Some hospitals throughout the country are barely managing to survive given that many avenues of their revenue have been shut down during the COVID-19 pandemic. Most hospitals have cancelled elective procedures and routine care which represent over half of all hospital revenue in order to ensure that there are enough beds and critical care resources for the potential surge of COVID-19 patients. How did this occur?

During the late winter, The World Health Organization in conjunction with the Department of Health and Human Services and the Centers for Disease Control and Management developed a “Hospital Preparedness Checklist” for US Hospitals that included the following to plan for the projected surge in COVID-19 patients:

• Elimination of all non-essential visits and procedures (including elective surgeries) and
• Elimination of routine care for those with chronic and/or stable medical conditions

The intention was sound, particularly based upon the Italian experience where the death rate was significantly higher from COVID-19 due to lack of availability of essential critical care services and personnel.

The predictions were right and wrong. Many high-density population centers like New York City and New Orleans experienced the ‘surge’ and desperately acquired additional personnel and equipment. However, many parts of the country (particularly more rural states like New Hampshire) did not. As a result, many healthcare organizations saw a significant drop in volumes and revenue as hospital productivity plummeted.  In addition, the cost of treating COVID-19 patients was not adequately covered by either public or private payers which further depleted revenues. This has had serious consequences for hospitals and healthcare systems everywhere with:

• Significant fall in revenue (40%-60%)
• Deteriorating margins to invest in needed equipment and personnel
• Furloughs for long standing employees
• Higher cost of capital with impaired bond ratings
• Depletion of days cash on hand with several NH hospitals predicted to be cash depleted by early summer

Thus, hospitals need to quickly pivot and change course in order to avoid a threat to the very viability of the essential healthcare services upon which their communities rely.

What are the solutions?

1. Rapidly expand telehealth and virtual capabilities. Healthcare, like every other industry is digitalizing so that patients and consumers can receive routine and necessary services VIA I-phone or Android 24/7 at a low cost. Some organizations like Stanford University Health Center in Palo Alto, California are far down this path and provide over 1/3^rd of their total routine primary care services virtually. Most healthcare organizations have barely put their toes in the water. The good news is that the cost for these services is 95% less than the traditional face-to-face model. The advantage of creating a virtual healthcare delivery platform is that it can be done locally, regionally, or outsourced all together with little capital investment. Individuals with chronic conditions (e.g. diabetes, hypertension, heart disease etc.) should not have their care curtailed as this will only make their ongoing conditions worse.

• Resume elective procedures safely. Elective procedures constitute the revenue ‘life-blood’ of a healthcare organization and enable other critical care and necessary services to occur. These can be done during a pandemic utilizing either a ‘hospital within a hospital’ or ‘parallel organization’ model where there is complete segregation of COVID-19 positive (or possibly positive) staff/patients from those who are definitively negative without symptoms or who have established COVID antibodies. Every healthcare organization is obligated to screen and stabilize potential COVID-19 patients; however, there is no obligation to provide definitive treatment at each and every facility and the care of COVID patients should be regionalized and systematized so that once a COVID-19 patient is identified, screened and found to be high risk (requiring either hospitalization or ICU care), they are transferred to a regional COVID center where there is dedicated personnel and critical care equipment to address their needs 24/7 with intensivists.

• Expand or reduce COVID and non-COVID services based upon rapidly changing demand over time. According to the Centers for Disease Control and Prevention (CDC), COVID-19 is likely to have several peaks and quiescent periods over a one to two-year period. This means that hospitals and healthcare systems cannot be held hostage by the pandemic indefinitely but must be able to rapidly adapt to changing demand based upon local and regional spread or containment of the virus.

In order to achieve these goals, the State of New Hampshire through the Governor’s Task Force will need to establish a New Hampshire COVID-19 Supply Chain to ensure sufficient supplies,  testing and personal protective equipment (PPE)  which will require direct  contracting with corporate entities willing to sell directly to our State due to the depletion and inflated cost of federal supplies and tests.

This pandemic has revealed a fundamental tension: public safety v. a failing economy. Hospitals, like every other business in America, will have to balance ensuring that the public is safe from unnecessary exposure to COVID-19 with its primary mission to maintain essential healthcare services to the communities they serve. It is not an either/or and we must develop a more nuanced and adaptive model for our hospitals to screen and care for COVID patients while maintaining innovative ways to preserve their core business so that along with the communities they serve, they will survive the pandemic as well.

The post The COVID-19 Pandemic: How Hospitals Can Survive appeared first on Burroughs Healthcare Consulting.

That being said, here are some facts that confound most of my colleagues in the healthcare professions based upon the world’s radical economic response to this particular disease entity.

1. While COVID-19 is 34 times more virulent than influenza, influenza is 1,000 times more prevalent and each year infects one billion people and causes 650,000 deaths worldwide. In the United States alone, there have been 40,000 deaths since January 1 from influenza and nobody hears anything about this on television. What is more incredulous is that almost 50% of Americans choose not to be immunized against influenza or pneumonia which has a significant impact on mortality and morbidity rates.

1. Most cases of COVID-19 are either mild (>80%) or sub-clinical; thus, it is impossible to both identify the true incidence of the disease nor to prevent its transmission as the majority of people who carry the virus will be unaware.

1. Most individuals under the age of 60 who are in good health and have no significant underlying medical condition (e.g. hypertension, heart disease, lung disease, diabetes, cancer, immunosuppression) are at little (if any) risk of dying from this disease. COVID-19 is most dangerous to the frail elderly, particularly those with significant underlying conditions, thus, there should be different recommendations for these two groups as the potential consequences from exposure to this disease are significantly different.

1. All of our preventive measures (social isolation, cancellation of group events, screening etc.) will decrease the short-term magnitude of the problem but not the total number of individuals infected. The bell curve will simply be flatter and spread over a longer period. This is good for healthcare organizations that will be potentially overwhelmed but will not change the overall incidence and prevalence of the disease.  In addition, spreading the curve out over time through social isolation and cancellations will have a devastating impact on our economy which will impact individuals’ healthcare insurance and employee benefit coverages which can also directly increase risk to individuals with any significant healthcare condition. Unfortunately, our government’s denial of the magnitude of the problem eliminated the possibility of effectively doing this with widespread testing as that window is now past.

• COVID-19 while significant, is by far not the most dangerous viral infection we have encountered. SARS (which originated in China) had a mortality rate of 10%, MERS (which originated in the Middle East) had a mortality rate of 34%, and the infamous Spanish Influenza pandemic of 1918, killed almost 100 million people or 5.4% of the world’s population, most of whom were young and healthy.

What all of this means is that we should be vigilant and take common sense precautions and particularly protect those most vulnerable to a life-threatening infection. What we should not do is to manage this problem with fear, anxiety, and the political impact of an election year. Let healthcare and public health officials take charge and ask all of our politicians to step aside and defer to the experts who manage worldwide epidemics and pandemics on a daily basis based upon expertise and science and not on political expediency.

The post Worldwide Response to COVID-19 out of Proportion to Relative Risk appeared first on Burroughs Healthcare Consulting.

While occurrences of surprise medical bills flew mostly under the radar for a long time, as high healthcare cost discussions retain center stage, the topic is being widely discussed. It seems to be something that both political parties can agree upon.

Most people with health insurance know that they need to check with a provider before using said provider to make sure that healthcare professional is in-network. That’s all well and good, except for those times when they’re incapacitated, as in an emergent situation, and they need care fast, at the closest facility able to receive the care that is needed. Maybe they can’t talk and maybe they have no one with them to advocate; a typical recipe for a surprise medical bill.

Another recipe for a big bill: ending up in a facility that is in network, but having a provider care for them who isn’t, a situation that befalls many Americans each year. Of course, it would be ideal if the facility or provider would say, “I’m not in your network,” but at that point, what can a patient really do?

We’re Afraid: Very Afraid

The Kaiser Family Foundation says that two-thirds of us are “very” or “somewhat” worried about unexpected or surprise medical bills. They occur because of a difference in cost-sharing levels between in-network and out-of-network charges. And they happen when out-of-network providers, who aren’t bound by contracts, bill patients directly for additional charges.

The foundation shares that the majority of bills aren’t that big, below the $500 mark, but we’ve all heard the horror stories of exorbitant bills that threaten to bankrupt the unsuspecting patient.

Approximately one in five emergency room visits result in a surprise bill. Sometimes patients can negotiate bills much lower and sometimes not. And the process can require hours and hours of time.

As Kiplinger advises patients and the medical community can at large, it’s smart to ask if everyone involved in a procedure is in network. Consumers are advised to check out state protections, since some states don’t allow surprise billing. They should never pay that bill before calling both insurer and provider to ask “Why”? and then should ask for itemization. Then, when all else fails, as it frequently does, they should appeal, via the state insurance department’s consumer services or healthcare advocate.

Sometimes even that can’t solve the problem.

Lawmakers Take Action

If it all sounds hopeless for the unfortunate patient, in reality, it often is. President Donald Trump spoke on May 9, 2019, along with a patient who was billed $110,000, even with insurance.

“So this must end,” he said then. “We’re going to hold insurance companies and hospitals totally accountable.”

On July 17, 2019, the House Energy and Commerce Committee passed an amendment to H.R. 3630, the No Surprises Act. The legislation contains a third-party arbitration clause and will make its way to the House for its next review. It was introduced in mid-May as a discussion draft.

Both providers and payers have an opportunity for independent arbitration specifically, says Healthcare Dive, which reported the action early. They can do that, according to the amendment, when the median in-network rate is more than $1,250, a change from previous wording that specified a benchmark payment rate if disputes arose. That term, benchmark, is defined as the maximum amount per member per month that the Centers for Medicare and Medicaid Services will pay a Medicare Advantage organization that delivers traditional Medicare benefits.

We Have Choices

Other things are happening, and they’re not just wishful thinking. The Senate introduced S.1531, Stopping the Outrageous Practice of Surprise Medical Bills Act of 2019 on May 16. It’s with the Committee on Health, Education, Labor, and Pensions.

Lower Health Care Costs Act of 2019, S.1895, that debuted on June 19 includes language about precarious air ambulance bills. Its currently resting on the Senate Legislative calendar and also contains language about keeping costs transparent and tackling the equally hot topic of too-high drug pricing.

There’s also H.R. 861, End Surprise Billing Act of 2019; S. 1266, Protecting Patients from Surprise Bills Act; H.R. 3502, Protecting People from Surprise Bills Medical Act; and H.R. 3784, To amend title XXVII of the Public Health Service Act and title XI of the Social Security Act to prohibit surprise billing with respect to air ambulance services, just introduced on July 16. 

Some For, Some Against

The issue is made more complex by the fact that states may do things differently in terms of resolving differences between provider claims and insurer reimbursement. As Yahoo! Finance reports, New York and Connecticut utilize independent reviews that cite a database as the benchmark, while New Jersey uses arbitration. And at the root of this, there are no federal regulations — but that is about to change.

As expected, opponent and proponents have voiced their opinions about the No Surprises Act. The American Hospital Association says it supports arbitration, America’s Health Insurance Plans says “no” and The ERISA Industry Committee (ERIC) cites “government-mandated baseball-style arbitration in this legislation,” and no longer supports the act.

With so many wheels spinning around such a complex topic, one could wonder how long it will take to get through all the layers to bipartisan legislation that gets the job done. Yes, there’s a lot of noise around surprise medical bills, but for the American consumer, it certainly beats the sound of crickets.

The post Love a Surprise? Not with My Medical Bills, Please appeared first on Burroughs Healthcare Consulting.

Employer-sponsored health plans cover more than 155 million employees in this country.

Enthusiastic administration officials say the plan will give the private insurance market a shot in the arm, and help small businesses offer health coverage to all levels of employees. The healthcare community is calling this HRA expansion.

As the National Law Review explains in extensive legal detail, the new law reverses long-standing ACA policy that prevented HRAs or premium payment plans from being used to reimburse premiums paid for individual market coverage. The new HRAs give employees the freedom to purchase insurance in the individual market, from an exchange or not.

‘Your Attention Please’

On June 13, three departments — Health and Human Services, Labor and the Treasury —teamed up to announce the new policy that becomes effective Jan. 1, 2020. Business owners can provide an individual coverage HRA or ICHRA (Yes, another acronym) or an excepted benefit HRA.

The HRA experts at PeopleKeep, personalized benefits automation software providers, explain the nuances of these two options this way. The ICHRA allows employers to give employees a set amount of tax-free money each month, to spend on healthcare and/or individual health insurance, and then be reimbursed up to that amount.

The excepted benefit HRA mandates that employers offering group health plans offer an HRA that reimburses for dental and vision coverage, along with short-term premiums.

The federal government’s announcement says that more than 11 million American workers, which include 800,000 uninsured, will ultimately enroll in HRA plans. That 800,000 number is used again, referring to companies that will likely jump on the HRA bandwagon, with almost 90 percent employing fewer than 20 people.

A Brief History of HRAs

HRAs aren’t anything really new, hence the current “expansion” label. They were ticking along until 2013 when the IRS wrote guidance with IRS Notice 2013-54 around the Affordable Care Act that cut employers’ ability to offer HRAs. The agency said “OK” to HRAs paired with group health coverage but “no” to a combo of an HRA and individual coverage.

In December 2016, enter the qualified small employer HRA or (You guessed it: another acronym) QSEHRA (Some people call it “Q-Sarah.”). It’s great for smaller employers, those with 50 or less on board. The employer can put away money every month for staff to buy their own individual health insurance or spend on necessary medical costs and again, it’s all tax-free.

Fast forward to fall 2017, when President Trump’s executive order directed the above three departments to revisit that 2013 guidance so all employers could pair the HRA with individual coverage for their employees. A year later, the 2013 rule was gone in favor of that duo of HRAs we’ve just described — and here we are.

Those in Favor Say “Aye”

Supporters say that since employers need to provide health insurance as a highly desirable benefit in a tight employee market and that doing so can be expensive, the new HRA alternative is ideal.

It doesn’t mandate that an employer choose just one health plan for its entire employee group, which can sometimes be an expensive proposition. Those same employers can also reap tax benefits that big corporations do but can do it a different way with the HRA, which, as noted, excludes premiums from federal income or payroll taxes.

On June 14, Brian Blase, special assistant to the president at the National Economic Council focused on healthcare policy, wrote for CNN that “the Obama administration forbade workers in the individual insurance market to use HRAs to pay for coverage — significantly impeding employer flexibility and worker choice. Trump’s new rule undoes this misguided restriction.”

He notes that 80 percent of employers that offer insurance only offer one type of plan. He also shares that between 2010 and 2018, the proportion of workers at firms with three to 49 workers covered by an employer plan fell by more than 25 percent.

The often controversial yet undeniably influential Blase thinks that HRAs may bolster the individual market by more than 50 percent, yielding more competition that ultimately delivers better choices for consumers. Insiders credit him for getting the HRA rule done and note that, ironically, he’s leaving his job soon.

In an opinion in The Washington Post, Avik Roy, president of the Foundation for Research on Equal Opportunity cheers the move, saying it could cause a revolution in the private insurance market. Roy even goes a step further, suggesting the administration require “all newly incorporated businesses seeking the tax break for employer coverage to do so through HRAs.”

Those Opposed Say “No”

True, under the HRA system, employees do have free rein to choose a plan that works with their budget, which receives rave reviews in some circles, and a thumbs-down in others. So an employee with champagne healthcare coverage taste could go for broke, while another might choose bottom-of-the- barrel coverage which provides the bare minimum and leaves them exposed to a sky-high deductible, as with some catastrophic plans.

Short-term or limited benefits plans can expose consumers if the plans discriminate against pre-existing conditions, says the former editor of Modern Healthcare, Merrill Goozner. He sounds the alarm bell about HRAs, calling the move another way to undermine the ACA exchanges.

And here’s something not mentioned in that announcement, says Goozner: “Moreover, if an employer no longer offers an employer-provided health plan, an employee that accepts HRA cash could be cut off from receiving premium tax credits on the ACA exchanges.” He says that many employers will get lost trying to understand the detailed parameters around eligibility — it will be Greek to them — which will in fact buff up employment “for insurance brokers and employee benefit consultants.”

Joining the “not-so-fast-here” congregation, Larry Levitt, senior vice president of the Kaiser Family Foundation, tweeted about an irony he perceives with the entire situation. He believes HRAs can only fly “if the ACA individual insurance market is stable and attractive,” and as he noted, and we’ve written about here, the current administration has tried on numerous occasions to undermine that market.

Finally, Speaker of the House Nancy Pelosi responded with a formal statement, which said, among other things, that “the Trump Administration has worked relentlessly to push families into disastrous junk plans, increase their health care costs and gut their health care protections.”

Truthfully, the rules around this new rule are very complicated, experts agree. The Trump administration has adopted what’s been termed an aggressive timeline, and 2020 is just around the corner.

The post ‘Hurray’ for HRAs? Maybe So or Maybe Not appeared first on Burroughs Healthcare Consulting.

Domestic measles was eliminated with the dawn of the new millennium, but thanks to international travelers, the disease wasn’t “long gone.” Outbreaks occurred here in the early 2000s, in 2011, and in 2013, 2015 and 2017. As the New York Times reported, the recent outbreak that’s created measles chaos in New York State may have originated in the Ukraine. 

From January 1 to April 4, 2019, more than 465 individual cases of measles have been confirmed in 19 states. The word “measles” is not just about measles, for this is serious: Measles is highly contagious.

As the Centers for Disease Control and Prevention (CDC) noted in its last statistics statement,

Common complications can result in ear infections and permanent hearing loss, along with diarrhea. Severe complications can include pneumonia, encephalitis — with deafness or intellectual deficits — plus, one or two children out of every 1,000 die from measles. 

The Threat is Worldwide

“You would think” that reason would rule in 2019, but the World Health Organizationhas named vaccine hesitancy as a top 10 global health threat for this year. The anti-vaxxer movement certainly bears some blame, as do these reasons parents say they don’t vaccinate:

• Vaccines infringe on their rights: Do bicycle safety helmets and seat belts? Many parents resent being told anything about how to parent their children, and they especially don’t like “big government” weighing in.

• Vaccines are not safe: Let us not forget that the infamous Wakefield and colleagues study was retractedin 1998 that linked the measles, mumps, rubella (MMR) vaccine  to autism. A March 2019 study of more than 600,000 children, published in the Annals of Internal Medicine,strongly supports that the holds no viable autism risk — and it’s not the first piece of research to conclude this. The CDC has also concluded that there’s no connection between vaccines and autism, and yet, some parents won’t hear of it.

• Vaccines add lots of money to big pharma’s coffers: In truth, pharmaceutical companies make a minimal profit from vaccines — they make much more elsewhere.

• Vaccines aren’t “natural”: Parents who say contracting measles is a great way to build immunity aren’t considering the science. To gain immunity to measles, a child would face a 1 in 500 chance of death. Less than one in 1 million people have a severe allergic reaction from the MMR vaccine. 

The spread of inaccurate measles information on social media may have met a temporary match. While some social media sites dispensed with mythological content previously, with Pinterest taking a notable stance in 2017, Facebook and its little sister, Instagram, basically had held out until now. Search for hashtag #vaccineskill.

Both are now taking steps to restrict viewing or lessen the reach of vaccination falsehoods in either posts or advertising. Pro-vaccinators and health officials note that this is all a work in progress.

The Law and Vaccines

On April 9, health officials in New York City required vaccinations in areas of Brooklyn, such as Williamsburg, shortly after a state judge quashed a regulation that kept unvaccinated children away from public locations in Rockland County — a state of emergency had been declared there. 

The outbreak has been particularly severe among the Hasidic Jew community. Some unvaccinated members traveled to Israel last fall, where measles was rampant.

Ardent anti-vaxxers wear yellow stars, and say that forcing vaccinationsor enforcing restrictions around those not vaccinated has much in common with treatment of Jews during the Holocaust — which religious academicians say is a stretch. 

“Forcing” vaccinations is a contentious topic, but it’s grounded in law. A legal precedent was set in 1905 in the U.S. Supreme Court, Jacobson v. Massachusetts, when states were granted the authority to enforce vaccinations in the public interest. Legal experts say that’s all well and good, but state and local laws further complicate things.

All states allow for some type of exemption from vaccination, or re-vaccination. Three types are most common: medical, religious belief and personal/conscientious belief. On April 10, 2019 the state of Maine voted 8 – 5 to end non-medical exemptions by fall 2021. Officials say more than 9,000 students there hold non-medical exemptions.

Washington and Oregon are considering similar legislation. Maine has high rates of pertussis or whooping cough, which can be prevented by vaccination. Proponents say the new bill would be helpful to children with weak immune systems — they’re not normally vaccinated.

The CDC reports 426 cases of mumps through March 29, with Temple University managing an outbreak currently.

Measles is Real

On KevinMD, pediatrician Dyan Hes, M.D., in New York’s Gramercy Park, shared that she responds to anti-vaxxers this way: “If vaccines were unsafe why would I do this? I would lose more sleep than you because every night I would have to worry that something terrible may happen to your child. That would be a terrible business model for me.”

She admits her practice grew slowly when parents brought prenatal patients to her, and 

when she shared her policy — that she lost 50 percent of potential clients. She didn’t care, because pediatricians don’t make money off vaccines, and may even lose money. 

Practitioners on the front lines have heard it all, including pediatric nurse practitioners. They say they frequently participate in discussions with parents who are on the fence, or who are absolutely, positively not going to vaccinate. They also say they know that parents really are on a path to do what’s right, and not what’s wrong, and that it can take time to motivate anyone to change their mind. They’re willing to take that time.

Healthcare practitioners now find themselves campaigning to save lives, something they probably didn’t imagine doing a few years ago.

As a Washington state pediatrician told The Seattle Times, “Before, measles was so theoretical. Nobody had ever seen it,” the pediatrician said. “All of a sudden, it became tangible.”

What You Can Do

As you read this, you may be asking what you can do to prevent an outbreak and how you can ensure immunization compliance. There’s plenty.

1. Screen for immunization compliance:In the case of the Brooklyn outbreak, local officials declined to do random spot checks on students, according to the New York Times. When they discovered new cases, they opted instead to look at vaccination records of people in contact with the infected people. Officials did state they’d issue violations and fines if residents held their ground. For those stalwarts who received fines but no vaccination, legal counsel was to be consulted.

The CDC keeps no records of vaccinations, but suggests that residents check with parents or caregivers, high school or college health services, previous employers, and physicians, public health clinics and pharmacies. It reiterates that it’s safe to repeat vaccines, although it’s not the most ideal scenario.

2. Do outreach communication to the community to counteract the anti-vaccine craze:

The CDC has noted the following interventions as “recommended” when communicating with patient populations: client reminder or recall systems; community based-interventions implemented in combination with other interventions; patient or family incentives; and home visits, outreach, and case management targeted to particularly hard-to-reach populations. Reach to local media, print, digital and electronic, with public service announcements and pro-vaccine, evidence-based articles authored by experts and offered at no charge to print and digital media. Offer experts for on-camera interviews for both online and television opportunities. Consider mailings within your targeted zip codes. Encourage your providers to ask the question, “Are you vaccinated?” of both children and adults. Offer your speakers bureau to do presentations to strategic groups. Post notices and accurate information on local Facebook, Next Door and other social media platforms. Inquire about vaccine acceptance within local churches and if it’s a “yes,” invite participation there.

3. Notify schools and public agencies.

As part of a comprehensive communications campaign, make sure local schools, community groups and public agencies actively participate in spreading the urgency about maintaining vaccine schedules. Disseminating accurate, comprehensive take-home literature should be an important component at all locations.

4. Actively campaign to ensure full immunization among covered lives.

Health plans benefit when members get vaccinated. With so many messages being conveyed about health and wellness, ensure that especially during times of outbreaks, that your “get vaccinated” message remains a top priority on your members’ to-do lists. Remind them that Marketplace plans and most other private insurance plans must cover certain vaccines. 

Finally, vaccination is a public health and part of our role as healthcare leaders is to ensure that our communities are protected from the risks that once caused great harm and could do so again if we are not vigilant.

The post Anti-Vaxxers Vs. the World appeared first on Burroughs Healthcare Consulting.

It is extraordinarily rare when the U.S. Department of Justice makes an argument for undoing a law, particularly one that’s been on the books for less than a decade. But that is exactly what happened this month as part of a curious legal case that has the potential to unravel the Affordable Care Act.

            In its brief, the Justice Department argued that when last year’s tax legislation reduced to zero the individual mandate penalty to buy health insurance, it also negated parts of the ACA that mandated insurers sell policies without discrimination and not charge sicker patients higher premiums. As a result, the DOJ argues, the entire law must fall. It sided with the 18 states that sued to overturn the law, claiming that “the numerous provisions of the ACA that work together…cause them cognizable injury.”

https://assets.documentcloud.org/documents/5985995/DOJ-Brief-Texas-v-US.pdf

            The brief is part of an appeal by 18 state attorneys general advocating to keep the ACA on the books to the Fifth Circuit Court of Appeals. Reed O’Connor, a lower district court judge in Texas, ruled late last year that the ACA was unconstitutional.

No matter your political beliefs, O’Connor’s decision is a curious piece of jurisprudence that at times seems dismissive of logic and reality. 

The judge’s ruling relies primarily on two legal concepts: Legislative intent and severability. The first is to discern the intent of the legislative bodies that originally passed the law. The second determines whether the law itself could continue to function if a portion of it were eliminated.

O’Connor’s conclusion is unambiguous: “Congress was explicit: The individual mandate is essential to the ACA, and that essentiality requires the mandate to work together with the act’s other provisions…if the ‘other provisions’ were severed and preserved, they would no longer be working together with the mandate and therefore no longer working as Congress intended. On that basis alone, the Court must find the individual mandate inseverable from the ACA.”

O’Connor relies on the text produced by the 111th Congress that passed the ACA in 2010, while seemingly disregarding the intent of the 115th Congress that repealed the financial penalty in last year’s tax bill, all the while leaving the individual mandate and the rest of the ACA in place.

“Just as the 2010 Congress subjected some individuals to the individual mandate but no shared-responsibility payment, the 2017 Congress subjected all applicable individuals to the individual mandate but no shared-responsibility payment. Congress never intended the two things to be one,” O’Connor wrote. Moreover, he insists in his decision that “both Congresses manifested the same intent: the individual mandate is inseverable from the entire ACA.”

Harry Nelson, a California attorney and co-author of a book on the legal battles involving the ACA, described the legal reasoning as absurd.

“(Congress) has had the opportunity if they wanted to get rid of the whole law, and yet made a very conscious decision not to, even as the mandate was being carved out,” Nelson said.

O’Connor’s decision also seems to discard the reality that tens of millions Americans continue to receive healthcare coverage as a result of the ACA, whether they are lower-income individuals who receive Medicaid coverage, or those in the middle-income brackets who are able to purchase discounted coverage through the state and federal exchanges due to premium tax credits. Exchange premiums actually fell in many states for 2019, even though the Trump administration tinkered with rules shortening the open enrollment period, cut the cost-sharing reduction payments made to insurers, and all but eliminated the marketing budget for the exchanges (https://www.kff.org/health-costs/issue-brief/tracking-2019-premium-changes-on-aca-exchanges/).

 Whether the Supreme Court takes up the case remains to be seen. It previously ruled just seven years ago that the ACA was constitutional, but did make Medicaid expansion optional for states, although more than 60 percent have expanded coverage so far. If the appellate court favors validating the ACA, it is possible the Supreme Court may decide not to explore the issue any further.

Josh Blackman, an associate professor at the South Texas College of Law and a conservative, noted in a recent interview with Texas Public Radiothat “even if the Supreme Court affirms Judge O’Connor’s ruling, the case would then go down to the lower court to decide what the remedy is.” (https://www.tpr.org/post/texas-led-challenge-obamacare-moving-quickly-heres-what-means).

Should the Supreme Court intervene and strike down the law, Nelson believes the fallout could be catastrophic.              

“It would be very difficult to rectify, and the question would really fall upon the states, and it would be an enormous financial burden on those states,” Nelson said. For example, he noted that Medicaid enrollment in California after the ACA was enacted nearly doubled, to 14 million, or about one in every three residents. Maintaining their coverage would cost state taxpayers tens of billions of dollars a year.

Leaders in the GOP have said they wanted to replace the ACA after it was repealed, but have not yet put together such replacement legislation. It also appears uncertain if the Democratic-led House of Representatives would be willing to work with the Republican-controlled Senate and the Trump administration to create an ACA replacement.

In the meantime, the lives of some 20 million Americans could be impacted by the decisions made by the courts in the future. Either way, the future of healthcare delivery in the U.S. will likely continue to be a legal process as much as it is a clinical and political one.

The post What Are the Current ACA Legal Challenges? appeared first on Burroughs Healthcare Consulting.

“Real experimentation with episodic bundles requires a willingness to try mandatory models,” said Azar at the conference. “…these are the most effective way to know whether these bundles can successfully save money and improve quality.” 

The American Society for Radiation Oncology raised concerns about a mandatory payment bundle within hours of Azar’s speech. In a statement the society’s CEO Laura Thevenot said the society looked forward to working with CMS (the Centers for Medicare and Medicaid Services) on a payment model but pointed out that they had been working on a viable payment model with the agency for years ”that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care.” Added Thevenot, “any radiation oncology payment model will represent a significant departure from the status quo…we have concerns about the possibility of launching a model that requires mandatory participation from all radiation oncology practices at the outset.” 

But experts in health care financing think that both voluntary and mandatory models need to be utilized.  Joshua Liao, MD, M.Sc., the associate medical director of Contracting and Value-Based Care at the University of Washington, says there is not yet much data on mandatory programs, though he was a co-author on a journal articlein JAMA Internal Medicine in 2017 on a then voluntary payment model. The study looked at hip and knee joint replacement surgery at one five hospital health system in San Antonio between 2008 and 2015. Over the seven-year period the health system saw savings of about twenty percent on over 3,000 patients by generally using the same implant, and negotiating that cost with vendors, and by sending many patients home to recover, if appropriate, rather than sending them to rehabilitation facilities. Since April 2016, CMS has mandated a bundled payments system for knee and hip replacementsin 800 hospitals across the US. 

“To accelerate the value-based transformation of America’s healthcare system, we must offer a range of new payment models so providers can choose the approach that works best for them,” said CMS Administrator Seema Verma in an agency statement in October. Verma added that CMS looks “forward to launching additional models that will provide an off-ramp to the inefficient fee-for-service system and improve quality and reduce costs for our beneficiaries.”

New voluntary models are underway. CMS reported in October that nearly 1,300 health care providers—including Adventist Health, Dignity Health, Geisinger Health System and Sutter Health—will be participating in a new volunteer payment model, announced by CMS last January. The new model, called the Bundled Payment for Care Improvement (BPCI) Advancedincludes 832 acute care hospitals and 715 group practices across the country. 

The program began on Oct. 1 and runs through Dec. 31, 2023. (The original version of BPCI concluded in September 2018.) BPCI Advanced includes bundled payments for new episodes of care such as outpatient services. CMS plans to release target prices for episodes of care before each year of the program. BPCI Advanced includes a total of 32 episodes of care—3 outpatient and 29 inpatient. 

According to CMS the top three clinical episodes selected by participants are knee replacement, congestive heart failure, and sepsis. 

Health care providers and health systems will get another shot at BPCI Advanced in the spring of 2019 when they can sign up for the Model Year that begins January 1, 2020. 

For more information sign onto the CMS BPCI Advanced Listserv.

The post How to Unpack The New Bundled Payment Models from CMS appeared first on Burroughs Healthcare Consulting.

With the midterms less than two weeks away a new poll published October 18th by the non-partisan Kaiser Family Foundation got a lot of attention. Over seventy percent of voters say health care is a very important issue in deciding who to vote for.

But exactly what happens to key healthcare initiatives, especially the Affordable Care Act including expansion of Medicaid in many states—which tends to be more popular among Democratic lawmakers than Republicans–depends on whether it’s the Democrats or Republicans who get control of the House, says Eric Feigl-Ding, MPH, Ph.D., a health economist and visiting scientist at the Harvard Chan School of Public Health in Cambridge, Mass.

Based on multiple polls, the New York Times reported on October 23 that a likely outcome is that Democrats will gain the majority in the House of Representatives and the Republicans will keep the majority in the Senate. But the Times and many other news outlets continually point out that many factors including the news of each day make it difficult to predict the outcome.

Feigl-Ding says having opposing parties in the House, Senate and White House could make it harder to pass national legislation. Changes can still happen to the ACA, however, because the President can continue to make certain executive level decision such as ending the penalty for not having health insurance which he did last year. That change takes effect in 2019.

In terms of new legislation, Feigl-Ding says a split Congress and White House means that passing legislation will be difficult because what comes from the House side, if most members are Democrats in the next sessions, could be more liberal and the corresponding bills from the Senate, likely to remain Republican, could be more conservative. So, says Feigl-Ding, either a bill won’t pass at all, or there will have to be much more of a compromise. “And assuming they would get to compromise is a big assumption, that then requires the president to agree to sign that legislation,” adds Feigl-Ding.

A report this week by strategy and policy group Manatt Health, based in Washington, DC lists the health care issues the firm thinks will dominate in states and the federal government after the elections:

• The role of Medicaid as either a welfare program or health insurance for low-income Americans: While Democrats generally support continued expansion of Medicaid with no cost or work requirements for low income adults, Republican governors in a number of states—with the approval of the Trump administration– have introduced premiums, work requirements, increased paperwork and penalties for falling off on requirements those that can keep many adults from applying for or remaining on Medicaid.
• Differences in states about expanding and stabilizing the Affordable Care Act (ACA) Marketplace or promoting non-ACA coverage: The ACA allows states to open their own health insurance marketplaces or simply offer access to the federal marketplace. According to 2017 data from the National Academy for State Health Policy, more consumers sign up for health care coverage in states that run their own marketplaces
• Drug prices: According to the Organization for Economic Development, an international forum with 36-member countries, consumers in the U.S. spend just over $1,100 on prescription drugs each year, more than consumers in any other country. President Trump has promised to help lower drug prices and on October 25 he released a plan that would tie some drug prices for patients on Medicare to an index based on international prices. Those prices are often far lower than Americans pay. PhRMA, the largest drug trade association announced its opposition to the plan the same day it was announced.

According to the report what states do will depend on the election outcomes for governors in more than a dozen states and many of those races are as impossible to predict as the Congressional races.

Other important health care issues for 2019-20120 include:

Pre-Existing Conditions

Listening to ads for some Republicans candidates for Congress makes it appears protecting pre-existing conditions will be a top priority for some Republicans, even among some who voted against them previously. But Feigl-Ding says keeping coverage for preexisting conditions in health insurance plans also requires figuring out how to pay for it. Under the original ACA legislation, the hope was that a financial penalty for not having health coverage would keep more healthy people in the plans—along with the prohibition against letting insurers “cherry pick” only healthy consumers. But that penalty is now gone. “Take that away and you probably can’t sustain the preexisting conditions, says Feigl-Ding.

Medicaid Work Requirements and Other Conditions of Eligibility. Legal challenges in several states could impact the implementation of work requirements. Some governors have said they’ll cut the number of state Medicaid beneficiaries to save money if work requirements are overturned.

ACA Repeal. Twenty states are challenging the constitutionality of the ACA in Texas v. U.S., a case that could make it to the Supreme Court.

Association Health Plans and Short-Term Plans. Several Democratic state attorneys general have filed a lawsuit against the administration’s rule promoting association health plans that allow individuals and small businesses to join to purchase health care coverage and short-term plans. The suit argues that the new rules for both avoid protection for people with pre-existing conditions, according to Manatt.

No one has a crystal ball for what will happen, but everyone has hindsight. According to the Manatt report, in 2010 Republicans replaced Democratic governors in eleven states, and all but one of those states ended plans to establish a state-based health insurance marketplace (SBM). In five states where Democrats replaced Republicans, all those states set up those marketplaces.

And whatever the outcome of the 2018 elections, their impact on healthcare may only be short-lived. At a foundation briefing on the midterm elections earlier this week Mollyann Brody, Executive Director, Public Opinion and Survey Research at the Kaiser Family Foundation reminded the crowd that “the day the 2018 elections are over the 2020 campaign starts.”

Still, the end of the week also brought a glimmer of hope. In response to President Trumps remarks on October 25^th about his administration’s plan to test new drug pricing models in Medicare Part B help to lower drug prices Frederick Isasi, executive director of FamiliesUSA, a liberal-leaning health insurance advocacy group, released a statement that said, in part, “I hope this is a serious policy that will be formally proposed and finalized by the Trump administration. If so, it is an important step forward for our nation’s seniors and taxpayers.”

The post How Will the Midterm Elections Impact Healthcare? appeared first on Burroughs Healthcare Consulting.

The question remains: How can that be? And is healthcare really “a right” of all Americans?

Many other countries have successfully adopted single-payer systems, which means that no one is without coverage. Sen. Bernie Sanders (I-VT) is busy answering questions about his Medicare for All (M4A) platform, joined frequently by supporter and fellow democratic socialist and New York Congressional candidate Alexandria Ocasio-Cortez (D-NY).

“Health care must be recognized as a right, not a privilege,” he writes on his platform’s web page. “Every man, woman, and child in our country should be able to access the health care they need regardless of their income. The only long-term solution to America’s health care crisis is a single-payer national health care program.”

Summing it all up that way sounds very appealing, but making such a change would entail a seismic shift.

How Do We Really Feel?

A new Reuters/Ipsos survey shares that most of us, 70 percent, are in favor of the single-payer system: 85 percent of Democrats and 52 percent of Republicans. Perhaps even more surprising is that a mere 20 percent of us actually dislike the concept.

Under this plan, we’d all be lumped into one communal pot, run by the government, and we’d no longer have to fret over those confounding deductibles and premiums. We’d experience improved benefits, he promises, such as dental, vision and hearing. Major tax increases would fund the plan that includes the following:

• A 6.2 percent income-based health care premium paid by employers.
• A 2.2 percent income-based premium paid by households.
• Progressive income tax rates.
• Taxing capital gains and dividends the same as income from work.
• Limiting tax deductions for rich.
• Savings from health tax expenditures

The government’s costs would increase to nearly $33 trillion during its first 10 years (2022 to 2031) says a “working paper” report from Charles Blahous at the Mercatus Center at George Mason University. That number assumes enactment this year.

Emory University health policy professor Kenneth Thorpe, who has also studied M4A, says annual costs to the federal government will average between $2.5 trillion to $3 trillion.

The idea of anything “for all” has enormous appeal, but wait just a minute, says The Atlantic. This whole idea of single-payer, “an indulgent fantasy,” evolved because Republicans sought to kill the Affordable Care Act (ACA), or Obamacare, but the party couldn’t unite around a coherent alternative. What then?

Democrats want to sweep away the complexity of our current health policy status quo, says the author Reihan Salam, who’s not all that optimistic. “All health reformers in America must confront the hospital sector.” The Blahous report says Medicare for All would slice hospital and physician payments by up to 40 percent which would significantly impact physicians and hospitals’ willingness and ability to care for Medicare patients (Medicare currently only covers 92% of costs).

Which ‘M’ Word?

The word “Medicare” may, in fact, be misused when applied to a single-payer program, because, says Politico, Medicare isn’t single payer at all, but a “bewilderingly complex” system, “a massive public-private hybrid coverage scheme, funded mostly by taxes.”

Further, Medicare’s audience is specific: seniors who receive benefits when working-age people’s pay is taxed. We’re talking about greatly expanding the beneficiary pool here: “Paying for everyone’s health care that way would be a radically different proposition, and far more expensive.”

What we’re really talking about is Medicaid for All, suggests the National Review, which reminds us that “the devil really is in the details.” Medicaid is not free and is funded significantly by the Federal Government inversely related to each State’s per capita income and doctors dislike Medicaid with its low reimbursements, and consumers complain about long lines and treatment delays.

Sanders’ plan would say bye-bye to all private health insurance and would mean all abortions are free and that illegal aliens will get free health care courtesy of the taxpayer; things that many Americans will not tolerate.

Comparing Apples to Apples

Looking at the much bigger picture, proponents on the “yea” side of M4A say that its benefits far outweigh the risks. First and foremost, the entire population would have the opportunity to be healthier, since having access to health care improves health.

Currently, under the ACA, employers with 50 or more full-time employees must provide health insurance to all of them. For mega-corporations, that expenditure isn’t a huge ask, but smaller companies may find it a stretch. If the government funds health insurance, that then lightens the load for all companies that may find they can increase employee pay as a result — if they choose to do so, of course.

One point that seems to go “either way”: health care spending per capita. The United States spends nearly twice as much as other wealthy countries, topping out at $10,348 per person, according to 2016 numbers from Peterson-Kaiser. Compare that to the United Kingdom at $4,192 and Japan at $4,519.

Given our expenditures, this is one tough pill to swallow: According to the latest report from The Commonwealth Fund, even though we spend more, “the U.S. population has poorer health than other countries” and is “failing to deliver indicated services reliably to all who could benefit.”

On the “nay” side of things, opponents cite those major tax hikes and longer waiting times to see a doctor, possibly extending into weeks and months. Add to that the elimination of innovations in the private sector that lead to breakthrough discoveries, all as a result of competition being removed from the medical technology playing field. Finally, funding all of this would require “shifting” funds from other priorities already deemed “urgent,” such as the nation’s infrastructure, those crumbling roads, and bridges now made more urgent due to the disastrous effects of climate change.

There’s no indication that this problem will be quickly solved, only that discussions will continue, while any momentum to effect positive change remains questionable. Americans would like to take the healthcare insurance coverage bull by the horns, but unfortunately, understand it’s just not within their power to do so. Until then, it’s a waiting game and maybe for some time.

The post “Medicare for All’ but All for Medicare? appeared first on Burroughs Healthcare Consulting.

The White House Rose Garden was in full bloom when President Trump took the podium to announce that his administration was “launching the most sweeping action in history to lower the price of prescription drugs for the American people.”

He said: “It’s been a complicated process, but not too complicated.”

Thing is, it is pretty complicated and made more so by the admittedly tangled web of lobbyists knocking with dogged determination on lawmakers’ doors in pursuit of one thing: higher drug prices.

Their efforts appear to be working. In 2017, they spent almost $280 million in pursuit of their employers’ objectives. Another estimate puts the cost of drug lobbying at $2.3 billion from 2006 to 2016, and it’s clear that the industry also pays substantially to support candidates for both houses of Congress.

The President talked about his announcement being “the most sweeping action in history to lower the price of prescription drugs.” If you remember the presidential campaign, he promised to utilize Medicare’s gorilla purchasing power to negotiate directly to reduce prices. That all sounded very promising.

What Medicare Can and Can’t-Do

Medicare buys more drugs than anyone else, because it has a base of approximately 60 million people over age 65 or younger with certain disabilities, and is the largest single healthcare payer. However, the law actually prevents Medicare from carrying on direct negotiations with pharmaceutical companies. Specifically, it bars the Secretary of the Department of Health and Human Services (HHS) from managing the negotiations. Right now that’s Alex M. Azar II, a former executive with behemoth pharmaceutical company Lilly USA LLC, of Eli Lilly and Co.

Many were chagrined that the “American Patients First” does not, in fact, have any mandate for Medicare to negotiate directly with drug manufacturers. Some have described the situation in general as a gift, with a big bow around it, to America’s drug companies.

To understand why this happened, it helps to understand some of the history. Hearken to 2006, when Congress was in the throes of arguing the federal law around Medicare’s Part D law, the Medicare Modernization Act that became enforced in 2003. It was the most extensive rejuvenation of the program in 38 years.

Lobbyists persuaded lawmakers that if Medicare gained the ability to negotiate, that it would be akin to price control and an affront to the free market. Insurance companies in charge of subsidizing the new coverage were charged with managing drug costs.

Drugs Do Come Cheaper

In contrast, AARP invites us to consider how the Veterans Health Administration (VHA) deftly negotiates drug prices. The proof is in the pricing, as VHA pays 80 percent less for brand names than Medicare Part D. The VHA’s formulary list, that magic roster of medications it covers is a powerful negotiating tool. The relationship between Medicare and Medicaid that exists within the Food and Drug Administration (FDA) means the former two agencies must cover all FDA-approved drugs. That’s in spite of the fact that less expensive and equally effective medications can be bought on the open market.

Maybe you wonder how your fellow Americans feel about all of this. Big surprise: Democrats, Republicans, and independents are all pretty much on the same page. That’s according to a report from the National Academies of Sciences, Engineering, and Medicine. The analysis states emphatically that “finding a way to make prescription medicines — and healthcare at large — more affordable for everyone has become a socioeconomic imperative.”

According to the Henry J. Kaiser Family Foundation, a majority of Democrats (96 percent), Republicans (92 percent), and Independents (92 percent) think that yes, our government should have to negotiate power here.

Maybe Yes, Maybe No

Kaiser’s analysis of this conundrum over the “noninterference clause” is this. Those in favor of having Azar negotiate think this would result in leverage to reduce drug costs, especially around medications with sky-high prices but with no competition. They say private plans just don’t pack enough punch that way.

As expected, those who proclaim “no” shrug and opine that the Secretary simply couldn’t get better deals done. Then there’s the argument that haggling over price would inhibit pharma’s research and development, limiting the opportunities for more and better medications to improve quality of life and save lives.

As Kaiser notes, in addition to allowing the HHS Secretary to make better deals on drugs, another option would be to establish a public Part D plan that works in partnership with private Part D. “The Secretary would establish a formulary for the public Part D plan and negotiate prices for drugs on that formulary.”

There’s also a compromise approach of sorts in the mix that would address those expensive drugs and those that don’t have therapeutic alternatives: The Secretary could negotiate those.

At the end of the day, before Medicare can become the drug price negotiator extraordinaire, the law must be changed, and that’s a big lift. Based upon history, even Republicans are not expected to want to do this, and for sure pharma will recoil. That leaves consumers using Part D watching and waiting for change.

Drug Negotiation Side Effects

Increasing negotiating around Medicare could have ramifications if the President transfers expensive medications from Part B — the first Medicare legislation in 1965 —
to Part D, says The New York Times.

AARP says it’s worried about increasing out-of-pocket charges if this happens. Also, 9 million Medicare members in Part B don’t have Part D, leaving a void as to who will pay medication costs.

The publication asked doctors for their opinions and one responded that one misstep could be “a disaster.” Another worried about Part D drugs’ prices increasing more than Part B’s. Still, another notes protected classes of Part D drugs that must be covered by insurance plans, but in this instance may hamper Part D negotiations.

The public is invited to review lengthy details about the President’s plan and to comment here by July 16.

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