ARP will bolster hospital margins by reducing the numbers of uninsured, which is a credit positive.
The expansion of health insurance access and premium subsidies under the $1.9 trillion American Rescue Plan are among the actions that "would subtly improve the revenue profile and reduce cost pressures for not-for-profit hospitals," Fitch Ratings says.
The ARP provides about $8.5 billion in direct aid but only to rural providers. However, Fitch says the ARP will help all hospital margins by reducing the numbers of uninsured, which is a credit positive.
"The most significant measures," Fitch said, "temporarily subsidize healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), subsidizing the premium at 100% through the end of September; provide additional funding/incentives to expand Medicaid coverage in those states that have not yet done so; and expand Affordable Care Act premium subsidies."
Medicaid expansion would have a substantially positive effect on providers in states that have expanded the insurance program because it will reduce the numbers of uninsured patients while increasing Medicaid volumes.
"The law increases the Federal Medical Assistance Percentage by 5 percentage points for two years for states that have not already expanded Medicaid," Fitch said.
States that expanded during the public health emergency may also receive the coronavirus 6.2 percentage point FMAP increase.
When Medicaid expanded in 2014–2015, upgrades of Fitch's rated credits outpaced downgrades by 3:1.
ARP also cuts premium costs for Affordable Care Act plans by increasing tax credits and capping premium contributions at 8.5% of income for mid-level health plans. Those who earn 100% to 150% of the federal poverty level will not pay any premiums.
In line with greater Medicaid coverage, the law increases Medicaid coverage for coronavirus testing and treatment and clarifies that the federal matching rate for vaccinations is 100% for those covered by Medicaid.
The ARP also allocates $50 billion for the Disaster Relief Fund, which could be used to help hospitals with personal protective equipment and other supplies.
The recent confirmation of Xavier Becerra as Secretary of the U.S. Department of Health and Human Services, who is considered a strong supporter of ACA expansion, is seen as further confirmation of the expected direction of healthcare policy.
The Centers for Medicare and Medicaid Services announced earlier this year that it plans to rescind Trump administration approval of Medicaid work requirements.
Hospital finances are stressed, care access is threatened, and staff are burned out.
The nation's hospitals are reporting that the year-long battle with the coronavirus pandemic has put them in "survival mode," contending with stressed margins, burned-out staff, and exacerbated concerns about care access for vulnerable communities, a federal report said.
"Hospitals described difficulty balancing the complex and resource-intensive care needed for COVID-19 patients with efforts to resume routine hospital care," the Department of Health and Human Services' Office of the Inspector General said in a report made public Wednesday.
"(Hospitals) reported that staffing shortages have affected patient care, and that exhaustion and trauma have taken a toll on staff's mental health," the report said. "Administrators detailed challenges associated with vaccine distribution efforts and concerns about vaccine hesitancy among staff and members of their communities."
The report is based on a February 22–26 survey of hospital administrators from 320 hospitals across 45 States, the District of Columbia, and Puerto Rico. They were asked three questions:
What are your most difficult challenges in responding to the COVID-19 pandemic right now, and what strategies have you been using to address the challenges?
What are your organization's greatest concerns going forward?
How can government best support hospitals?
"Hospitals also raised concerns that the pandemic has exacerbated existing disparities in access to care and health outcomes," the report said. "Additionally, many hospitals reported experiencing financial instability because of increased expenses associated with responding to a pandemic and lower revenues from decreased use of other hospital services."
The report noted that many of the challenges posed by the pandemic are even more severe for rural hospitals.
Beyond providing more money, especially for hospitals in rural and underserved areas -- the hospitals said government could best help them by offering guidance on COVID-19 treatment and prevention, including safe discharges of COVID-19 patients, help to reduce depleted staff, especially nurses and specialists, and continuing to encourage the public to get vaccinated.
In the long-term, the hospitals said the pandemic has exposed existing gaps in the nation's care delivery system. The recommend that the federal and state governments and healthcare stakeholders use the public health emergency to address issues that predate the pandemic, such as healthcare disparities and access.
"These improvements include reducing disparities in access to healthcare and in health outcomes, building and maintaining a more robust health care workforce, and strengthening the resiliency of our health care system to respond to pandemics and other public health emergencies and disasters," the report said.
Mental health was the top consultation. Patients in COVID-19 hot spots, younger patients, urban patients, and patients with two or more chronic conditions were more likely to use telehealth.
Telehealth accounted for one-in-four (24%) outpatient consultations among privately insured working-age adults during the first four months of the COVID-19 pandemic in 2020, up from 0.3% for the same period in 2019, a new study shows.
"Telehealth has been around for a long time, but the recent increase has been enormous," said study lead author, Jonathan Weiner, DrPH, co-director of the Center for Population Health Information Technology and professor in the Department of Health Policy and Management at the Bloomberg School.
"These findings will not only help doctors and other clinicians plan for the future, they will also guide policymakers and technology companies, especially as we learn more about the challenges of accessing telehealth among older patients, the uninsured, and low-income patients," Weiner said.
The shift to telemedicine was prompted by the shuttering of many healthcare venues during the initial months of the pandemic for fear of transmitting the virus. At the same time, Weiner noted, insurance companies and the federal government were loosening restrictions on telehealth consultations to meet consumer demand.
The study analyzed Blue Health Intelligence-compiled claims data from 36.6 million private insurance plan members who were of working age and continuously enrolled during the study period.
A total of 15 million telehealth claims were submitted during the March to June 2020 study period, with 75% involving video, 9.2% using audio-only telephone, 3.3% conducted either by email or chat while 13% were unspecified.
Mental health was the top virtual consultation, with 46% taking place via telehealth, while 22% of medical consults were virtual.
In COVID-19 "hot spots" -- states with a COVID-19 prevalence at least 1.5 times the national average – 36% of all consults were telehealth versus 21.6% in low COVID-19 areas. The study also found that the greater the COVID-19 prevalence in a specific ZIP code, the higher the use of telehealth.
About 24% of consultations in urban areas were via telehealth, compared to only 14% of visits from more rural settings. Age and number of chronic diseases were associated with more frequent telehealth consults, with individuals age 18 to 49 and those with more than two chronic conditions using telehealth the most.
The study also found that:
Total overall total medical care costs, including hospitalizations, dropped 15%, from $358 to $306 per person per month, from 2019 to 2020. Persons with at least one COVID-19-related consult in 2020 had more than three times the medical costs compared to those with no COVID-19-related services--$1,701 per member per month versus $544, a difference of $1,157.
In-person, outpatient visits decreased by 37%, from an average of 1.63 visits per enrollee during the three-month 2019 study period to an average of 1.02 visits per enrollee in 2020. However, since telehealth visits filled much of the gap, the total combined in-person and virtual encounter rate dropped only 18% between 2019 and 2020.
For persons with at least one COVID-19-related insurance claim, the average number of in-person and telehealth consults were about 30% higher than the average number of claims for persons with no COVID-19-related visit. One-quarter of COVID-19-related consults were via telehealth versus 23% for non-COVID-19-related consults.
"Even though some of our findings are unique to the COVID-19 era, we need to consider what telehealth will look like beyond the pandemic," Weiner said. "We will need to continue to assess and modify telehealth strategies to maximize value during this digital age, particularly given the challenges of the digital divide across social and geographic lines."
A drone under development at the University of Cincinnati would fly inside patients' homes to deliver medical supplies.
University of Cincinnati engineers and healthcare academicians are building a semi-autonomous telehealth drone to improve access to medical care for homebound patients in remote or underserved areas.
The drones, which are still in the developmental stage, will be big enough carry medicine or supplies directly to patients inside their homes, but small enough to maneuver in constricted confines using navigation algorithms the UC engineers are designing.
"Most drones rely on controllers that work on radio communication and require line-of-sight for safe, remote operation," said Manish Kumar a professor of mechanical engineering at UC, and one of several inventors working on the project.
"That’s why most drones have limited operational range. If you want beyond line-of-sight control, you need some autonomous capabilities," he said.
Using cameras and a display screen, the drones will allow patients to speak with their providers from their homes. The prototype carries a waterproof box the size of a small first-aid kit to deliver medical supplies or collect self-administered lab tests.
The UC engineers are also developing autonomous systems that combine artificial intelligence with sensors that allow drones to navigate complex three-dimensional environments, such as inside a patient's home.
Kumar has been experimenting with sensors in a "smart house" to develop aids for older or disabled residents in a partnership with Maple Knoll, Inc., a nursing home, independent living, assisted living and rehabilitative care provider.
The project is a collaboration between UC's College of Nursing, College of Allied Health Sciences and College of Engineering and Applied Science.
As COVID-19 volumes declined in February, hospitals saw new admissions, margins and revenues fall.
Despite the rising numbers of vaccinations and signs that the COVID-19 pandemic may be receding, the nation's hospitals continued to struggle with thinning margins in February, Kaufman Hall reports.
"February hospital margins remained slim to negative," KH said in its National Hospital Flash Reportfor March. "Margins were affected by continued low outpatient volumes combined with declining inpatient volumes following January’s record-high COVID-19 hospitalizations."
Hospitals saw record numbers of COVID-19 patients in January but as those pandemic-related volumes declined in February, they weren't replaced by other admissions, and so hospitals saw expenses rise while margins, volumes, and revenues fell below levels seen in February 2020, KH said.
"As COVID-19 metrics begin to wane and much of the country turns to talk of a possible forthcoming end to the pandemic, hospitals and health systems remain in a tenuous position," KH said. "Organizations continue to bear the high costs of fighting the unpredictable virus as many non-COVID patients remain reluctant to seek outpatient services."
KH cited COVID Tracking Project data showing that COVID-19 hospitalizations were down to 47,352 on February 28, the lowest since late October 2020. Centers for Disease Control and Prevention data show that new daily admissions of infected patients dropped 74% from a high of 18,009 on January 5 to 4,772 on February 28. At the same time, the number of new cases continued to fall in February as vaccinations surged. As of March 16, more than 39 million Americans were fully vaccinated.
Among the KH metrics for February:
Not counting federal aid through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the median Kaufman hall hospital Operating Margin Index was –0.5%. With the funding, it was 0.4%."
Median Operating EBITDa Margin was 4 .1% without CARES and 5.4% with CARES.
Operating Margin fell 30.8% (3 percentage points) from February 2020 to February 2021 without the federal aid, while Operating EBITDa Margin was down 22.6% (3.2 percentage points).
With CARES, Operating Margin fell 23.4% (2.6 percentage points) and Operating EBITDA Margin fell 18.3% (2.4 percentage points) year-over-year.
Year-to-date, Operating Margin declined 48% (4.2 percentage points) without CARES and 36% (3.3 percentage points) with CARES.
Adjusted Discharges fell 16.8% YTD and 13.8% YOY, Adjusted Patient Days declined 8.8% YTD and 8.3% YOY, and Operating Room Minutes fell 13.0% YTD and 6.9% YOY.
Emergency Department Visits—which have seen double-digit declines every month since the start of the pandemic—continued to see the largest volume declines, down 25.6% YTD and 26.8% YOY in February.
Average Length of Stay was up 8.5% YTD and 7.3% YOY, but fell 3.4% compared to January, reflecting a decline in high acuity COVID-19 patients.
February revenue results varied, with declines in overall revenues but increases in adjusted revenues. Gross Operating Revenue (not including CARES) dropped 5.2% YTD and 4.6% YOY.
Continued declines in outpatient visits drove Outpatient Revenue down 8.8% YTD and 5.5% YOY, falling below prior-year levels for the tenth time in 11 months.
Inpatient Revenue was down 1.3% YTD and 4.4% YOY. After adjusting for the month’s low volumes, Net Patient Service Revenue (NPSR) per Adjusted Discharge rose 16.9% YTD and 14.9% YOY, and NPSR per Adjusted Patient Day rose 7.1% YTD and 7.6% YOY.
Total expenses showed relatively low increases but jumped significantly once adjusted for volume levels. Total Expense was up 2.6% YTD and just 1.1% YOY.
Total Labor Expense rose 3.9% YTD and 1.0% YOY, and Total Non-Labor Expense increased 1.2% YTD and 2.2% YOY. Total Expense per Adjusted Discharge, however, was up 24.4% YTD and 19.6% YOY. Labor Expense per Adjusted Discharge increased 25.4% YTD and 18.8% YOY as hospitals maintained elevated staffing levels.
Non-Labor Expense per Adjusted Discharge rose 22.1% YTD and 20.7% YOY, driven in part by a 29.1% YOY increase in Drug Expense per Adjusted Discharge and a 24.3% YOY increase in Purchased Service Expense per Adjusted Discharge.
KH warned that February's metrics "illustrate the ongoing uncertainty stemming from a devastating pandemic."
"The pace of these dynamics will vary over time, impacting volumes, revenues, and expenses. as many push for a rapid return to "normal," hospital and health system leaders face a hard reality that there may never be a return to the old normal," KH said.
"The pandemic likely will have long-lasting repercussions on patient behavior, volumes, and the role of telehealth in an evolving healthcare landscape."
Of those recoveries, $855 million were from 786 civil settlements or judgments and $173 million were for criminal convictions, OIG reported, adding that the MFCUs recovered $3.36 for every $1 spent investigating fraud.
In addition, the 53 fraud units – one for each state, the District of Columbia, and Puerto Rico and the U.S. Virgin Islands -- secured 1,017 criminal convictions, 744 of which were fraud-related, and 243 of which were for patient abuse or neglect.
"Similar to previous years, significantly more convictions for fraud involved personal care services (PCS) attendants and agencies than any other provider type," the report said.
Fraud investigations also resulted in 928 people or entities to be banished from Medicare.
The bill heads to the Senate, which must act before the moratorium expires on April 1 and 2% cuts to Medicare kick in.
On a heavily partisan vote, U.S. House Democrats on Friday extended through the end of 2021 a moratorium on about $12 billion in Medicare sequester cuts that were supposed to take effect April 1.
It now heads to the Senate, which must act before the March 29 Easter break to avoid the deadline.
The tepid support among Republicans is troubling for the bill's supporters because it cannot pass the Senate through reconciliation and would require 60 votes. It is not clear how much support the bill has among Senate Republicans.
A bill sponsored by Sens. Jeanne Shaheen, D-N.H., and Susan Collins, R-Maine, would prevent the 2% sequestration cuts from taking effect during the COVID-19 public health emergency and would be paid for with a one-year extension of the sequestration period, which now expires in 2030.
The House bill also excludes the budgetary effects of this bill and the American Rescue Plan Act of 2021 from the Statutory Pay-As-You-Go Act of 2010 scorecards, which otherwise could trigger across-the-board cuts to Medicare and other programs. Without this, additional sequester cuts will kick in at the end of session.
A Pay-As-You-Go sequester has never been triggered. Congress always pushes the deadline back.
The bill also makes technical changes to the rural health clinic provisions in the Consolidated Appropriations Act, 2021. Specifically, the CAA required that the payment rate for RHCs certified after Dec. 31, 2019, be capped at $100 per visit, starting April 1, 2021. This rate will increase gradually through the Medicare Economic Index but will remain below provider-based RHC rates.
American Hospital Association President and CEO Rick Pollack thanked the House for passing the bill and urged the Senate to do the same.
"Now is not the time to pull resources away from these critical efforts," he said. "We now look forward to working with the U.S. Senate to achieve relief from the pending Medicare sequester cuts before they go into effect."
An over-the-counter mouthwash could slow the spread of the virus.
A swig of good old Listerine could "disrupt" transmission of the COVID-19 virus, a new study shows.
Under laboratory conditions, researchers at Rutgers School of Dental Medicine found that two types of mouthwash – over-the-counter Listerine and prescription Chlorhexidine – disrupted the virus within seconds after being diluted to concentrations that would mimic actual use.
The study, published in Pathogens, was conducted using concentrations of the mouthwash and the time it would take to contact tissues to replicate conditions found in the mouth. Study senior author Daniel H. Fine, chair of the school's Department of Oral Biology, said further studies are needed to test real-life efficacy in humans.
"The ultimate goal would be to determine whether rinsing two or three times a day with an antiseptic agent with active anti-viral activity would have the potential to reduce the ability to transmit the disease," Fine said. "But this needs to be investigated in a real-world situation."
Fine's study found two other mouthwashes could potentially providing some protection in preventing viral transmission: Betadine, which contains povidone iodine, and Peroxal, which contains hydrogen peroxide.
However, only Listerine and Chlorhexidine disrupted the virus with little impact on skin cells inside the mouth that provide a protective barrier against the virus, he said.
"Both Povidone iodine and Peroxal caused significant skin cell death in our studies, while both Listerine and Chlorhexidine had minimal skin cell killing at concentrations that simulated what would be found in daily use," Fine said.
Until the findings can be proven in clinical trials on humans, Fine warned the public against relying on mouthwash as a way to slow the spread of the virus.
The hospital association says the deal would squash competition and raise costs for consumers and providers.
The American Hospital Association has asked the Department of Justice to launch an anti-trust investigation of United Health Group's proposed $8 billion acquisition of software and data analytics provider Change Healthcare.
In a seven-page letter Thursday to Richard Powers, acting assistant attorney general at DOJ's Antitrust Division, AHA General Counsel Melinda Reid Hatton raised concerns that the deal "threatens to reduce competition for the sale of healthcare information technology services to hospitals and other health care providers, which could negatively impact consumers and health care providers."
Reid Hatton said UHG and Change are aware that the deal "presents substantial antitrust concerns because the transaction agreement provides that the Parties will divest assets that generate hundreds of millions of dollars in revenue in order to obtain DOJ approval."
In a joint press release at the time of the announcement, Eden Prairie, Minnesota-based UnitedHealth, and Nashville-based Change Healthcare said the combined company "will more effectively connect and simplify core clinical, administrative and payment processes - resulting in better health outcomes and experiences for everyone, at lower cost."
Optum issued a statement Thursday night that skirted the issues raised in the AHA letter.
“Optum and Change Healthcare share a vision for better health outcomes and experiences for everyone, at lower cost. With distinct and complementary capabilities, this combination will help healthcare providers and payers better serve patients by more effectively connecting and simplifying key clinical, administrative and payment processes to the benefit of the health system and the people we serve,” the company said.
Reid Hatton said the deal would consolidate and shift away competitively sensitive healthcare data from Change Healthcare, now a neutral third-party, to UGH subsidiary Optum.
"Because Optum's parent, UHG, also owns the largest health insurance company – UnitedHealthcare – in the United States, the combination of the Parties' data sets would impact (and likely distort) decisions about patient care and claims processing and denials to the detriment of consumers and health care providers, and further increase UHG’s already massive market power," Reid Hatton said.
The letter noted that UHG generated more than $242 billion in 2019, and that subsidiary UnitedHealthcare is the largest health insurance company in the nation, with more than 70 million members, and commercial, Medicare and Medicaid insurance plans.
Reid Hatton said UnitedHealthcare also has the largest or second largest market share in 20 states, with a network that includes 1.4 million physicians and other clinicians, and more than 6,500 hospitals.
Optum and its OptumHealth, OptumRx, and OptumInsight businesses generate about 50% of UHG's earnings, Reid Hatton said, and are expected to continue to drive UHGs revenues over the next three years.
Reid Hatton cited UHG's company reports boasting that OptumInsight provider health care IT services to more than 5,000 (9 out of 10) hospitals and 100,000 physicians, and processes more than 5 billion pages of clinical documents and processes data covering 240 million people each year.
Change Healthcare reported a net loss of nearly $59 million in Q1 2021, attributed largely to the negative impact of the coronavirus disease 2019 (COVID-19) pandemic on the business model, according to the company's latest earnings results released Wednesday afternoon.
Change Healthcare LLC, a joint venture previously held by McKesson that Change purchased in early March, delivered a net income of nearly $72 million and an adjusted net income of $141.5 million.
The two California nonprofit health systems have signed a letter of intent and have begun due diligence.
Keck Medicine of USC and Methodist Hospital of Southern California are "exploring an affiliation" that "would bring Methodist Hospital into the Keck Medicine clinical enterprise," the two Southern California-based health systems announced this week.
The two nonprofit health systems signed a letter of intent and are entering a due diligence period for the merger, which both systems say would improve care access in the San Gabriel Valley region.
Financial terms were not disclosed.
Three-hospital Keck Medicine of USC is one of two university-based medical systems in Los Angeles and includes flagship Keck Hospital of USC, USC Norris Cancer Hospital, USC Verdugo Hills Hospital and more than 80 outpatient clinics in Los Angeles, Orange, Kern, Tulare and Ventura counties.
Arcadia-based Methodist is a 348-bed community hospital that during a normal year records about 16,000 patient admissions and 50,000 emergency department visits.
"Methodist Hospital has a longstanding history of providing excellent care in the San Gabriel Valley and has the potential to be a strong partner as we work together to expand services and create easier access to primary and complex care for the people we serve," Keck Interim CEO Rodney Hanners said in a media release.
"This affiliation would not only complement our current satellite in Arcadia, but also provide opportunities to elevate our entire network that we are excited to explore further," he said.
Executives at both systems will speak with Keck Medicine clinical faculty, physician leaders at Methodist Hospital, and other stakeholders across the region in the coming months to finalize the terms of merger.
No date was given for when the affiliation will be finalized.
"This affiliation represents an opportunity to ensure that our hospital remains well-positioned to meet the health care needs of generations to come," said Methodist President and CEO Dan Ausman.
"It would enable our physicians to care for their patients as they always have, with expanded access to the USC network of care teams, clinical services and outpatient facilities throughout the San Gabriel Valley," Ausman said.
