALTH CARE:
Partial Government Shutdown, Continued: CQ reports that “The House couldn't muster the two-thirds threshold of lawmakers present and voting to pass a continuing resolution reopening closed portions of the government through Feb. 1. The vote was 237-187.”
The Journal of Accountancy has provided a copy of the IRS’ new contingency plan (here). “Temporary funding for the IRS for fiscal year 2019 expired at midnight on Dec. 21. Since then, the IRS has been operating under a contingency plan that furloughed 88% of its workforce, and only 9,946 were considered ‘excepted/exempt’ and allowed to continue working. Under the new plan, 46,052 IRS employees will be considered ‘excepted/exempt’ and will return to work.”
CMS Has Announced a New Timetable (here): “ACOs may apply to the Shared Savings Program, for a Skilled Nursing Facility (SNF) 3-Day Rule Waiver, and/or to operate a Beneficiary Incentive Program (BIP).”
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
Mandatory Bundled Payments for Joint Replacement: Were physician or hospital costs lowered? Well, neither. A comprehensive two-year evaluation of mandatory bundled payments for joint replacement (here) reported that there was a “modest reduction in spending per hip- or knee-replacement episode.” The modest reduction came from a 5.9% decrease in the percentage of episodes in which patients were discharged to post-acute facilities.
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Kavanaugh Ruling on Appeal; The Integrity of Rulemaking Process the Issue: The Supreme Court heard arguments yesterday (transcript here) concerning whether the Department of Health and Human Services can recalculate Medicare Disproportionate Share Hospital (DSH) payments without using the rulemaking process outlined in the Administrative Procedures Act.
The appeal comes from a decision (here) authored by then-Judge Kavanaugh, on the District of Columbia’s U.S. Circuit Court of Appeals. It involves the combination of Medicare Advantage (MA) with traditional Medicare patient days in the calculation of a fraction used to set hospital Medicare DSH payments, a change in the calculation (from traditional Medicare days only) which took place without formal rulemaking. Brief for Allina here, for HHS here, other documents at https://www.scotusblog.com/case-files/cases/azar-v-allina-health-services. Justice Sotomayor gives no ground, supporting the hospital view; also mixing it up in oral argument over the requirements of rule-making were Chief Justice Roberts and Justice Breyer, both seeming to support the government.
Justice Kavanaugh, recused from this appeal, sided with hospitals in deciding that HHS had incorrectly combined Medicare Advantage enrollees with traditional Medicare enrollees, resulting in a loss in DSH payments to the hospitals. Part of Judge Kavanaugh’s opinion focused on an unusual finding in Medicare enrollment: in his opinion (at page four), Judge Kavanaugh writes (without citation to any specific source) “Part C enrollees tend to be wealthier than Part A enrollees. Including Part C days in Medicare fractions therefore tends to lead to lower reimbursement rates.” Allina from Minneapolis, major hospitals from Florida and from New York City are plaintiffs in the case, which has an estimated $3.4 billion nationwide impact.
For the future, the Medicare Act may impede the “flexibility” or “innovation” with which HHS modifies Medicare rules. The Medicare Act, according to then-judge Kavanaugh, requires notice and comment for any rule requirement or statement of policy that establishes or changes a substantive legal standard and governs payment for services. Prior to his nomination to the Supreme Court, a profile of Judge Kavanaugh in the Wall Street Journal (here) noted that he had written forty opinions in which he found an agency action to be unlawful.
Urgent Care Centers, Minor Impact: A new study (National Bureau of Economic Research, here) shows that urgent care centers are having an impact on use of emergency departments only for minor matters, only in locations with multiple urgent care centers, and only in locations with privately insured patients, in fact the primary market target of urgent care centers. The multi-state study compared the use of emergency departments when urgent care centers were open and when they were closed, and, according to researchers, is the first to measure the effect of UCCs on ED use. An early study of claims data from Aetna (here) of twenty million visits for low-acuity conditions over an eight-year period showed a 36% decrease in the use of the emergency department, but a 140% increase in the use of non-emergency department locations.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Optum Becomes a $100 Billion Unit of UnitedHealth: UH reported on its fourth quarter and yearly earnings, earnings call transcript here. Optum, the offspring of Ingenix, child of the McCarran-Ferguson Act (see, e.g., here), is now a $100 billion unit within UnitedHealth, a testament to the growth of data collection in the American (and worldwide) health fields.
DRUGS AND DEVICES
New Product Development or New Price Development, Where is the Inflation in Pharmaceuticals?: David Cutler and colleagues, in this month’s Health Affairs (here), compare rising drug costs for existing vs. new products. Their paper shows that generic prices increased due to new drug entry, whereas the rising cost of brand-name drugs was due to inflation in the price of existing drugs.
Distribution News: The Puget Sound Business Journal reports Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance and Microsoft CEO Satya Nadella announcing that they will work together to counter Amazon.com's recent forays into health care.
READINGS & REFERENCES
“Top-Funded Digital Health Companies And Their Impact On High-Burden, High-Cost Conditions”: There isn’t any. Data analytics (AI, big data!), biosensors, telemedicine, mobile application, nada. “[L]eading digital health companies have not yet demonstrated substantial impact on disease burden or cost in the U.S. health care system,” article in Health Affairs, here.
“National Health Care Spending In 2017: Growth Slows To Post-Great Recession Rates; Share Of GDP Stabilizes”: Following a period of insurance coverage expansion and significant increase in prescription drug spending, growth “slowed” to 3.9% in 2017, compared to 4.8% in 2016. Article in Health Affairs, here.
“It’s Still the Prices, Stupid: Why The US Spends So Much On Health Care, And A Tribute to Uwe Reinhardt”: Gerard Anderson and colleagues (here) reprise Reinhardt’s 2003 article which concluded that prices are the primary reason why the U.S. spends more on health care than any other country, a finding that “remains valid, despite health policy reforms and health systems restructuring that have occurred in the US and other industrialized countries since the 2003 article’s publication.” Resources used in the U.S. (hospital beds, number of physicians, number of nurses) are less than those in the median countries in the Organization for Economic Cooperation and Development (OECD).
Rural Health Information Hub (hospital closures, services lost): https://www.ruralhealthinfo.org/news/topics/closures-of-healthcare-facilities-and-services.
U.S. House of Representatives: Members at https://www.house.gov/representatives, Committees and Members at https://www.house.gov/committees
U. S. Senate: Members at https://www.senate.gov/general/contact_information/senators_cfm.cfm, Committees and Members at https://www.senate.gov/committees/membership_assignments.htm
House and Senate 2019 Calendar of Regularly Scheduled Sessions, here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
Publication dates are the regularly scheduled days the House or the Senate is in session.
Remaining January publication dates: 17, 18, 28, 29, 30, 31
February publication dates: 1, 4, 5, 6, 7, 8, 11, 12, 13, 14, 15, 25, 26, 27, 28
March publication dates: 1, 4, 5, 6, 7, 8, 11, 12, 13, 14, 15, 25, 26, 27, 28, 29
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.