Hospitals had asked the court that vacated the 2019 rule to enforce its decision against the 2020 rule as well. The judge declined. But she also faulted CMS for a course of action that 'calls its argument into serious question and appears to set the agency above the law.'
The federal judge who vacated site-neutral provisions of the Outpatient Prospective Payment System (OPPS) final rule for 2019 criticized the Trump administration for including comparable provisions in the OPPS final rule for 2020. But she stopped short of blocking the policy from taking effect next month.
The hospital plaintiffs had asked U.S. District Judge Rosemary M. Collyer to enforce her order regarding the 2019 policy against the 2020 policy as well, but Collyer ruled Monday that she lacked the jurisdiction necessary to do so.
Although the Centers for Medicare & Medicaid Services relied on the same flawed reasoning to support its 2020 rule as it did with the 2019 rule, the new policy isn't "precisely the same rule" as the old one; therefore, it falls outside the scope of her earlier decision, Collyer wrote.
That didn't stop her, however, from criticising CMS and strongly suggesting that the 2020 policy should eventually be vacated as well.
"To be clear, CMS clearly disregarded the substance of the Court's decision ... when it relied on the same ultra vires reasoning to justify its 2020 reimbursement rates," Collyer wrote. "The government has appeal rights but the Court refused to modify or stay its Order pending appeal, and the government exhibited little urgency in filing its appeal, much less in moving for a stay from the D.C. Circuit."
"Additionally, the government previously argued for a modification or stay so that it would have the opportunity to craft a prospective remedy in the first instance due to the administrative costs associated with a retroactive remedy," she continued. "CMS has now intentionally placed itself in a position to suffer those same alleged harms, which calls its argument into serious question and appears to set the agency above the law."
The government said last week both that it will appeal Collyer's decision regarding the 2019 policy and that it will automatically reprocess 2019 payments to comply with the decision, resulting in back pay for hospitals that had their payments reduced. The controversial policy, which reduces reimbursement rates for clinic visits at hospital-owned outpatient provider departments to match the rates paid for clinic visits in physician offices, is slated to take effect next month for the 2020 calendar year.
Hospitals 'Remain Confident'
The American Hospital Association, which is lead plaintiff in the case, said it expects hospitals ultimately to prevail.
"As the judge stated, CMS has placed itself in a position where it appears to be 'above the law' by instituting the 2020 cuts," AHA General Counsel Melinda Hatton said in a statement released to HealthLeaders. "Nevertheless, the court is requiring hospitals to file claims in 2020 to meet Medicare procedural requirements."
"The AHA and other plaintiffs remain confident that the courts will find the 2020 cuts to be illegal, just as they found the 2019 cuts," Hatton added.
A spokesperson for CMS said the agency is pleased with Collyer's ruling regarding the 2020 rule, noting that the dispute over the 2019 rule remains active on appeal.
"CMS will continue to work to ensure that Medicare has more choices that would lower out-of-pocket costs," the spokesperson said. "There is significant payment disparity between Medicare payments for clinic visits in certain off-campus hospital outpatient departments versus the physician office setting. CMS looks forward to implementing policies that will result in lower copayments for Medicare beneficiaries."
Healthcare consultant Rita Numerof, PhD, said the site-neutral payment policy is "essential," and she described Collyer's ruling Monday as "a win for patients."
"It brings them closer to the healthcare industry they need, an industry in which the quality of care they receive takes precedence over the building in which it's delivered," Numerof said. "Better yet, this decision indicates that we are incredibly close to a day where lawsuits stemming from deep-seated resistance to value will ultimately prove ineffective."
Anthony Tedeschi, MD, will retire at the end of the year, then Audrey Gregory, PhD, RN, will succeed him.
Audrey Gregory, PhD, RN, will take over on New Year's Day as CEO of Tenet Healthcare's Detroit Medical Center, following the retirement of current CEO Anthony Tedeschi, MD, the organization announced Thursday.
Gregory, who has worked 15 years for Tenet in a variety of leadership roles, joined the DMC team just two months ago, in October, when she was named president of DMC and CEO of its adult central campus.
Before moving to Detroit, Gregory had worked for Tenet in Memphis as a market CEO and hospital CEO in the Saint Francis Healthcare System. (In a separate announcement, Tenet said Friday that it plans to divest its Memphis operations, including two hospitals, the physician practices associated with them, and six MedPost urgent care centers, to Memphis-based nonprofit Methodist Le Bonheur Healthcare.)
Tenet President and Chief Operating Officer Saum Sutaria, MD, said the Detroit community will benefit from Gregory's experience in clinical leadership, nursing, and hospital administration.
"Her knowledge makes her the perfect choice to lead the DMC and build upon the legacy created by Dr. Tedeschi and the DMC leadership team," Sutaria said in a statement.
Sutaria also praised Tedeschi as a "thoughtful leader" with a passion for the Detroit community.
"He has demonstrated an unwavering commitment to our patients and their families and has been instrumental in creating a culture of compassion, safety and quality that our staff and patients expect and deserve," Sutaria said. "He will be missed, and we wish him all the best in his retirement."
Tedeschi's retirement comes two years after his rise to DMC's top executive post. He had served previously in Tenet's former Chicago market. Tedeschi said working in Detroit has been a pleasure.
"At the heart of the DMC are the staff and physicians who work hard every day to make a difference in the lives of the patients we have the privilege to serve," he said. "I have enjoyed making Detroit my home and working with our staff physicians and community members over the last several years. I am excited for DMC's future under Audrey's leadership."
The law 'does not prohibit employees from discussing their support for or opposition to policy proposals or issues, even if those issues are politically charged or associated with a particular political party,' the OSC determined.
The U.S. Office of Special Counsel (OSC) determined that Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma didn't violate the Hatch Act when she spoke out against so-called "Medicare-for-All" proposals ahead of the 2018 election.
In a complaint filed last year, Citizens for Responsibility and Ethics in Washington (CREW) alleged that Verma's messages within a week of the mid-term elections adopted a key Republican talking point and "were designed to influence the outcome of those elections with respect to competing political parties."
One tweet cited in CREW's complaint, posted on Halloween, referred to "Medicare-for-All" as the "scariest Halloween costume" of 2018.
The complaint also took issue with Verma's participation in and promotion of an interview with Sinclair Broadcast Group Chief Political Analyst Boris Epshteyn, who had served as an advisor to the Trump campaign. From her official government account, Verma retweeted a message from Epshteyn that said Verma "believes that the Democrat-backed 'Medicare For All' is simply a bad idea."
.@SeemaCMS believes that the Democrat-backed ‘Medicare For All’ is simply a bad idea. The focus of the agency? Strengthening the Medicare program itself. Watch our interview here: https://t.co/zKg8VAwwLQ
Sinclair requires its stations across the country to run the segments from Epshteyn, who "reliably parrots the White House's point of view on most issues," as Hadas Gold reported for Politico in 2017.
Verma also bashed Medicare-for-All in an official CMS blog post on November 2, 2018, four days before the election.
The OSC investigated the complaint and determined that Verma's actions didn't violate the law, according to a letter dated October 29, 2019, signed by Ana Galindo-Marrone, who has been chief of the OSC Hatch Act Unit since 2000.
The law "does not prohibit employees from discussing their support for or opposition to policy proposals or issues, even if those issues are politically charged or associated with a particular political party," the letter states.
The OSC also investigated a claim that Verma's messaging "stemmed from a White House-coordinated effort to defeat Democratic candidates in the 2018 midterm elections."
"After completing our investigation, OSC has insufficient evidence to conclude that you violated the law by working with the White House to influence the 2018 midterm elections, and we are closing our file without further action," the letter states.
A spokesperson for OSC declined to release a copy of the letter but confirmed the authenticity of the letter, which a CMS spokesperson released to HealthLeaders as requested.
The CMS spokesperson said the OSC's decision is unsurprising. "All events and op-eds related to Medicare for All and the public option proposals have gone through the appropriate legal and ethics review," the spokesperson said.
The administration agreed to comply with a federal judge's order that vacated site-neutral payment provisions of OPPS 2019, but it appealed her decision and will keep pushing for related provisions in OPPS 2020.
Hospitals are celebrating a financial win after the Trump administration agreed to release more funds to hospital-owned outpatient provider departments in accordance with a federal court ruling. But the fight isn't over.
U.S. District Judge Rosemary M. Collyer ruled in September that the Centers for Medicare & Medicaid Services acted in a manner "manifestly inconsistent with the statutory scheme" when it included site-neutral payment provisions in the Outpatient Prospective Payment System final rule for 2019. The provisions reduced reimbursement rates for clinic visits at hospital-owned departments to bring them down to the rates paid for clinic visits in physician offices. Collyer declined in October the government's request to put her ruling on hold.
Despite the decision vacating its 2019 rule, CMS moved forward in November with its plan to include site-neutral payment provisions in the OPPS rule for 2020, calling it "the second year of the two-year phase-in of the clinic visit policy." The hospital plaintiffs that successfully challenged the 2019 rule asked Collyer to enforce her order against the 2020 rule as well, arguing that CMS had simply reinstated the same two-year policy that had been vacated. (The government contended, however, that it would be appropriate to move forward with the 2020 policy while officials considered whether to file an appeal.)
Officials have decided to do three things: (1) issue back payments to hospitals that endured rate reductions in 2019 due to the site-neutral payment policy, (2) appeal Collyer's decision with regard to the 2019 rule, and (3) maintain course with site-neutral payment policy in the 2020 rule. (The government filed a notice of appeal Thursday.)
Only the first of those three items drew an expression of approval from American Hospital Association General Counsel Melinda Hatton.
"The AHA is pleased that at our urging, CMS will be repaying affected hospitals the full OPPS rate for 2019 to support the critical work they do for the patients and communities they serve," Hatton said in a statement. "Now that a federal court has sided with the AHA and found these outpatient clinic visit cuts exceed the Administration's authority, we continue to call on CMS to abandon further illegal cuts for 2020 and to pay the full OPPS rate going forward."
In a follow-up statement, Hatton said the AHA is confident the appellate court will affirm Collyer's decision.
The hospital plaintiffs told the court in a filing earlier this month that some hospitals had in recent weeks begun receiving payments for their claims processed without the site-neutral payment calculation for relevant services.
A spokesperson for CMS tells HealthLeaders that the agency began November 4 processing payments in accordance with Collyer's order for claims dated January 1, 2019, and thereafter. Beginning on January 1, 2020, and for the next few months, the 2019 claims that were paid at the reduced rate will be reprocessed automatically, with no need for providers to take any additional action, the spokesperson said.
This story was updated Friday afternoon with additional information from a CMS spokesperson and a follow-up comment from the AHA general counsel.
Physician and employee engagement faltered. Then came a public crisis and leadership change. Here's how the Ohio health system got itself back on track.
Engagement levels among physicians and staff at Summa Health, a four-hospital system based in Akron, Ohio, were above average a decade ago. That's not the case anymore.
The health system endured a very public crisis of confidence and a top-level leadership change. But, after an intentional effort to reengage its stakeholders, the organization has demonstrated a cultural turnaround is well underway.
Physician engagement scores fell from the 75th percentile in 2010, to the 61st percentile in 2013, then they plummeted to the 2nd percentile in 2015, according to Press Ganey data the health system released to HealthLeaders. Employee engagement scores, meanwhile, fell from the 73rd percentile, to the 70th percentile, then to the 6th percentile.
Summa Health President and CEO Cliff Deveny, MD, who was named to his current position in 2017, said senior leaders at the time were aware of slumping engagement but focused on other priorities.
"As you can imagine, there were lots of meetings and rationalizations of why this was happening," Deveny said during a recent HealthLeadersCEO Exchange gathering. "It was explained away, and nobody was really looking at the data."
"The operational performance continued to improve in the organization, but engagement scores kept dropping," Deveny said. "The board was focused on operational performance. The senior management was getting rewarded for that, and nobody was holding anybody accountable for engagement."
Crisis of Confidence
The conflict at Summa Health came to a public head when then–President and CEO Thomas Malone, MD, MBA, terminated a contract with the system's emergency physician group, effective New Year's Day 2017, amid a labor dispute. The end of the 40-year relationship, which resulted in the replacement of about 60 physicians, prompted outrage and a vote of "no confidence" from the medical staff, who called for Malone to be replaced, as Brie Zeltner reported at the time for The Plain Dealer.
The end of that contract also left 30 residents in Summa's emergency medicine program without faculty members, leading the Accreditation Council for Graduate Medical Education (ACGME) to place the program on institutional probation. (The program secured ACGME's approval to relaunch this year, as Ginger Christ reported for The Plain Dealer.)
The situation strained Summa Health's relationships both internally and externally, with the broader community, Deveny said.
"This became the focus of all the media in the community," he said.
Malone resigned in late January 2017 after about two years on the job, saying his continued presence could distract from Summa Health's goals. Malone declined to comment for this story.
Deveny was hired in March 2017 on an interim basis. He had previously served Summa Health about 14 years in a variety of roles before he took a job in 2011 with Catholic Health Initiatives. When he returned to Akron in 2017, he knew rebooting the organizational culture would be an indispensable component of any growth strategy.
"When people have a knot in their stomach and they can't breathe and they have anxiety [about the health system], they can't think strategically, they can't think about how they're going to do the turnaround," he said. "You kind of have to fix the individuals before you can actually do the work, so we spent a lot of time on that."
Summa Health's physician engagement scores rose from the 2nd percentile in 2015 to the 14th percentile in 2017, then the 47th percentile in 2019, as the organization executed a three-part cultural turnaround strategy. The health system's physician alignment indicator, meanwhile, rose from the 1st percentile to the 12th percentile, then to the 47th percentile. (Updated numbers on overall employee engagement were not yet available to release publicly, a spokesperson said.)
Here's how the system reengaged its workforce, in three steps:
Step 1: Figure Out What's Behind the Numbers
To get a better sense for what the sagging engagement scores mean, Summa Health directed physician managers to meet with each and every physician on staff, collecting their perspectives on the state of the organization, Deveny said. Staff managers did the same thing for nonclinical team members.
They found widespread problems of mistrust and conflicting communications.
"There were a lot of mixed messages. What was coming from senior management was different from middle management," Deveny said. "The whole middle management had basically become a negative 'you're gonna get in trouble' culture."
"Everybody was getting disciplined. Everything was on the negative instead of the positive. A lot of the physicians had lost trust, and there was no communication. And you had a lot of toxic leaders," he said.
Employees didn’t feel supported, and they were focused on financial results to the exclusion of other priorities, he said.
"The whole sense of teamwork had been lost," he added.
Step 2: Reengage Staff in Defining What's Important
To bring employees into the conversation about Summa Health's core missional identity and path forward, leaders recruited 25 of the organization's most-trusted "star" personnel from all levels below the senior management team, Deveny said.
The group met for two days to discuss what motivates them to come into work and why they choose to be part of Summa Health, he said. They distilled their discussions into a list of six key commitments: serve with passion, personalize care, value every person, take ownership, work collaboratively, and partner with the community.
Summa Health built a campaign around those central priorities. Then it went to employees with a pointed prompt designed to challenge toxic members of the workforce, Deveny said: "If you are not passionate about the work we do, if you are not feeling good about it when you're driving into work, you should probably leave the organization."
Step 3: Drive Engagement Strategies to Frontline Managers
To ensure that its engagement priorities would flow efficiently, back and forth, between the C-suite and frontline staff, Summa Health retrained 400 managers in two days on how to coach, teach, mentor, and align teams, Deveny said. The managers were also given new metrics to use in their performance appraisals, he said.
"What we really found was that a lot of managers stepped up and got better. A lot of them self-selected that this wasn't for them, that they needed to leave the organization," he said.
Ben Sutton, MBA, senior vice president of strategy and performance management for Summa Health, said the whole undertaking was about establishing an organizational culture in which individual employees and managers see their work as steering the health system toward success.
"I think one of the things that Cliff really brought is he came into Summa with a real drive to push accountability down to all employees in the organization and to our managers," Sutton told HealthLeaders. "The messaging really wasn't 'do it our way or get out.' It was about empowering them to own the outcome, to own what was going to happen in the future at Summa, and [to] set expectations around accountability."
As a result, the organization has seen improvements not only in engagement and alignment but in quality scores, market share, and the broader community's satisfaction and sense of pride, Deveny said. (After losing 3% of its market share within six months in 2017, Summa Health has regained 2%, as of mid-2019, and expects to continue to improve, thanks in part to a new tower it opened in Akron earlier this year, Sutton said.)
"We then used this position of strength to go out to the market and look for a new partner," Deveny said.
Summa Health announced plans earlier this year to become a wholly owned subsidiary of Beaumont Health, based in Southfield, Michigan. The parties are on track, Deveny said, to submit a final agreement to state and federal regulators by December 31.
Correction (12/30/19): An earlier version of this article misstated the date by which Summa Health and Beaumont Health were expected to submit a final agreement to regulators. The correct date is December 31, not December 21.
This solution was discussed among senior healthcare strategy leaders who attended a HealthLeaders CEO Exchange gathering in Park City, Utah. The program brings leading hospital and health system CEOs together annually for a custom dialogue on only the critical issues facing the future of their organizations. For more information, please email exchange@healthleadersmedia.com.
The organization pointed to its decision as evidence of a 'strong internal succession planning process.'
A month after the sudden death of Kaiser Permanente Chairman and CEO Bernard J. Tyson, the organization named a successor Tuesday.
Gregory A. Adams, who stepped into the role on an interim basis last month, was approved by the board to become the nonprofit's permanent leader.
Edward Pei, who chairs two the board's committees, said the decision shows Kaiser Permanente has a "strong internal success planning process" in place.
"For more than a decade, Mr. Adams worked on a wide variety of major initiatives and areas of focus, and has led Kaiser Permanente's work on growing membership, affordability for our members, and transforming and expanding access to care," Pei said in a statement.
Adams, who had been executive vice president and group president, said it's an honor to follow in Tyson's footsteps.
"He was an exceptional leader who was passionate about and dedicated to Kaiser Permanente," Adams said in the statement. "Kaiser Permanente will continue to move forward together to deliver on our mission: providing high-quality, affordable health care services, improving the health of our members and the communities we serve, and transforming American health and health care."
Republicans and Democrats in Congress say they have reached an agreement on legislation that has been stalled for months, amid intense industry pushback.
A bipartisan group of lawmakers in both the House and Senate announced Sunday that they have reached a deal to ban surprise medical bills, perhaps signaling an end to a months-long legislative standstill.
Committees in both chambers had advanced bills on the topic last summer, but their efforts stalled as groups backed by the healthcare industry launched a public relations campaign against the initiative, arguing it would constitute an unfair form of rate-setting.
Sunday's announcement—from House Energy & Commerce Committee Chairman Frank Pallone Jr., D–New Jersey; ranking member Greg Walden, R–Oregon; and Senate Health Committee Chairman Lamar Alexander, R–Tennessee—says the legislation will reduce out-of-pocket costs for American patients, put an end to surprise billing, and include a mechanism for arbitration.
"Americans who follow the rules and pay their premiums shouldn't get stuck with a $50,000 bill because a hospital contracted a NICU to an out-of-network provider, or a $109,000 bill after being rushed to a nearby hospital for a heart attack," Walden said in a statement. "To put it plainly: Americans are sick and tired of being ripped off by surprise medical bills, and they want Congress to act."
In addition to addressing surprise medical bills, the legislation would provide $20 billion for five years of funding for Community Health Centers, require more transparency and competition for prescription drugs, and raise the minimum age for tobacco purchases to 21, according to the announcement.
Raising the legal age to purchase tobacco has been a priority for Senate Majority Leader Mitch McConnel, R–Kentucky, as Mary Ellen McIntire reported for Roll Call.
Pallone said he aims to have the measure signed by President Donald Trump by the end of the year. Trump has urged Congress to take action on this issue.
"Congress should pass the bill promptly and give the American people a very good Christmas present," Alexander said.
The deal's boosters aim to include the measure in a government funding deal with a December 20 deadline, as Peter Sullivan reported for The Hill.
The text of the bill hasn't been released publicly.
American Hospital Association President and CEO Rick Pollack made perfectly clear, however, that AHA member institutions didn't put this policy on their wish lists this year.
"Unfortunately, unless this proposal is much improved over previous bills that rely on a benchmark rate, it remains highly problematic and would jeopardize patient access to hospital care, particularly in rural communities," Pollack said in a statement.
"An arbitrary rate gives insurers an incentive to remove hospitals from their networks and force artificially low reimbursement rates, which limits access," he added. "Moreover, such proposals would provide a huge windfall to commercial insurance companies at the expense of the nation’s community hospitals."
Pollack encouraged lawmakers to take their time.
Other Lawmakers' Voices
A key Democrat's name wasn't on the announcement. Sen. Patty Murray, ranking member of the Senate Health Committee, didn't sign onto the announcement. An aide told Politico's Rachel Roubein and Susannah Luthi that Murray believes the agreement is productive and "is working with some members of her caucus on concerns they still have."
A separate joint statement from Sen. Bill Cassidy, MD, R-Louisiana; Sen. Maggie Hassan, D-New Hampshire; and Sen. Michael Bennet, D-Colorado—who had authored one of the earlier bill—praised the new agreement.
"We appreciate committee leadership for their work to progress efforts to end the practice of surprise medical billing, including by adding a simple arbitration safety valve to help providers and plans resolve these billing disputes," Cassidy, Hassan, and Bennet said. "As our discussions continue around the final details, we are encouraged that we’re one step closer to giving patients these vital protections. Patients have waited long enough, and we remain hopeful that we can get this done by the end of the year."
The health system's senior vice president of national labor relations said the conflict is resolvable, 'and there is no reason to strike.'
A five-day strike that was postponed last month after the sudden death of Kaiser Permanente Chairman and CEO Bernard J. Tyson is back on the calendar.
Thousands of psychologists, therapists, psychiatric nurses, and other healthcare professionals plan to strike December 16–20 at more than 100 Kaiser Permanente facilities across California, the National Union of Healthcare Workers (NUHW) said Wednesday.
"Mental health has been underserved and overlooked by the Kaiser system for too long," said Ken Rogers, PsyD, MEd, a Kaiser Permanente clinical psychologist who serves as a vice president on the NUHW executive board, in a statement released by the union.
"We're ready to work with Kaiser to create a new model for mental health care that doesn't force patients to wait two months for appointments and leave clinicians with unsustainable caseloads," Rogers said. "But Kaiser needs to show that it's committed to fixing its system and treating patients and caregivers fairly."
The union accuses Kaiser Permanente of refusing to negotiate unless mental health clinicians agree to "significantly poorer retirement and health benefits" than those received by its more than 120,000 other California employees.
Dennis Dabney, senior vice president of national labor relations and the Office of Labor Management Partnership at the Kaiser Foundation Health Plan and Hospitals, said the parties have been working together with an external mediator in pursuit of a collective bargaining agreement. The union rejected a compromise solution proposed last week by the mediator, Dabney said.
"The only issues actively in negotiation in Northern California are related to wage increases and the amount of administrative time that therapists have beyond patient time," Dabney said. "We believe these issues are resolvable and there is no reason to strike."
The mediator's recommendation includes about 3% in annual wage increases for therapists in Northern California for four years, plus a $2,600 retroactive bonus, Dabney said
"In Southern California, the primary contract concern relates to wage increases and retirement benefits," Dabney said.
The mediator's recommendation includes about 3% in annual wage increases for therapists in Southern California for four years, plus a $2,600 retroactive bonus, even though the organization's therapists in Southern California "are paid nearly 35% above market," Dabney said.
"Rather than calling for a strike, NUHW's leadership should continue to engage with the mediator and Kaiser Permanente to resolve these issues," Dabney said.
New Ulm Medical Center struck a deal with a local payer willing to share the cost of a simple intervention. The arrangement has been paying dividends for seven years.
Patients who use the emergency department at least three times within four months at Allina Health's New Ulm Medical Center in New Ulm, Minnesota, have their names added to a high-utilization list.
The keeper of that list is Jennifer Eckstein, a licensed social worker who follows up with each patient directly, looking to solve underlying problems that may be driving their frequent ED use. Whether the patients need a primary care physician, a mental healthcare provider, supportive housing, or another solution, Eckstein does her best to address their social determinants of health and steer them away from the ED for non-emergent care.
The intervention is a straightforward concept. Many other hospitals have similarly hired social workers to help meet the needs of these ED frequent flyers. The program at New Ulm Medical Center, in fact, was inspired in part by an earlier and narrower intervention that focused exclusively on mental health needs of ED patients at Allina's Owatonna Hospital in Owatonna, Minnesota.
But what makes this program a bit different from others is the way New Ulm Medical Center took a broad problem-solving approach while minimizing its expenses. Rather than shouldering the full cost of employing a full-time ED social worker, the hospital partnered with local insurer South Country Health Alliance. They struck a deal and signed a contract agreeing to split the personnel expense 50/50, beginning in 2012.
Allina's four hospitals in the Twin Cities metro area have regularly staffed social workers in their EDs, too, but none of them fund those positions through cost-sharing arrangements with health plans, according to a spokesperson for the nonprofit health system.
South Country Health Alliance CEO Leota Lind, who has been with the organization since its founding in 2000, says her organization didn't need much convincing to sign the contract with New Ulm Medical Center. While unmet mental health needs are often a major factor contributing to ED overuse, they are far from the only factor, so the broader approach taken at New Ulm offered a chance to solve a wider range of the challenges that were leading plan members to an ED when they should be seeing a more cost-effective primary care physician instead, Lind says.
"We really just were looking at ways to influence and reduce emergency department visits," Lind tells HealthLeaders. "By taking that broader scope, it gave us the opportunity to identify what other issues were contributing to that high utilization of the emergency department."
Fewer Dollars, More Sense
South Country Health Alliance and New Ulm Medical Center each contribute about $40,000 per year to cover Eckstein's salary and benefits—which, at about $80,000 per year, are in line with what other hospital social workers earn in total compensation in the Midwest, says Carisa Buegler, MHA, director of operations for the hospital.
Both the hospital and payer say their shared investment has been paying off.
Before the social worker was introduced, a small cohort of 28 South Country Health Alliance plan members who received care in New Ulm Medical Center's ED generated $731 per member per month (PMPM) in hospital bills, according to Buegler. A year after Eckstein began her work, in 2012, those bills fell to $416 PMPM, then they kept falling. By the end of the third year, in 2014, the 28-patient cohort generated $286 PMPM in bills, Buegler says.
That 61% reduction means the hospital billed the payer nearly $150,000 less in 2014—just for those 28 patients—than it had before the social worker was introduced. By the end of the third year, the cohort's overall ED utilization was cut in half, and its inpatient admissions fell 89%, Buegler says.
That's only part of the impact Eckstein's labor has produced, since she doesn't work exclusively with South Country plan members. Eckstein, who was hired into the position when it was created, says she helps roughly 150–200 patients per year, regardless of who's paying for their care. Some needs are easier to meet than others, so she's built a sense of rapport with some returning patients over the years.
"The good thing is they utilize me now instead of the ER, so when they get into a pickle or if they're having trouble with something, they call me," she says.
Across all payers, the intervention has likely been saving $500,000 or more, Buegler says.
The intervention is about more than just money, of course. It aims also to improve clinical care and patients' quality of life.
"I don't think the driver was necessarily just cost but appropriate care at the right place, at the right time, with the right kind of provider," says South Country Health Alliance Chief Medical Officer Brad Johnson, MD.
But the financial implications of this intervention are especially interesting considering the fact that New Ulm Medical Center is spending $40,000 per year on a program that delivers cost-savings to payers while reducing the hospital's revenue. The immediate financial benefit goes to the payer, not the provider.
The hospital has seen a 20% reduction in its overall ED volumes in the past five years, and that's likely the direction in which most hospitals' EDs are headed, which is generally good news, Buegler says. The situation presents a challenge, though, since value-based payment arrangements haven't matured and proliferated to a point where they can compensate adequately for the trend, she says.
Why, then, would the hospital keep investing in this intervention?
"It's the right thing to do," Buegler says. "It's providing the best level of care to our patients who are coming in the emergency department seeking help and then providing another level of service to those individuals to help them improve their social conditions, that will then help them to improve their health. … It's really looking at the patient as a whole person."
There's also a longer-term business case to be made for the hospital's continued investment, Buegler says.
"From a financial perspective, we're preparing for more value-based payment contracts," she says.
Although risk-based contracts have been arriving more slowly than many industry stakeholders had expected, leaders remain confident that more value-based models are on the way, so it makes sense for hospitals like New Ulm Medical Center to invest in the future it anticipates, Buegler says.
Plugged Into Support Network
Eckstein is the sole social worker stationed in the ED, but she's not running a one-woman show.
New Ulm Medical Center has a social worker assigned to its clinic, too, and South Country Health Alliance employs a physician as a community care connector in each of the 11 counties it serves—so Eckstein has multiple partners just outside the ED's walls.
"By having that hospital social worker work in partnership with the community care connector at the county, they're able to effectively make referrals and access some of those other types of community supports that have also helped address the issues that individuals may be experiencing as barriers to managing their healthcare," Lind says.
This idea of bridging the gap between traditional medical care and broader social services has been central to South Country Health Alliance's mission since it was founded, Lind says.
"We recognized way back then that those other aspects, those other social, environmental aspects of an individual's life, impact their ability to manage and maintain their healthcare," she adds. "That's been a part of our program since the beginning."
Johnson says this care coordination is a vital component of the local safety net.
"In rural Minnesota," he says, "there's lots of opportunities for people that are not savvy users of the healthcare system to fall through the cracks."
This solution was discussed among senior healthcare strategy leaders who attended the HealthLeaders CEO Exchange gathering in Park City, Utah, earlier this year. The program, in which Carisa Buegler has participated, brings leading hospital and health system CEOs together annually for a custom dialogue on only the critical issues facing the future of their organizations. For more information, please email exchange@healthleadersmedia.com.
Without a prompt ruling, hospitals will have to divert significant resources from 'other pressing health care needs' to comply with the final rule.
Four hospital groups filed a lawsuit Wednesday to challenge the Trump administration's final rule on hospital price transparency.
The requirement that hospitals publish the rates they negotiate with insurers violates the First Amendment and oversteps the government's legal authority, the lawsuit claims.
The plaintiffs—the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), the Children's Hospital Association (CHA), and the Federation of American Hospitals (FAH), along with three individual hospitals—have asked that a federal judge impose preliminary and permanent injunctions to prevent the government from enforcing the rule, which is set to take effect January 1, 2021.
Since hospitals will need to start planning now to bring themselves into compliance by the effective date, the plaintiffs plan to file an early motion for summary judgment to sort out their claims as soon as practical, according to the complaint.
"Absent a prompt ruling, the hospital and health system field will need to immediately begin to expend substantial resources to prepare to come into compliance with the Final Rule, which will mean diverting significant personnel and financial resources from other pressing health care needs," the complaint states.
Health and Human Services spokesperson Caitlin Oakley released a statement Wednesday criticizing the pushback.
"Hospitals should be ashamed that they aren't willing to provide American patients the cost of a service before they purchase it," Oakley said. "President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed healthcare decisions and will continue to fight for transparency in America's healthcare system."
Purported Legal Basis
The government claims it already has the statutory authority it needs to impose the new requirements.
The final rule cites three provisions: section 2718(e) of the Public Health Service Act, which pertains to disclosure of "standard hospital charges"; section 2718(b)(3) of the PHS Act, which pertains to enforcement; and section 1102(a) of the Social Security Act, which gives the HHS secretary general authority to establish rules and regulations as necessary.
Both of the PHS Act provisions cited in the rule were amended by the Affordable Care Act, which the Trump administration argues should be invalidated in its entirety.
Matthew Fiedler, PhD, a fellow at the USC-Brookings Schaeffer Initiative for Health Policy, says it's ironic that the administration is citing two ACA provision as authorizing this rule.
"The first ACA provision requires hospitals to publish a list of its 'standard charges,' which the administration is interpreting to encompass the prices hospitals negotiate with insurers," Fiedler tells HealthLeaders. "This provision is the main basis for the rule on hospital prices that the Administration recently finalized."
"The second ACA provision requires insurers to provide [HHS] and the public a range of information about their operations, which the administration is interpreting to include insurers' negotiated prices," Fiedler says.
Thomas P. Miller, JD, a fellow at the American Enterprise Institute, says the final rule incorporates a broad interpretation of the underlying statutory provisions. How the courts read those provisions, either broadly affirming the administration's interpretation or insisting on a more narrow approach, will ultimately determine whether the mandate survives, he says.
Fulfilling Political Promise
Mike Strazzella, head of federal government relations at Buchanan Ingersoll & Rooney in Washington, D.C., says President Donald Trump has campaigned aggressively on healthcare price transparency.
"I think the president has made it very clear that, regardless of the threat of a lawsuit, he's going to move forward with that agenda," Strazzella says.
The administration finalized the rule as Trump prepares to face off with the Democratic presidential nominee in the 2020 election. By pushing the effective date back to 2021—a year later than originally proposed—the administration delayed most of the rule's impact until after voters decide whether to give Trump a second term.
Strazzella, who worked previously for The Hospital & Healthsystem Association of Pennsylvania and whose current clients include hospitals and insurers, says consumers need information about their out-of-pocket costs, not a confusing dump of price data that won't make sense without an intimate understanding of the industry's complicated price negotiations.
"The reality is that it is a convoluted system," he says.
Confusion vs. Empowerment
While the administration says its rule will empower consumers to make cost-informed decisions about their own care, leaders for each of the plaintiff groups released statements highlighting the potential for consumers to be confused by the troves of information hospitals are being told to release.
"America’s hospitals and health systems stand with patients and are dedicated to ensuring they have the information needed to make informed health care decisions, including what their expected out-of-pocket costs will be," said AHA President and CEO Rick Pollack. "Instead of giving patients relevant information about costs, this rule will lead to widespread confusion and even more consolidation in the commercial health insurance industry. We stand ready to work with CMS and other stakeholders to advance real solutions for patients."
AAMC President and CEO David Skorton, MD, said the final rule "will only create confusion for patients."
CHA President and CEO Mark Wietecha said children's hospital patients are often Medicaid beneficiaries, many of whom are dealing with complex conditions.
"We are concerned our patient families may confuse these commercial rate disclosures and not seek essential care for their children," Wietecha said.
FAH President and CEO Chip Kahn said his organization feels "obligated" to challenge the rule because it "fails to offer patients easy-to-understand information regarding their out-of-pocket obligations for care."
CMS Administrator Seema Verma reiterated the rationale behind the rule in an opinion piece published Tuesday by The Chicago Tribune.
"Clearly, without first knowing the price, a patient cannot actively choose more affordable health care and, therefore, cannot put downward pressure on prices," Verma wrote. "It's not surprising then that health care costs continue to outpace inflation and now account for nearly $1 in every $5 in the economy."
The hospitals filed their suit in the U.S. District Court for the District of Columbia.
HealthLeaders news editor John Commins contributed to this report. This story was updated Wednesday afternoon with a statement from an HHS spokesperson and additional information throughout.