DCMedical News: Tuesday, September 24, 2019
DCMedical News-DCMN
Washington, D.C.
Tuesday, September 24, 2019
DCMedical News is published every day both the House and the Senate are in session. Subscription information below.
THE BIG STORY IN HEALTH CARE
DSH Disappears ($4 billion FY 2020, $80 billion/year through 2025) Without StopGap
CMS has published a “final rule” (here) which, without modification in any budget bill for FY 2020 (“StopGap” from October 1 to November 21 or other), will result in dramatic reductions in the Disproportionate Share Hospital supplemental Medicaid payments received by “safety net” hospitals, that is, those which serve a “disproportionate” share of government-paid patients. “The Centers for Medicare & Medicaid Services (CMS) released a final rule to implement statutorily required Medicaid disproportionate share hospital (DSH) allotment reductions that are currently scheduled to begin in FY2020. The rule finalizes a methodology to calculate the annual reductions for FY2020 through FY2025 outlined in the table below. The methodology includes five factors outlined in 1923(f) of the Social Security Act, which include the uninsured percentage factor (UPF), high volume of Medicaid inpatients factor (HMF), high level of uncompensated care factor (HUF), low DSH adjustment factor (LDF), and budget neutrality factor (BNF). CMS will calculate individual states’ DSH reductions using each respective year’s preliminary DSH allotment as currently calculated under statute.” Reductions begin with $4 billion in FY2020 and continue with $8 billion in each of the following five years. Architects of the Patient Protection and Affordable Care Act “bargained away” DSH payments (see Title II, section 2551, Subtitle G), believing that Medicaid expansion and exchange health insurance programs would insure those on whose behalf such payments were made. In fact, the 50 million uninsured were reduced to 30 million uninsured.
Private Equity, Doctors, Hospitals Achieve Delay in Surprise Bill Measures
The Hill reports (here) that “The House Education and Labor Committee has called off plans to vote on legislation this week to protect patients from ‘surprise’ medical bills because of divisions among lawmakers on the panel . . . The panel had been planning to hold a markup on legislation to protect patients from getting massive medical bills when they go to the emergency room and one or more doctors treating them turn out to be outside of their insurance network, a problem that lawmakers in both parties say is a top priority. But the push has hit fresh obstacles amid a fierce lobbying push from doctors and hospitals and disagreements about the best way to address the problem.” Doctors, their lobbyists and their Congressional defenders favor the “New York approach” (see DCMN 9-20-2019) of outside arbitration, versus de facto fee setting.
CBS Evening News continued its series on outlandish and punishing medical bills Monday night, claiming a 52% increase in out-of-pocket health care spending since 2010, that is, since passage of the Patient Protection and Affordable Care Act, interviewing a doctor/columnist who was a strong supporter, now concerned about the bills to patients. Bloomberg has published a list (here) of 900 acquisition “deals” thus far in 2019. Leading the list are long term care, physician practices and health IT.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
MACPAC (the Medicaid and CHIP Payment and Access Commission) Meets September 26 and 27, Agenda here, meeting announcement and summary here.
MACPAC has published comments (here) concerning the monitoring of access by Medicaid beneficiaries to health services under the fee-for-service (FFS) program. Pleading administrative expense, CMS has proposed (see proposed rule, Medicaid Program; Methods for Assuring Access to Covered Medicaid Services—Rescission, 84 Fed. Reg. 33722, July 15, 2019) to reduce the level of such monitoring. MACPAC responds, “[E]ven though managed care is the dominant delivery system in Medicaid, more than half of Medicaid spending nationally is for services provided under FFS arrangements. Second, the populations that are most likely to remain in FFS Medicaid, such as individuals with disabilities, are among the most vulnerable, and ensuring their access to services is particularly important given their high health needs. Third, even in states with high managed care penetration, certain services, such as long-term services and supports, behavioral health services, and dental services, are often carved out of managed care contracts and provided through FFS arrangements. Furthermore, monitoring access can be used to support assessment of program value, act as a mechanism for accountability, and help identify problems and guide program improvement efforts.” As noted in the MACPAC letter, “access” is the entire point of authorizing such benefits. Meanwhile, Tennessee has become the first state to receive approval to conduct Medicaid under a “block grant,” (Washington Post coverage here).
DRUGS AND DEVICES
Study Says Hospitals Keep the Lion’s Share of Pharma Revenue from Physician-Administered Drugs
“In the commercial market, hospitals retain a disproportionately large share of the gross profit margin in the supply chain for physician-administered medicines relative to physician offices. Hospital profit margins can also result in hospitals retaining more than the biopharmaceutical manufacturer,” or so says a study (here) by the “Partnership for Health Analytic Research.” Also, “Physician offices and hospital clinics treat similar numbers of patients in the commercial market, but hospitals receive a larger share of the gross profits. Hospitals collect 91% of the gross profit margin while serving 53% of patients receiving physician-administered medicines.” Finally, “Hospital clinics retain more than biopharmaceutical manufacturers for medicines administered in the outpatient setting. For every $100 spent on physician-administered medicines in the hospital outpatient setting, the hospital retains $58, while the manufacturer receives less than $42.4. This suggests that hospitals are earning more from administering medicines than the manufacturers who created the medicines and is consistent with recent research published by the Moran Company, which found that in the commercial market hospitals retain 2.40 times their acquisition cost for a basket of 20 brand medicines.”
READINGS AND REFERENCES
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.
Committees and Members at https://www.senate.gov/committees
House and Senate 2019 Calendar of Regularly Scheduled Sessions, here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
September publication dates: 25, 26, 27
October publication dates: 15, 16, 17, 18, 21, 22, 23, 24, 28, 29, 30, 31
November publication dates: 12, 13, 14, 15, 18, 19, 20, 21
December 3, 4, 5, 6, 9, 10, 11, 12
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.