DCMedical News: Tuesday, October 15, 2019
DCMedical News-DCMN
Washington, D.C.
Tuesday, October 15, 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
Both Houses of Congress are Back in Session Today
While You Were Away:
The President issued an Executive Order affecting the health field. The order, on Medicare (here), is seen, in part, as a boost for Medicare Advantage (MA) programs (commentary here, also see below, open enrollment).
CMS Proposed Regulations Greatly Expanding Loopholes (Safe Harbors) in the Stark and Anti-Kickback Statutes, nominally to facilitate “value-based payments” from hospitals to doctors (otherwise prevented under current law). The proposal (preliminary copy, 332 pgs, here) will be published in this Wednesday’s Federal Register. Summary analyses of the proposed rule were authored by members of the American Health Lawyers Association, here and here. OIG summary here.
Testimony Began in People of the State of California v. Sutter Health
From the Complaint (here), “hospitals in Northern California’s six most populous counties collect 56% more revenue per patient per day from insurance companies and patients than hospitals in Southern California’s six largest counties.”
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
This is Rich
Waste in the US health system is the subject of a new study published in JAMA (here) whose lead author is an official of Humana, and a former academic medical center official. Commentary here, here and here.
And also . . .
Figueroa and Joynt Maddox (here) explain and opine on the payment trend from physicians’ offices to hospital outpatient clinics for noninvasive cardiac tests: “From 1999 to 2005, the use of noninvasive cardiac tests (NCTs), such as stress tests and echocardiography, grew by 57.1%, from 140 to 220 tests per 1000 patient-years, driven almost entirely by increased use of these tests in outpatient clinicians’ offices. Concerned that this growth represented unnecessary overuse of testing, starting in 2005 the Centers for Medicare & Medicaid Services (CMS) reduced payments in the provider-based office (PBO) setting by half, from $600 to $300 per test on average . . . When CMS cut the PBO rate, the HBO [Hospital Based Outpatient] rate stayed roughly the same. This change resulted in an increase in the HBO to PBO payment ratio from 1.05 in 2005 to 2.32 in 2015, effectively making it much more lucrative to perform the same test in a hospital-based location . . . [and] the proportion of NCTs performed in HBO locations in Medicare fee-for-service beneficiaries increased from 21.1% in 2008 to 43.2% in 2015.” The consequences include “total costs related to NCTs actually increased, given the preferential shift by clinicians to higher-reimbursed HBO testing”; “Because HBO tests are more expensive than PBO tests, as the rate of HBO testing increased, patients had higher out-of-pocket costs”; and “payment discrepancies in HBO vs PBO settings are likely driving greater consolidation of the health care market. During the past 2 decades, hospitals have increasingly acquired physician practices that can then receive the higher HBO rate for providing the same care to the same population. A recent study showed that vertical consolidation can increase physician prices by as much as 14.1%, despite no change in the case mix of the patient population.”
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Outsourcing the Hospital
Bloomberg reports (here) that ten percent of the employees of the John Muir two-hospitals-plus-doctors system in the San Francisco area will be sent to Optum. Optum will then begin managing the business “infrastructure” of the hospital, under a ten-year contract. “UnitedHealth is best-known for running America’s largest insurance carrier, UnitedHealthcare. But Optum has become a juggernaut, housing a pharmacy-benefit manager, OptumRx, and a care-delivery business, OptumHealth, that employed more than 35,000 physicians at the end of 2018.” UnitedHealth will have announced third quarter earnings before market opening this morning; revenue is estimated at $60 billion for the quarter, reports Seeking Alpha.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Open Enrollment Begins Today
The Medicare “open enrollment” period begins today, and ends December 7. The primary purpose is to enable or induce those enrolled in old-fashioned Fee-for-Service Medicare to switch to (highly profitable, for insurance carriers) Medicare Advantage (MA) plans. CMS is widely perceived (here, here) to be putting a thumb on the scale in favor of the MA plans. MA plans generally claim better performance on health measures, compared to traditional Medicare. However, that appears to be the result of this anomaly—CMS does not use the same sources of information to compare Medicare to MA plans, since MA plans are not required to report on those metrics. Limited studies, such as this one on post-acute care as measured by risk-adjusted readmission rates (here), report MA performance to be inferior.
Medicaid Work Requirement Expenses
The General Accountability Office found (here) that implementations of work requirements for Medicaid eligibility in five states entails nearly half a billion dollars in administrative expense, most of it to be paid for by the federal government. From the summary: “Medicaid demonstrations enable states to test new approaches to provide Medicaid coverage and services. Since January 2018, the Centers for Medicare & Medicaid Services (CMS) has approved nine states’ demonstrations that require beneficiaries to work or participate in other activities, such as training, in order to maintain Medicaid eligibility. The first five states that received CMS approval for work requirements reported a range of administrative activities to implement these requirements. These five states provided GAO with estimates of their demonstrations’ administrative costs, which varied, ranging from under $10 million to over $250 million . . . The estimates do not include all costs, such as ongoing costs states expect to incur throughout the demonstration.”
DRUGS AND DEVICES
What is Happening with Drug Price Legislation?
Indexing, importing, most-favored-nation purchasing, banning rebates, advertising prices, changing the rules for protected classes—all among the proposals left hanging. STAT+ reports (here) a useful summary, with links to source material.
READINGS AND REFERENCES
Statista Reports on Wealth, Privilege and Accomplishment
“Ten percent of the richest people in the United States own almost 70 percent of the country’s total wealth . . . Looking beyond that wealth threshold, the top 1 percent held about half of that wealth, with 32.4 percent of wealth concentrated in these households,” here, with a similarly impressive performance for $30 million net worth plus individuals graduating from a small number of universities (here), and immigrants providing a disproportionate share of U.S. Nobel Prize winners, here.
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
October publication dates: 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.