The updates in CMS' proposed rule would slash Medicare payments to home health agencies by $810 million in 2023.
The American Hospital Association (AHA) and the Partnership for Quality Home Healthcare (PQHH) have expressed concern to CMS regarding the Calendar Year (CY) 2023 Home Health Prospective Payment System Rate Update, arguing the proposed cut is steep and technically flawed.
In their respective written letters to the federal agency, the groups advised reconsideration for the market basket update which would decrease Medicare payments to home health agencies by $810 million in 2023.
Under the proposed Patient-Drive Groupings Model (PDGM) behavioural offset, an offset of 7.69% to the 30-day payment rate for CY 2023 will be applied in addition to the original offset of 4.36% in CY 2020. CMS states that the additional offset ensures PDGM budget neutrality, but AHA argues that it fails to account for the drop in average per-episode therapy services.
"As such, we urge CMS not to finalize any budget neutrality adjustment for CY 2023," AHA writes. "Instead, we ask the agency to reevaluate its PDGM budget neutrality methodology to account for the drop in therapy in CY 2020 and subsequent years. Doing so could substantially reduce or negate the need for any behavioral offset, or actually create the need for a future restoration of funds."
PQHH, meanwhile, decries CMS' implementation of the PDGM, pointing to the negative effects on patients and quality of care.
"The payment reductions proposed in this rule conflict with the law and will be disastrous for patient access and care delivery and will undermine CMS’ broader goals to advance health equity and quality improvement," PQHH writes.
The groups take issue with the market basket increase of 3.3% minus a 0.4% productivity adjustment. The proposed permanent adjustment to the -7.69% results in a decrease in payments of 4.2%, or $810 million lost.
PQHH highlight the many challenges facing home health facilities and how the increase to the proposed payment rates doesn't reflect the increase in costs during the COVID-19 pandemic.
"Currently, well-documented staffing shortages and dramatic increases in the cost of labor, fuel, medical supplies, and other resources necessary to deliver care have created challenges for home health providers," PQHH write. "We are concerned that annual increases to the home health payment rates based on the current market basket have not kept pace with recent cost increases. The significant increase in such costs adds to financial pressure on providers already facing numerous challenges and impacts access to care for patients."
The federal agency's informational bulletin details methods for improving safety and quality of care for nursing facilities.
As part of the Biden administration's efforts to reform nursing homes, CMS is encouraging states to tie Medicaid payments to quality measures to advance health equity and improve patient outcomes.
The federal agency's Centers for Medicaid and CHIP Services issued an informational bulletinfor states outlining actions to drive better health outcomes for nursing home residents while strengthening staff pay, training, and retention efforts.
In February, the Biden administration announced a set of reforms to improve nursing homes by addressing safety and quality of care. The reforms aim to ensure that every nursing home provides adequate staffing, poorly performing nursing homes are held accountable for improper and unsafe care, and that the public has better information about nursing home conditions so they can opt for the best option.
By tying nursing home Medicaid payments to quality measures, CMS is further incentivizing advancing health equity by shifting the focus from volume to quality through value-based payments. The agency also notes that as of 2019, 2 million Medicaid beneficiaries received institutional services.
"Today's action is an important step toward accomplishing the administration's goals of strengthening the quality of care, accountability, and transparency in our country's nursing homes for Medicaid enrollees. States can implement a number of initiatives described in this guidance immediately," CMS administrator Chiquita Brooks-LaSure said in a statement.
"Medicaid enrollees residing in nursing homes will only experience better care through collaboration between states, CMS, providers, and other partners, and we look forward to working closely with them on this important effort."
CMS highlights how states can implement actions using flexibilities provided by the Social Security Act to establish Medicaid base and supplemental payments to provide performance-driven nursing home rates. Through the Medicaid state plan, waiver, or demonstration process, states can immediately implement initiatives to give Medicaid beneficiaries in nursing homes better care.
The agency also encourages states to align with initiatives such as the Nursing Home Five-Star Quality Rating System by improving safety, accountability, quality, and overall resident experience. The System is based on six measures, including weekend staffing rates for nurses and turnover of nurses and administrators over the course of the year.
"We know that low wages for staff can contribute to frequent turnover and dangerous staffing shortages at nursing homes, so we encourage states to work with these facilities to find solutions for training and improving staffing."
The potential impact is considered "relatively modest" as the industry is better positioned than it was during the 2008 recession.
Slowing economic growth and inflation are the most likely hurdles to trip up health insurers going forward, but their impact on the industry shouldn't be severe, according to Moody's Investors Service.
The August economic reportanalyzes the biggest challenges to sectors of healthcare and when it comes to payers, Moody's notes that supply chain issues, higher interest rates, and the labor shortage are secondary concerns.
A slowing economy, however, threatens to curb commercial enrollment if jobs are lost. For example, Moody's cites that in 2020 during the early stages of the COVID-19 pandemic, commercial membership fell by 2.7 million, or 2.4%. An increase of 5 million in Medicaid membership offset the enrollment decline.
Government programs like Medicaid and Medicare Advantage claim a much bigger slice of the pie than they did in 2008, and that, along with more portfolio diversity, should protect payers better in an economic downturn today.
One issue that insurers are still susceptible to is rising costs through increased claims if commercially-insured individuals once again accelerate utilization of care due to the fear of being laid off, as they did in 2008.
Inflation, meanwhile, has the potential to be a problem for payers if it's long term, lasting two year or more. Moody's states that persistent inflation could lead to providers demanding higher commercial reimbursement, which insurers might not be able to recoup through higher premiums for members. If commercial premiums exceed the rate of inflation, small businesses with less than 50 employees could drop coverage as they're not required to provide insurance.
"Therefore, inflation could indirectly put downward pressure on commercial enrollment, a key driver of earnings for the industry. In a scenario that features both higher unemployment and inflation, there could be intensified pressure on commercial enrollment," Moody's concludes.
Payer executives have their own ideas as to what their top challenges are, according to a survey from HealthEdge. More than 300 respondents identified managing costs and operational efficiencies as the biggest priorities for health plans today.
Those obstacles ranked fourth and fifth, respectively, in the previous survey for 2021, with the change in rankings attributed to an increase in claims volume after the pandemic, rising costs due to delays in care, and outdated administrative systems.
While payers are somewhat insulated from economic pressures, at least in comparison to other areas in healthcare, the industry has its own set of challenges to navigate.
J.D. Power gauged overall member satisfaction with Medicare Advantage (MA) plans based on six factors.
Member satisfaction with MA plans is up overall, but two areas where coverage is missing the mark is in mental health and substance abuse disorder services, according to a study by J.D. Power.
The consumer insights, advisory services, and data analytics company collected responses from 3.094 members of MA plans across the nation from May through July to measure satisfaction based on six factors, in order of importance: coverage and benefits, provider choice, cost, customer service, information and communication, and billing and payment.
The study found that overall member satisfaction in 2022 is at 809 points (on a 1,000-point scale), up three points from 2021 and up 15 points during the past five years.
However, just 38% of MA plan members say they have enough coverage for mental health treatment, down from 39% last year, while only 27% of members say they have enough coverage for substance use disorder services. For comparison, 91% of members say they have enough coverage for routine diagnostics and 89% say they have enough coverage for preventative and wellness services.
Though strides in billing and payments, along with cost and provider choice, have raised overall satisfaction with MA plans, the study is another reminder that work is still needed to improve services for beneficiaries.
"Medicare Advantage plans have recognized that the key to improved patient outcomes is building engagement with members, encouraging the use of preventive health services and fostering great relationships with primary care providers who are leading overall care coordination," said Christopher Lis, managing director, global healthcare intelligence at J.D. Power.
"With an estimated 1.7 million Medicare beneficiaries living with a diagnosed substance use disorder and one in four Medicare beneficiaries living with a mental health condition, there is a big opportunity for Medicare Advantage plans to support more patients and families in need."
J.D. Power's overall member satisfaction ranking for MA plans:
Once self-pay balances reach over $7,500, providers are far less likely to collect as more patients have bad debt.
Hospital collections fall off dramatically and result in higher bad debt once out-of-pocket bills reach $7,500, according to a report from Crowe Revenue Cycle Analytics.
The public accounting, consulting, and technology firm examined data of 1,413 hospitals across 47 states through 2021 and found that $7,500 is the "vanishing point" at which hospital collections significantly decline.
That threshold is being hit more and more, the research revealed, as patient statements with balances of more than $7,500 have jumped from 5.2% in 2018 to 17.7% in 2021. Meanwhile, balances greater than $14,000 increased from 4.4% in 2018 to 16.8% in 2021. This has created higher bad debt, write-offs for bills deemed uncollectible after collection efforts have been made.
The report found that for the first time, self-pay-after-insurance accounts were the leading source of bad debt in 2021, responsible for 57.6% of patient bad debt, compared to 11.1% in 2018.
"The complexities of new insurance programs such as HDHPs, health savings accounts, and various Affordable Care Act 'metal' plans – for example, bronze, silver, gold, and platinum – have created confusion for patients and healthcare providers alike, as most of these newest options create greater out-of-pocket medical expenses for the patient. And the patient is paying less of it for a variety of reasons," stated Brian Sanderson, a principal in the healthcare consulting group at Crowe.
Self-pay after insurance collection rates plummeted as well, falling from 76% in 2020 to 55% in 2021, the study noted.
Last year, the self-pay after insurance collection rate for claims between $5,000 and $7,500 was 32%, while the rate for claims between $7,501 and $10,000 was just 17%.
Sanderson points to the labor shortage and rising out-of-pocket costs as putting strain on hospitals.
"Hospitals are left in the lurch with these trends," Sanderson said. "Labor scarcity makes for fewer experienced personnel looking to navigate increasing complexities of insurance coverage, while patient out-of-pocket costs continue to rise dramatically."
The providers that have managed a high collection rate on larger balances have done so through high-performing revenue cycle teams. The report uses the example of some hospitals splitting their self-pay revenue cycle team into three squads, one for low-dollar amounts (less than $1,000), one for medium dollar amounts (typically $1,000 to $5,000), and one for larger-dollar amounts (more than $5,000).
Sanderson concludes that with the way self-pay claims and collections are trending, the healthcare industry will likely veer more into direct patient-to-hospital negotiations for complex care, more consumer financial companies offering payment plans on behalf of patients, and more advanced models for hospitals to align their workforce to patients who are able to pay their out-of-pocket costs.
A survey of over 300 payer executives reveals what is keeping the industry leaders up at night.
The pace of change for payers has picked up significantly in the past year, causing executives in the industry to rethink their top challenges, according to a survey from HealthEdge.
Based on the answers of 312 respondents from a wide range of payer types, managing costs and operational efficiencies are now the priorities for health plans today. Those challenges ranked fourth and fifth, respectively, in the previous annual survey for 2021. The change, the survey states, can be attributed to an increase in claims volume after the COVID-19 pandemic, rising costs due to delays in care, and outdated administrative systems.
Conducted by brand intelligence platform PureSpectrum from April to May, the survey revealed common themes among payers, including "the move to modern systems to support digital transformations, the growing demand for real-time data access, and anticipated benefits of greater interoperability to help overcome the growing complexities and challenges of the health insurance industry."
Among the respondents, 46% cited managing costs as one of their top three challenges, while increasing interoperability (44%) and improving claims accuracy (40%) were the most popular answers for addressing the issue.
With executives relaying that claims are often not paid accurately the first time and that the cost per claim has increased, the survey notes that there is a heightened focus on advancing automation solutions that will cause health plans to revisit their payment integrity strategies.
Meanwhile, 41% of payer executives chose operational efficiencies as one of their top three challenges. The workforce shortage has forced payers to look for new ways to do more with fewer resources, the survey states, and that includes optimizing processes and increasing access to real-time data.
Member satisfaction and alignment of IT and business needs tied for third place for biggest challenges among the respondents, which was consistent with the previous year's survey.
Looking ahead, payer executives said they are aiming to increase quality, improve provider relationships, meet regulatory compliance requirements, and increase member satisfaction.
To tackle those goals, 53% of respondents plan to make significant investments in innovation, 53% plan to align the business and IT organizations towards common goals, 52% plan to improve engagement strategies, and 51% plan to modernize technology.
Though most of the organizational priorities remained similar to last year's survey, aligning the business and IT organizations towards common goals jumped from last to second place this year. The drastic shift is indicative of health plans' growing understanding of just how much technology plays a role in their business goals, the survey concluded.
Nearly 20 months after the mandate went into effect, hospitals continue to be noncompliant with providing clear pricing for patients.
Hospitals have made little progress on complying with the price transparency rule as compliance rates remain low, according to a report by PatientRightsAdvocate.org.
The latest Semi-Annual Hospital Price Transparency Compliance Reportreveals that just 16% of hospitals are adhering to the necessary requirements for providing pricing data for patients, nearly 20 months after the law went into effect on January 1, 2021.
The rule requires hospitals to post pricing information online through a comprehensive machine-readable file with all items and services they provide, as well as through a display of shoppable services in a consumer-friendly format.
Findings in the Compliance Report, which reviewed 2,000 hospitals, show there hasn't been much headway made on getting facilities to follow the mandate. Along with 16% of hospitals being noncompliant, the latest report uncovered that 5.1% did not post any standard charges at all. In the two previous reports released by PatientsRightsAdvocate.org, hospitals complied at a rate of 14.6% one year after the rule in February 2022, and at a rate of 5.6% six months after the rule in July 2021.
"It's alarming to see that progress on compliance with federal law on transparency has ground nearly to a stop," said Cynthia Fisher, founder and chairperson of PatientsRightsAdvocate.org.
The latest report also found that two of the largest health systems in the nation, HCA Healthcare and Ascension Health, are the worst perpetrators of the rule as none of their hospitals are compliant.
Meanwhile, another one of the biggest health systems, CommonSpirit Health, now features a compliance rate of 40.5%, which is up from just one of 88 hospitals being compliant in the February report.
Despite the low compliance rates, only two hospitals have been penalized to date—Northside Hospital Atlanta to the tune of a $883,180 fine, and Northside Hospital Cherokee, which received a $214,320 fine. The report highlights that after the two hospitals were issued the fines on June 7 of this year, they both updated their standard charges files and came into full compliance by July 1.
Fisher believes the quickest way to get hospitals on board with the rule is with stronger enforcement.
"With enforcement, fines, and transparent hospital accountability we will see the power shift to healthcare consumers and employers to lower costs," Fisher said. In this report we have outlined more than 100 hospitals that HHS could fine today based on criteria applied to the two hospitals they've previously fined. That is a great place to start."
Initially introduced as Bind in 2016, Surest eliminates deductibles and coinsurance while offering upfront pricing.
The payer giant revealed the plan will be available nationwide to employers with self-funded plans, as well as to fully insured employers with 51 or more employees in 11 states (Arizona, Florida, Georgia, Michigan, Minnesota, Missouri, Ohio, South Carolina, Tennessee, Utah, and Virginia). UnitedHealthcare stated it also intends to offer the plan in up to five more states by the end of the year.
More than 150 employers are currently using Surest, with more planning to add the program ahead of the 2023 open enrollment period.
"People and employers are looking for a simpler and more sustainable health care plan," said Alison Richards, CEO of Surest. "Our new brand name, Surest, helps convey the idea of clarity, confidence and control our members have with their plan."
The plan's primary benefit is its lack of deductibles or coinsurance, with transparent cost data available through the Surest app. According to UnitedHealthcare, Surest members utilized high-quality providers with the lowest price for procedures more than half the time and had 6% fewer emergency department visits. Virtual visit use, on the other hand, was 10 times higher.
Affordability is another benefit UnitedHealthcare is striving for with Surest. Employers that introduced the plan saw costs up to 15% less per member per month compared to high-deductible plans, while out-of-pocket costs for members were 44% less.
The New York surgeon's bid against the No Surprises Act for being unconstitutional was tossed as the federal law was upheld.
A federal judge denied a New York doctor's lawsuit against the No Surprises Act, dismissing the request for a preliminary injunction and ruling that the law is constitutional.
U.S. District Judge Ann Donnelly rejected surgeon Daniel Haller's injunction to blow the law, which was filed on December 31, 2021, the day before the No Surprises Act took effect.
The surprise billing ban was put in place to protect patients from receiving unforeseen bills for out-of-network and emergency services after receiving treatment.
Haller and his private practice, which performs procedures on patients who are admitted after an emergency department visit, alleged in the complaint that the law is unconstitutional and deprives providers the right to be paid a reasonable payment for their services due to the independent dispute resolution process (IDR). The arbitration is meant to keep patients out of negotiations between providers and insurers as the parties attempt to reach agreement on the payment for services.
Haller claims that 78% of his patients are covered by health plans with which the practice has no contractual relationship, making the majority of his patients out-of-network.
However, Donnelly ruled that Haller and his practice's due process claim was "unripe" and did not carry jurisdiction.
"The plaintiffs do not allege that they have participated in an arbitration, much less that the IDR process resulted in a payment amount below the reasonable value. At the time of oral argument—almost six months after the Act went into effect—the plaintiffs could not say whether they had participated in the IDR process," Donnelly wrote in the ruling. "They do not allege that the IDR process has caused any concrete harm, so their claims of constitutional injury are speculative."
HHS released a report showing 5.2 million people have gained health insurance since 2020 as a result of the Biden administration's efforts to expand coverage.
The national uninsured rate reached a record-low of 8% in the first quarter of the year, according to a report by HHS.
The report examines data from the National Health Interview Survey and the American Community Survey to analyze changes in health insurance coverage from January to March.
Besting the previous low of 9% in 2016, the new all-time mark comes after 5.2 million people gained insurance coverage since 2020, HHS announced. The progress aligns with the Biden administration's efforts to expand coverage and lower costs through the American Rescue Plan, along with the continuous enrolment provision and state expansions with Medicaid.
"As we move forward, the Department of Health and Human Services will continue to do everything we can to protect, expand, and strengthen the programs that provide the quality, affordable health care Americans rely on and deserve," HHS secretary Xavier Becerra said in a statement.
"And I'm hopeful that with Congressional action we can continue the work to lower costs for more Americans by both extending the enhanced Affordable Care Act tax credits that have helped drive the uninsured rate to an all-time low and increasing the affordability of prescription drugs for Medicare beneficiaries -- reducing their cost sharing and allowing Medicare to negotiate a better deal on prescription drug prices."
Other findings in the report include that the uninsured rate for adults aged 18-64 declined from 14.5% in late 2020 to 11.8% in the first quarter of 2022. For children aged 0-17, the uninsured rate dropped from 6.4% in 2020 to 3.7% this year after previously increasing during 2019 and 2020.
Meanwhile, changes in uninsured rates from 2020 to 2022 were largest among people with income below 100% of the federal poverty line (FPL) and income between 200% and 400% FPL.
