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NOTEWORTHY
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Ransomware / Cyber Attacks
Due to recent Ransomware and cyber attacks around the globe, many of which targeted hospitals, and in keeping with policies set forth by HCA's Information Protection & Security, this publication will limit the use of links going forward.
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Cigna is Now Out
A Delaware Judge denied Anthem's request to block Cigna from terminating a proposed $54 billion merger, meaning Cigna could withdraw from the deal. The judge stayed the decision until noon on May 15, to give Anthem time to decide whether it will file an appeal. In a statement issued May 12, Anthem called out Cigna and said it would not pay the $1.85 billion break-up fee it owes. Cigna responded that they not only expect the $1.85 billion fee, but an additional $13 billion in added damages caused by Anthem to Cigna and its shareholders.
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Aetna Leaves the Exchange
Last week, Aetna announced it will not sell coverage in the individual marketplaces in Nebraska or Delaware, marking the company's complete withdrawal from the Affordable Care Act exchanges. Both states will potentially be left with just one remaining insurer in 2018. Further, Nebraska's lone insurer, Medica, has already warned it would leave Iowa after becoming the sole option in that state's marketplace.
Aetna cited losses totaling $700 million in the individual market in the last three years as the reason for its withdrawal. The insurer had 255,000 individual members at the end of March.
Aetna is now the second largest national insurer to completely withdraw from the exchanges. Humana announced its total exit in February. Despite the big losses in the exchange markets, Aetna continues to see revenue growth in other government programs, primarily Medicare and Medicaid. Roughly half of its premium revenues came from government programs last year, up from 38 percent prior to full implementation of the Affordable Care Act.
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Regional M.C. San Jose Welcomes Congresswoman Zoe Lofgren
Regional Medical Center San Jose's executive team was excited to welcome Congresswoman Zoe Lofgren (D-CA) to Regional for a roundtable discussion and hospital tour Wednesday, May 10.
The discussion focused on Regional's key role in providing health care and jobs in the community, protecting coverage for all patients after the repeal of the Affordable Care Act, and current legislative bills to ensure hospitals can continue to provide patients with quality health care.
From Left to right - Jen Sweeney-VP Operations, Fred Ashworth-CFO, Tina Bray, RN-CNO,Mike Johnson-CEO,Congresswoman Zoe Lofgren (D), Debora Karstetter-Chair of Board of Trustees,Dr. Alvin Haynes-CMO and Sandy Yanko-COO
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FEDERAL
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Bill Introduced to Repeal/Expand Self-Referral to Physician Owned Hospitals
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On May 17, Senator James Lankford (R-OK) released the Patient Access to Higher Quality Health Care Act of 2017, which lifts the ban on the creation and expansion of physician-owned hospitals. As expressed repeatedly over the years by the American Hospital Association (AHA) and the Federation of American Hospitals (FAH), loosening the law on physician-owned hospitals would harm patients, community hospitals, and local businesses. The FAH/AHA released a recent analysis from the health care economics consulting firm, Dobson|DaVanvo, that compared the performance of non-physician owned, full-service, community hospitals with physician-owned hospitals identified on the Physician Hospitals of America (PHA) public facing website.
Among the findings, physician-owned hospitals:
- Cherry-pick patients by avoiding Medicaid and uninsured patients;
- Treat fewer medically complex patients;
- Enjoy all-payer margins nearly three times those of non-physician owned hospitals;
- Provide few emergency services - an important community benefit; and
- Are penalized for unnecessary readmissions at 10 times the rate of non-physician owned hospitals.
Earlier in the year, the FAH and the AHA sent this letter expressing concerns with any legislation that would repeal current law. When speaking to your legislators, remember to ask them to oppose Senator Lankford's legislation (S 1133) on physician-owned hospitals.
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Talks on Medicaid Expansion Repeal in Senate
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Two Republican Senators are leading the talks about how to overhaul Medicaid in the chamber's Affordable Care Act (ACA) repeal bill, discussing whether to keep the ACA's expansion longer, but more sharply limit overall program spending.
Senators Rob Portman (R-OH) and Pat Toomey (R-PA) are working to strike a compromise that bridges disagreements between Republican moderates who want to keep Medicaid expansion, and conservatives who want to rapidly eliminate it and rein in spending. The two senators have discussed proposals to significantly alter the Medicaid provisions of the House's Affordable Care Act (ACA) repeal bill, which capped the program's funding and phased out its expansion.
Representative Portman has expressed concerns about eliminating expansion and is insisting on a "soft landing" if the program is wound down. His proposal would allow the ACA's expansion funding to be phased out over five years starting in 2020, a more gradual process than what is in the House bill, according to two GOP aides with knowledge of the talks.
Senator Toomey supports capping federal Medicaid funding through either a block grant or fixed payment per enrollee. The fixed spending caps would be pegged to either rate of inflation, which is Senator Toomey's and other conservatives' choice, or medical inflation. As of April, medical inflation grew roughly 3 percent over the past year, while the Consumer Price Index rose 2.2 percent. Using CPI could put states and health care providers in a much bigger financial squeeze over time.
Both Senators come from states that have expanded Medicaid. Talks are still at a high level and the two camps are far apart from reaching an agreement, GOP aides said. The discussions indicate the difficulty of trying to curtail a program that now insures nearly 1 in 5 Americans.
Under the ACA, the federal government covers no less than 90 percent of the Medicaid expansion population's costs, while states pay the rest. The House's American Health Care Act (AHCA), starting in 2020, would quickly roll back ACA's generous support for the existing expansion population and would halt enhanced federal funds for new enrollees.
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Governors' Call on Congress for CHIP Reauthorization
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On May 11, the National Governor's Association (NGA), in a letter, called on Congress to reauthorize Children's Health Insurance Plan (CHIP) program and extend funding for the program for another five years. Federal funding for the CHIP program is set to expire at the end of the 2017 fiscal year, which is September 30.
Reauthorization efforts could be hindered by lawmakers seeking to attach unrelated legislation to the CHIP funding measure. Bipartisan programs such as CHIP are also prime targets in dealing with controversial issues, like the Affordable Care Act, which could be used as a pawn in negotiations.
In the letter to leaders of the House Energy and Commerce and Senate Finance Committees, NGA members urged lawmakers "to act quickly to provide a five-year extension of funding for [CHIP]" in line with current enhanced federal match rates for the program." The group said that states need to know whether CHIP will be funded so states can appropriately budget for the next fiscal year. If the federal government is not going to fund the program, states will have to notify families, alter provider contracts, and take additional steps to terminate their programs. The NGA reiterated the need to know soon, given the state of uncertainty surrounding health reform at the national level.
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Secretary of the Air Force Confirmed
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On May 15, the Senate confirmed Heather Wilson to be Air Force Secretary, making her the second of President Donald Trump's nominees to be approved for a Pentagon post. The vote was 76-22. Only Democrats opposed Wilson, a former Republican Congresswoman from New Mexico.
Her confirmation was a victory for the Trump administration in its effort to fill senior vacancies at the Pentagon. Dozens of national security positions remain unfilled, with Obama Administration holdovers or civil servants filling many senior jobs on an acting basis.
Wilson served in the House from 1998 to 2009, and was a member of the Armed Services Committee. Since 2013, she has been President of the South Dakota School of Mines and Technology. A retired Air Force Captain who graduated from the Air Force Academy, Secretary Wilson will be the first gradate from the Academy to become Secretary of the Air Force. The Senate Armed Services Committee advanced Wilson's nomination on a 22-5 vote in April. |
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Study Confirms Two Year Wait on Many RAC Medicare Claims Appeal
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Medicare's Recovery Audit Contractor (RAC) program, which identifies situations in which health care providers allegedly inappropriately bill Medicare and recoup overbilled funds, has created a backlog in the appellate process for Health and Human Services (HHS.) In March, HHS said in a progress report that it lacks the money and resources needed to meet the court-ordered deadline to clear the backlog, which has reached more than 700,000 cases.
In a study published last month in the Journal of Hospital Medicine, researchers identified 135 cases that were resolved at the third level of the five level appeals process. According to the study, 71.1 percent of cases closed at the third level were decided in health care providers' favor; however, 1,663.3 days passed between the dates the services were provided and when the case closed. According to the researchers, government contractors were responsible for the majority of the delays (70.7 percent) while providers were responsible for 29.7 percent of the total appeals time.
Recommendations from researchers include, process improvement among lower levels of the appeals processes with an aim toward increasing accountability among the lower levels, and clarifying "criteria used to judge determinations."
Researchers also said that CMS' approach may not be enough, and they recommend that CMS consider "an appeals deadline missed by a government contractor as a decision for the hospital, in the same way a hospital's missed deadline defaults its appeal." They wrote, "Such equity would ensure due process and prevent another appeals backlog."
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Senate Finance Committee to Consider Chronic Care Legislation
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The Senate Finance Committee has announced that it will mark-up the Creating High-Quality Results and Outcome Necessary to Improve Chronic Care Act (CHRONIC Act) on Thursday, May 18. The Committee has been working in a bipartisan fashion since mid-2014 to improve the care for Americans living with and managing chronic conditions. The legislation, among other things, provides for modest advances in the use of telehealth technology. The CHRONIC Act, S 870, passed out of the Senate Finance Committee by a unanimous vote on May 18. It is unclear when the bill will be considered on the Senate floor or how the House will address the matter. |
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STATE
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Alaska
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Governor Calls Legislature into Special Session
Governor Bill Walker has called the Legislature into special session to pass the operating and capital budgets, fix Alaska's fiscal and opioid crises, and create the economic certainty the state needs. The Special Session will begin Thursday, May 18.
Governor Walker's special session call includes the following items:
- HB 159 or SB 79 - Opioids prescription and monitoring
- HB 57 - Operating budget
- HB 59 - Mental health budget
- SB 23 - Capital budget
- HB 111 - Oil and gas tax credit reform
- SB 26 - Permanent Fund Protection Act
- HB 60 or SB 25 - Motor fuel tax
- Broad-based tax
Expert testimony to both houses of the legislature has made clear that any complete plan to solve Alaska's fiscal crisis must close the budget deficit this year, and include a broad-based revenue measure to connect Alaska's economy to the services government provides.
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California
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Governor Released Revised Budget Plan
Governor Jerry Brown released his revisions to the 2017-18 state budget plan he proposed in January. He presented the revised budget, which is very similar to his January budget, with a cautious tone, explaining that California needs to plan for tougher times ahead.
The revised budget makes no changes to the allocation of Proposition 56 funds, the increase in the tobacco tax approved last November. January's budget allocated most of the new revenue from Proposition 56, over $1 billion, to support the growth in Medi-Cal spending. It was thought that these new dollars would be used to increase reimbursement rates for physicians and other providers. Exactly how these new funds are to be allocated will remain a major point of discussion as the budget is finalized between now and June.
The January budget contained cuts totaling $33.3 million for the budget year to Graduate Medical Education (GME) funding within the Song-Brown Program. Last year's budget allocated $100 million to the Song-Brown Program for GME funding, with $33.4 million to be distributed each year for the next three years. The January budget reversed that proposal entirely.
However, in some areas, the plan contains some additional spending. In the January proposed budget, counties faced an increase in annual in-home supportive services costs of about $600 million annually. The revised budget contributes $400 million from the General Fund to mitigate some of those costs, with smaller amounts in future years as realignment revenues grow.
The Legislature must complete its work on the budget by June 15, and the Governor must sign the budget by July 1, the beginning of the 2017-18 fiscal year. |
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Tennessee
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Legislative Update
The first session of the 110th Tennessee General Assembly came to a close on May 10.
Health Services and Development Agency (HSDA) Receives One Year Extension
Just prior to adjournment, the House approved a one-year extension for the Health Services and Development Agency (HSDA), which is the state's Certificate of Need (CON) Board. The Senate agreed to the measure, despite their goal to extend the agency for three years. While the one-year extension goes against a 2016 agreement between hospitals and sponsors of the 2016 CON modernization legislation, the alternative would have begun the sunset of the agency and ultimately end the state's CON program. With passage of the legislation, the HSDA is extended through June 30, 2018, which means sunset legislation for the agency will need to be considered in the 2018 legislative session.
Alternative Agreement Reached for APCD
Despite approval for the All Payer Claims Database (APCD) legislation by a special Study Subcommittee and a budget appropriation for the task force created by the bill, the proposal stalled early this week in the House Finance Subcommittee. A total of 10 proposed task forces and study committees were set for review by the subcommittee, but given limited space and timing for such groups to meet due to the looming relocation of legislative offices and meeting rooms, only three were given approval.
However, given the agreement between hospitals and insurers to work together to identify a path forward for Tennessee's APCD, the House Speaker's office was able to confirm that Tennessee Department of Finance and Administration Commissioner, Larry Martin, is willing to convene a meeting with stakeholders as stipulated in the proposed legislation. A date for the meeting has not yet been set, but this solution provides an opportunity to hopefully preserve the APCD and make necessary changes to ensure the state can maximize benefits of the database going forward. |
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Texas
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Legislative Update
Twelve days remain in the 85th Texas Legislative Session. The next significant deadlines for both chambers are Saturday, May 20 and Tuesday, May 23, which are the last days for House committees to report out Senate bills and the last day for the House to consider Senate bills on second reading, respectively. 140 House and Senate bills have been sent to the Governor to date* and eight have been signed by the Governor.
HHS Inspector General Resigns
Texas Health and Human Services Commission (HHSC) Inspector General, Stuart Bowen, was forced to resign on May 10, after Governor Greg Abbott discovered that Bowen was moonlighting for a private company to provide consulting services to the government of Iraq, state officials said. A spokesperson for the Governor said that Governor Abbott took immediate action the day he was made aware of Mr. Bowen's actions.
Bowen, a lawyer, served as the Special Inspector General for Iraq Reconstruction from October 2004 to October 2013. According to an unsigned contract made available to the press, Bowen was to provide "strategic advice" to Brownstein Hyatt Farber Schreck regarding its work with the government of Iraq. According to the agreement, Bowen was to be paid $300 an hour for his work, and receive a 15 percent "origination fee" on any money received by the company for government of Iraq work. The agreement also states that Bowen will not perform any work that conflicts with the duties of Brownstein or hurt any of its clients.
Bowen entered the Inspector General's position in January 2015, as his predecessor, Doug Wilson, had been forced to resign when the agency became the target of state and federal investigations revolving around a multimillion-dollar, no-bid contract awarded with no oversight. In a statement to the media, Bowen says he transformed the office into "a leading professional oversight agency."
Principal Deputy Inspector General Sylvia Kauffman will take charge of the agency.
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Virginia
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Virginia Receives $9.7 Million Grant to Fight Opioid Crisis
Virginia has received a one-year, $9.76 million grant to help fight the opioid epidemic. The grant comes from the Substance Abuse and Mental Health Services Administration, an agency of the U.S. Department of Health and Human Services and will support prevention, treatment, and recovery efforts in 18 Virginia communities, including increased access to naloxone, a medication that reverses opioid overdose when administered quickly. During the 2017 Session, the General Assembly offset $5 million in ongoing funds for medication assisted treatment and Project REVIVE!, which trains laypeople in the provision of naloxone, in anticipated receipt of this federal grant. Additional funds will need to be allocated by the General Assembly if these efforts are to continue beyond the one year of funding that the federal grant provides. In 2016, Virginia emergency departments reported more than 10,000 visits for opioid and heroin overdose treatment, and EMS workers reported more than 4,000 uses of naloxone. |
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INTERNATIONAL
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HCA - UK
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Election update
The latest poll (ICM) places the Conservatives with 48%, Labour with 28%, Liberal Democrats with 10% and others parties at 14%, predicting a Conservative majority of 158.
Party updates
Conservatives
Secretary of State for Health, Jeremy Hunt, has highlighted that the National Health Service (NHS) needs to learn lessons from this week's cyber-attack, while Amber Rudd, Home Secretary has said the NHS needs to upgrade its systems from ageing IT.
Prime Minister Theresa May will use Brexit to deliver a new deal for workers' rights, including care leave for family members and child bereavement, greater stake for workers in their companies, and increases to the National Living Wage.
Labour
Jeremy Corbyn, Labour Leader, announced the party's manifesto, 'For the many, not the few,' which will deliver Brexit, as well as tax increases for high earners, program of renationalisation, and proposals to cap salaries. Key health policies include delivering an extra £6bn ($7.8 billion) a year for NHS across the next parliament, increasing tax on private medical insurance premiums, repealing 2012 Health and Social Care Act, and 'reversing privatisation,' as well as removing the NHS pay cap.
John Ashworth, Shadow Health Secretary, sharply criticised the Government over the ransomware attack, citing a lack of government preparation for cyber-crimes.
Other parties
Liberal Democrats have launched their manifesto with key pledges including a second EU referendum, legalizing cannabis and raising corporation tax to 20%. Key health policies include a rise of 1p ($.01) in income tax to raise £6bn for the NHS, achieving parity between mental and physical health, integrating health and social care, ending the NHS pay freeze, and reinstating nurse's subsidies.
Meanwhile Scottish First Minister Nicola Sturgeon has pledged that a Scottish National Party (SNP) victory would force the Government to include Scotland at the Brexit negotiating table.
Next Developments
The Conservative manifesto is expected on May 18, and the Scottish National Party later this week. Prime Minister May and Corbyn will take part in a BBC Question Time Special on June 2, though appearing separately. Election Day will take place on June 8, followed by the Queens Speech, and state opening of parliament has been set for June 19. |
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