Atlantic Health System President and CEO Brian Gragnolati says he believes healthcare that is delivered as a 'team sport' works best when the focus is on access, insurance, affordability, and proactive, preventive care.
"From day one," Brian Gragnolati, president and CEO of Morristown, New Jersey–based Atlantic Health System, says without hesitation, when the veteran healthcare executive is asked when he became a true believer in the gospel of value-based care.
A long-held belief in healthcare delivered as a "team sport" that works best when the focus is on access, insurance, affordability, and proactive, preventive care started when Gragnolati was an undergraduate at the University of Connecticut in the late 1970s.
At UConn, Gragnolati got an introduction to the clinical side of healthcare by working as an emergency medical technician to help pay his tuition.
"It was that experience of taking care of patients that convinced me that healthcare would be a great way to continue the work that I was doing as an EMT," Gragnolati recalls. "But I also recognize that I did not necessarily have what was needed to be a physician."
Fortunately for Gragnolati, UConn offered a healthcare systems engineering program and that's where he found his niche.
"In retrospect, that program was way ahead of its time," Gragnolati recalls. "It was interdisciplinary, so I took classes in the School of Public Health, the School of Allied Health, the School of Business, and the School of Engineering."
"We had interdisciplinary projects that we worked on and, lo and behold, that set up the work that I do here, even today, trying to bring different groups together to work on complex problems," he says.
"That's really what started my career. I came to realize that healthcare is a team sport, and how you finance healthcare is also a team sport, and we've got to do a better job playing like teammates on that."
The other big influence in Gragnolati's life was his father, who served as a Connecticut state legislator, and who taught his son the importance of cooperation, building consensus, being practical, and believing in the process.
"Getting involved on the advocacy and policy side was another way that I could approach healthcare and use a skill set that I understood," says Gragnolati, who is also the 2019 chairman of the board of trustees at the American Hospital Association.
"Consequently, I've always been pragmatic about how is healthcare going to continue to be funded, and I have always had an eye on affordability and how we make sure that whatever we're doing is going to be able to be continued," he says. "Throughout my career, I realized that unless you had access to insurance, you were going to struggle to get healthcare. As I continued my work in various capacities, I kept seeing that becoming a roadblock."
In mid-2015 Gragnolati took the CEO job at Atlantic Health System after serving for several years as a senior vice president at Johns Hopkins Medicine.
Following are highlights from a recent conversation between Gragnolati and HealthLeaders.
"What I saw here when I was looking at this role was an organization that was of sufficient size that could make the kinds of investments needed to be made in data systems, in the talent that we were able to bring in, in the technology."
"Specifically, I really liked what was being done here with the accountable care organizations and how they were developed, and I liked that they were beginning to move the commercial payment systems and data into an ACO infrastructure."
"[Atlantic Health System in mid-2018 began a partnership with urgent care provider MedExpress, owed by Optum, a subsidiary of UnitedHealth Group, co-operating 11 joint clinics in northern New Jersey] and is another example of how you partner with somebody differently. Historically, they haven't done these types of relationships where we actually own part of that organization."
"The reason we did it is because there are a lot of urgent care centers in this region. The easy thing for us to do would be to just put another one up and put our brand on it, but then all four corners of an intersection would have an urgent care center on it and continue to confuse the heck out of the patient-consumers about where they were going to receive high-quality accessible care."
"We found a great partner in MedExpress, and we've been able to co-brand to take advantage of how the community feels about the care that they receive at Atlantic Health."
"One thing that I've learned through this process is, in addition to being available and convenient and affordable, through the myriad of choices that patients have, they're also looking for urgent care centers that they can have confidence in. Our participation did bring that. When you talk to the folks on the ground, the leadership in each of the centers, they would agree with that."
"Probably the most important thing that I've learned is that continuity of care is very important. What's critically important is that we can get reliable information moved across from MedExpress and to MedExpress for our patients in a way that reduces unnecessary testing and makes sure that the providers have access to information that can help the patient when they're there."
"That's a really important piece because we have a system in this country of fragmented care. Our example of our relationship with MedExpress moves that in another direction."
Starting with the 2020 enrollment period, Health Exchange plans in every state will be graded on a five-star quality rating.
Health plans offered on the Health Insurance Exchanges will be required in the 2020 enrollment period to post their grades on a five-star Quality Rating System, under a mandated announced Thursday by the Centers for Medicare & Medicaid Services.
"Knowledge is power, and for the first time, consumers will have access to meaningful, simple-to-use information to compare the quality, along with the price, of health plans on Exchange websites, including HealthCare.gov," CMS Administrator Seema Verma said in amedia release.
"This addresses our strongly held commitment to equip consumers with the tools they need to find the best choice possible. Increasing transparency and competition drive better quality and cost, with consumers benefitting the most, " Verma said.
The overall star rating is based on three categories: Medical Care, Member Experience and Plan Administration. The ratings will address factors including how enrollees rate the doctors and the care they receive in the plan's network, how well the network providers coordinate care with enrollees and doctors, administrative competence, customer service, and access to personal health information.
CMS operated a pilot five-star ratings on HealthCare.gov in Virginia and Wisconsin during the 2017 and 2018 enrollment periods. The pilot was expanded to Michigan, Montana, and New Hampshire during the 2019 enrollment period.
The ratings system has the blessing of America's Health Insurance Plans, which said in a statement that "the nationwide expansion of the health quality measures is a positive step to help consumers review and select a plan that fits their needs for the year."
The Blue Cross Blue Shield Association said its member companies would "continue to work with CMS on ensuring that the information is displayed in a manner that is meaningful for patients when making selections during Open Enrollment this fall."
CMS is posting star ratings and quality measure level data from the 2019 Plan Year in a Public Use File. The star ratings data for the 2020 Plan Year will be released closer to open enrollment, which runs from Nov. 1, to Dec. 15, 2019.
Population growth and gains in employer-sponsored coverage did not overcome drops in Medicaid, CHIP and ACA marketplace coverage.
Even with a strong economy and robust job market, 700,000 people lost health insurance between 2016 and 2017, an Urban Institute study shows.
The uninsured rate national increased from 10% in 2016 to 10.2% in 2017, the first increase since 2013 and the advent of the Affordable Care Act. Under the ACA, the uninsured rate fell every year between 2013 and 2016 and 18.5 million people gained coverage, according to the study, which was commissioned by the Robert Wood Johnson Foundation.
The report found that population growth and increases in employer-sponsored insurance mitigated, but did not overcome, reductions in Medicaid and CHIP and ACA marketplace coverage.
"An additional 2.3 million people had ESI in 2017, but 1.9 million fewer people had coverage through Medicaid, CHIP, or the ACA marketplaces," the report said.
The uninsured rate in Medicaid expansion states held at 7.6%, but grew from 13.7% to 14.3% in non-expansion states, which also lost marketplace coverage at twice the rate of expansion states.
The coverage losses were felt across all age groups and incomes, although non-Hispanic white and black nonelderly people, those with at least some college education, and people living in the South and Midwest saw disproportionate coverage losses.
Earlier this week, the Centers for Medicare & Medicaid Services reported that enrollment in the individual health insurance market continued to decline last year, especially among those who pay full price for their coverage.
After average monthly enrollment in the individual market rose 7% from 2015 to 2016, it fell 10% in 2017 and another 7% in 2018, according to the CMS report.
Unsubsidized beneficiaries accounted for 85% of the enrollment decline in 2017 and all of the enrollment decline in 2018, which was offset by a small increase in subsidized enrollment, the report states.
While some states saw unsubsidized enrollment drop by less than 1%, others saw more dramatic changes, including six states where unsubsidized enrollment declined by more than 70% between 2016 and 2018, according to the report. Nationwide, unsubsidized enrollment dropped by 40%, or 2.5 million people, during that period, CMS said.
Heyward Donigan takes the reins as Rite Aid and rivals CVS Health and Walgreens Boots Alliance battle to extend their reach into traditional provider services.
Rite Aid Corp. has named veteran healthcare executive Heyward Donigan chief executive officer, effective immediately.
Donigan succeeds John Standley who Camp Hill, Pennsylvania-based Rite Aid said had planned to step aside once his replacement was named.
"I see tremendous opportunity to revitalize the company's position as a leader in meeting the health and wellness needs of customers and patients through our store and pharmacy benefit management platforms," Donigan said in amedia release.
Rite Aid Corp. , the nation's third-largest drug store chain, operates 2,466 stores in 18 states and pharmacy benefits manager EnvisionRxOptions. The company posted $21.6 billion in revenues in fiscal 2019.
Donigan takes the reins as Rite Aid and rivals CVS Health and Walgreens Boots Alliancebattle to expand traditional pharmacy services and extend their reach into provider services, both digitally, and through walk-in clinics and urgent care centers.
Donigan comes to Rite Aid from Sapphire Digital, where for the past four years she has served as the president and CEO. Sapphire Digital, formerly Vitals, designs omnichannel consumer platforms for accessing healthcare providers.
Before that, Donigan was president and CEO of ValueOptions, then the nation's largest independent behavioral health company. She also has extensive experience in the health insurance sector, having served in senior leadership at Premera Blue Cross, Cigna Healthcare, Empire BCBS and U.S. Healthcare.
Rite Aid Board Chairman Bruce Bodaken said Donigan was picked to lead the company based on her "strong senior executive experience, proven leadership capabilities and consistent track record of driving profitable growth, as well as her broad healthcare knowledge and digital shopping technology expertise set her apart."
"Her skillset will be invaluable as we work to deliver on the full potential of our business and create additional long-term value for our shareholders, associates, customers and patients," Bodaken said.
As part of her inducement reward, Donigan will be given $2 million in restricted stock which will vest in equal annual installments for the next three years, and nonqualified stock options valued at $2 million to be vested over the next four years.
Barry S. Sloan, MD, admitted that he gave medically unnecessary prescriptions for 'Subsys' to a 36-year-old Manhattan man who died from an overdose.
A New Jersey physician faces four-to-nine years in prison after pleading guilty this week to second-degree manslaughter in the fentanyl-related overdose death of a patient.
Under a plea deal reached with New York State prosecutors, Barry S. Sloan, MD, of Fort Lee, New Jersey, will also surrender his New York State medical license. The 61-year-old physician had no prior criminal record before entering the plea.
According to documents filed with the Supreme Court of New York County, Sloan admitted that in August 2014, he gave a 36-year-old Manhattan man identified only as "L.W." by prosecutors two separate and medically unnecessary prescriptions for "Subsys," a narcotic approved by the FDA to treat intense pain in terminal cancer patients.
L.W. died of an overdose four days later.
Sloan also admitted he lied to Healthfirst, a Medicaid managed care company contracted by New York to cover the cost of medical care and prescriptions.
Sloan also admitted that between 2012 and 2016, he issued prescriptions for controlled substances, including opioids, to four other patients, without medical justification, which prosecutors said placed each of the patients at significant risk of overdose and death.
"Doctors take an oath to heal, not harm people," New York State Attorney General Letitia James said in a media release. "With a raging opioid crisis, it is unconscionable that a doctor would recklessly endanger lives by providing fentanyl to healthy patients."
Sloan has also been convicted of multiple counts of first-degree reckless endangerment, criminal sale of a prescription for a controlled substance, and third-degree healthcare fraud.
"Stated plainly, Dr. Sloan was a drug dealer in a thinly-veiled disguise, which led directly to this conviction," said Scott J. Lampert, Special Agent in Charge for Health and Human Services' Office of Inspector General.
"His opioid prescribing, in no small part, fueled the spread of these drugs, while he stole from Medicare and Medicaid," Lampert said.
The 837-page expanded public charge rule limits who can get or keep a green card based on their use of government-sponsored programs.
The hospital lobby on Monday called on the Trump administration to rescind a newly expanded public charge definition that critics say would discourage legal immigrants from accessing Medicare, Medicaid and other government-sponsored healthcare.
Rick Pollack, president and CEO of the American Hospital Association, called the Department of Homeland Security's Public Charge Rule "a step in the wrong direction when it comes to fairness with regard to the treatment of legal immigrants seeking a pathway to citizenship."
"It creates barriers to appropriately caring for the sick and injured, and to keeping people healthy. Failure to provide such services also has public health implications that could have widespread impact," he said.
The 837-page expanded public charge rule limits who can get or keep legal a green card based on their use of government-sponsored programs. The rule also treats applicants less favorably if they are poor, have health conditions, are either children or seniors, have large families, or lack education or English proficiency.
Pollack said the new rule would also worsen access for legal immigrants to nutrition aid, housing support and other programs that address social determinants of health.
By some estimates, as many as 26 million immigrants could be adversely affected by the expanded final rule.
The White House issued a media release saying that the expanded rule was needed to "protect American taxpayers, preserve our social safety net for vulnerable Americans, and uphold the rule of law."
The Trump administration said the expanded rule is enforcing the existing Immigration and Nationality Act "which makes clear that those seeking to come to the United States cannot be a public charge."
"For many years, this clear legal requirement went largely unenforced, imposing vast burdens on American taxpayers. Now, public charge law will finally be utilized," the administration said.
Bruce Siegel, MD, president and CEO of America's Essential Hospitals, said the expanded definition "worsens the chilling effect that threatens the health of millions of people by making it more likely they forgo care for themselves and their families to avoid putting their legal immigration status at risk."
"This rule also threatens the stability of essential hospitals, which will sustain higher uncompensated costs as immigrants put off care and seek treatment later, only as a last resort, when they’re sicker and more costly to treat," Siegel said. "In turn, this will drive higher costs for taxpayers and the entire health care system."
Siegel said the expanded rule is "wholly unnecessary" because existing law already bars undocumented immigrants from Medicaid and other government assistance programs and requires legal residents to wait five years before enrolling in either Medicare or Medicaid.
Julie Linton, MD, chair of the American Academy of Pediatrics Council on Immigrant Child and Family Health called the final rule "an assault on my professional role."
"I am unsure how to guide families when I know that enrollment in bread and butter services that keep them healthy could jeopardize the family unity," she said. "This final rule serves to further intimidate and frighten families who seek needed services to keep them healthy and productive."
The National Immigration Law Center said it will file suit to block the final rule.
"This policy denies a permanent, secure future in this country to anyone who isn’t white and wealthy," NILC Executive Director Marielena Hincapié said. "We will not stand for it. The National Immigration Law Center is preparing to sue to fight back against this regulation and protect immigrant families."
California's Democratic Attorney General Xavier Becerra, a frequent and outspoken critic of the Trump administration, said the "vile" expanded rule "is the Trump Administration's latest attack on families and lower income communities of color."
UnitedHealth will cancel two-thirds of Team Health's in-network contracts over the next 11 months.
Team Health Holdings Inc.'s ongoing contract fight with UnitedHealth Group Inc. is hurting the bond status on the Knoxville-based hospital staffing and management company.
Moody's Investors Service on Friday downgraded the outlook for Team Health from stable to negative, after affirming the company's B3 Corporate Family Rating and B3-PD Probability of Default Rating.
"The change of outlook reflects rising uncertainty around Team Health's ability to reduce leverage given its recently disclosed dispute with UnitedHealth Group Inc., one of its largest commercial payors," Moody's said.
Moody's also affirmed the B2 rating on Team Health's senior secured credit facilities and Caa2 rating on its unsecured notes.
UnitedHealth told Team Health last month that it will cancel two-thirds of its in-network contracts with Team Health between October 2019 until July 2020.
UnitedHealth has also significantly reduced its payments to Team Health for out-of-network services, Moody's noted.
Team Health provided a statement to HealthLeaders suggesting that it is lawyering up in preparation for more litigation with UnitedHealth.
"As Team Health continues to see more aggressive and inappropriate behavior by payors to either reduce, delay, or deny payments, we have increased our investment in legal resources to address specific situations where we believe payor behavior is inappropriate or unlawful," the company said.
"To date, Team Health has been successful in getting reasonable reimbursements as a result of that litigation effort. Immediately following their most recent termination, United reached out to Team Health and we have begun negotiations," Team Health said.
The hospital company said that, so far in 2019, it has successfully resolved eight lawsuits and has filed another 13 lawsuits.
"As United continues to arbitrarily terminate contracts, we expect to file more lawsuits for unfair payment practices and unjust enrichment – and despite United's urgings we will not surprise bill patients to make up the difference," Team Health said.
While Moody's said it believes that Team Health and United will eventually reconcile, "modified contracts are likely to come with lower reimbursement rates for Team Health, which will reduce profitability."
"Further, a drawn-out negotiation process may lead to disruption to hospital customers and contract losses," Moody's said.
"While there is a range of potential outcomes for Team Health, the company's very high leverage raises the risk that even a modest reduction in profitability will significantly raise debt/EBITDA," Moody's said.
TeamHealth's pro forma debt to EBITDA was estimated by Moody's at approximately 8.2 times on June 30.
Moody's noted that the B3 rating is supported by Team Health's ability to generate positive cash flow of more than $100 million a year, and that the company's liquidity remains solid.
"The company has a sizable cash balance ($299.4 million as of 6/30/2019), near full availability of its $400 million revolver and no near-term debt maturities," Moody's said.
"The company has also shown early signs of progress in executing its business turnaround. This affords the company some flexibility to absorb a modest negative development with respect to contract negotiations with UnitedHealth," Moody's said.
Even with that, Moody's said, the reduced payments from UnitedHealth and potentially other insurers will create a "meaningful decline in free cash flow (that) will likely lead to a rating downgrade."
"Reduced free cash flow would not only limit the company's ability to repay debt, but also its ability to execute its tuck-in acquisition strategy," Moody's said.
A new study shows that lower reimbursements from a Medicare public option would threaten 1,037 rural hospitals in 46 states, which represent more than 63,000 staffed beds, 420,000 employees, and 55% of all rural hospitals.
A public option health plan paying Medicare reimbursement rates could shutter more than half of the nation's rural hospitals, according to a new study.
"Even those rural hospitals not at high risk of closure and the communities they serve face an increased threat," according to the study by Navigant Consulting, Inc.
"The availability of a public option could negatively impact access to and quality of care through rural hospitals' potential elimination of services and reduction of clinical and administrative staff, as well as damage the economic foundation of the communities these hospitals serve.," the study said.
The study notes that, with the exception of critical access hospitals, most rural hospitals contend with a negative operating margin of more than 8% when providing care for Medicare patients, and cost-shift to higher-paying commercial plans and employers to offset the loss.
A Medicare public option would threaten 1,037 rural hospitals in 46 states, which represent more than 63,000 staffed beds, 420,000 employees, and 55% of all rural hospitals in the United States, the study said.
The study looked at three scenarios should a Medicare public option plan come to fruition.
Revenue loss to rural hospitals is projected to be 2.3% under a Medicare public option if only the uninsured and current individual market participants shift to the public option, placing an estimated 28% of rural hospitals at high risk of closure.
If employers shift 25% to 50% of their covered workers from commercial coverage to a Medicare public option, hospital revenues would fall 8%-14% and cause an estimated 51% to 55% to face high risk of closure with an additional 39% to 41% facing moderate risk.
Medicare would have to increase hospital payments for a public option between 40% and 60% above present Medicare rates to keep hospitals whole. That would cost between $4 billion and $25 billion annually, depending upon how many employers shift to the public option.
More than 100 rural hospitals have closed across 29 states since 2010, and rural hospitals in states that have not expanded their Medicaid rolls have been particularly hard hit.
To help struggling rural hospitals, the Trump administration last week issued a final rule to increase the wage index for hospitals with a wage index value below the 25th percentile. CMS is also finalizing changes to the wage index "rural floor" that will remove urban to rural hospital reclassifications from the calculation of the rural floor wage index value beginning in FY 2020.
To pay for the wage index hike, CMS is using a budget neutrality adjustment to the standardized amount that is applied across all IPPS hospitals. The American Hospital Association said the wage index hike for rural hospitals comes at the expense of urban hospitals, and has called on CMS to "increase the wage index in a non-budget neutral manner."
The new rule stipulates that coverage will be provided only at healthcare facilities that are enrolled in FDA risk evaluation and mitigation strategies.
Medicare will offer nationwide coverage for Chimeric Antigen Receptor T-cell therapy to fight certain cancers, the Centers for Medicare & Medicaid Services has announced.
Coverage for CAR T-cell therapy, which harnesses a patient's genetically-modified immune cells to fight disease, will be limited for use in treating Medicare patients with certain types of non-Hodgkin lymphoma and B-cell precursor acute lymphoblastic leukemia, CMS said.
By some estimates, CAR T-cell therapy can cost as much as $375,000 for a one-time treatment, depending upon the cancer type and treatment regimen. That estimate does not include hospital stays and other related expenses.
"As the first type of FDA-approved gene therapy, CAR T-cell therapies are an important scientific advancement in this promising new area of medicine and provide treatment options for some patients who had nowhere else to turn,” Verma said.
The new rule stipulates that coverage will be provided only at healthcare facilities that are enrolled in the Food and Drug Administration risk evaluation and mitigation strategies for FDA-approved indications.
In the final rule, CMS dropped a requirement that hospitals collect data on patient outcomes under the CAR T therapies, which hospitals had complained was too burdensome. Instead, CMS said it will monitor medical data from the FDA's post-approval safety studies.
The FDA has required CAR T-cell therapy makers to conduct post-marketing observational studies involving patients treated with the therapies.
"We know there are relatively limited data about the use of these life-saving therapies in the Medicare population. Our robust post-market surveillance programs will continue to monitor for potential risks, as we do for all licensed and approved medical products," said Acting FDA Commissioner Ned Sharpless, MD.
"We will also continue to carefully assess the benefits and risks when considering whether to approve new CAR T-cell products," he said.
The Brentwood, Tennessee-based hospital operator saw operating drops in net operating revenue and adjusted EBITDA.
Quorum Health Corporation reported net operating revenues of $442.2 million in Q2, a net loss of $16.9 million, and down $30 million year-over-year, with adjusted EBITDA falling by $2.9 million, according to an earnings report released Wednesday afternoon.
Among other key financial metrics, Quorum posted a $10.4 million loss in cash flows from operating activities, one year after recording negative cash flows of $17.2 million, and slashing its quarterly net loss from $99 million to $39 million. EBITDA fell to $36.9 million, compared to $40.2 million in Q2 2018.
The Brentwood, Tennessee-based hospital operator saw a $16 million drop in same-facility year-over-year net operating revenues, down to $442.4 million for Q2.
In other notable metrics:
Compared to Q2 2018, same-facility net patient revenues decreased 2.6%, while same-facility net patient revenues per adjusted admission increased 0.9%.
The decrease in same-facility net patient revenues compared to Q2 2018 reflects a 3.4% decline in same-facility adjusted admissions and a 2.2% decline in same-facility surgeries. The decline in volumes compared to Q2 2018 represents approximately $14.9 million of same-facility net patient revenues.
Same-facility net operating revenues for Q2 reflect a $5.6 million decrease related to the pending divestitures of Watsonville Community Hospital and MetroSouth Medical Center.
In June, Quorum announced plans to sell Watsonville by the end of Q3, a deal which is expected to provide Quorum with $35 million to $40 million.
Q2 2019 Adjusted EBITDA was 7.6% of net operating revenues and Same-facility Adjusted EBITDA was 8.3% of same-facility net operating revenues.
Same-facility surgeries in Q2 improved 8.9% compared to the first quarter of 2019, which Quorum credited to improved volumes at two facilities that brought in new physicians and re-syndicating two outpatient surgery centers in Illinois.
