Almost 80% of Medicare risk-bearing ACOs said they were "very concerned" about their financial performance this year.
More than half of accountable care organizations in Medicare's Shared Savings Program say they'll likely leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic.
That's according to a new online survey conducted this month by the National Association of Accountable Care Organizations, which asked 2020 Medicare Shared Savings Program and Next Generation ACO Model participants across the nation to gauge their experience in handling the ongoing pandemic.
Almost 80% of the 225 ACOs that responded to the five-question survey, conducted between April 3-8, said they were "very concerned" about their financial performance this year.
Further, 56% of respondents they would leave the payment model, including 21% who said they were "very likely," 14% who were "likely" and 21% who said they were "somewhat likely."
"When ACOs made a commitment to assume risk, they didn't expect they'd be handling the risk of a global pandemic," said NAACOS President and CEO Clif Gaus.
"Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31," he said. "Medicare's decade-long effort to change how we pay for health care to better reward quality and outcomes may be lost unless Washington acts quickly to throw these providers a lifeline."
In mid-March, NAACOS cosigned a letter with the American Hospital Association, the American College of Physicians, and seven other stakeholder organizations, askingthe Centers for Medicare & Medicaid Services to hold harmless Shared Savings participants from performance-related penalties for 2020. CMS has yet to respond.
"CMS has yet to adequately mitigate the costs and disruptions of the pandemic," Gaus said. "ACOs are telling us that they will leave the program unless there is protection from the losses of the pandemic, and it would be a tragedy for millions of Medicare beneficiaries to lose the access to care coordination and quality improvement that ACOs offer."
NAACOS estimates that the COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billionover the next year. A separate study released last week by America's Health Insurance Plans estimated the cost of the pandemic for the nation's healthcare system at between $56 billion and $556 billion
Because of the pandemic, about 25% of ACOs said they expect spending to increase by more than 10%, another 25% say they expected spending to increase between 5% and 10%, while 10% said they expect spending to remain the same or fall, and 37% said they "don’t know."
The wide variance in cost estimates depends upon how many people are infected by the virus, the availability of testing, and compliance with preventative measures such as social distancing.
The federal government is making available more than $100 billion to cover costs for the nation's hospitals under the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
That $100 billion averages about $108,000 per hospital bed. Is it enough?
Moody's Investors Service doesn’t think so, particularly if the pandemic extends for months. The rating agency called the federal aid "extraordinary" but also "unlikely to fully cover the material revenue decline facing hospitals as a result of the pandemic."
Moody's Vice President Dan Steingart said the $100 billion "provides some relief to hospitals by supporting their operations and providing access to critical supplies."
"However, it is unlikely to fully compensate the sector for the two main financial challenges facing providers as a result of the coronavirus outbreak," he said.
"The first is a material decline in revenue and cash flow as profitable elective surgeries, procedures and other services are postponed to preserve resources and avoid spreading the virus," he said. "The second is difficulty curbing expenses as surge preparation costs offset any expense reductions from postponed or canceled services."
Citing anecdotal evidence, Moody's estimates that postponed elective services will reduce hospital revenues by as much as 40% per month and strain cash flow. These reductions are occurring, Moody's said, even at hospitals and areas of the country that have not seen that many COVID-19 patients.
That's because many states have suspended nonessential hospital services indefinitely, creating uncertainty for hospitals about when they can resume providing these money-making elective services, Moody's said.
Up to $556B Over 2 Years
A study released Wednesday by America's Health Insurance Plans offers a canyon-wide estimate of the pandemic's cost for commercial health plans, ranging from $56 billion to $556 billion over the next two years.
The wide cost variance in the study, conducted by Wakely Consulting Group, depends upon how many people are infected by the virus, the availability of testing, and compliance with preventative measures such as social distancing.
Assuming a 20% infection rate among the study population, for example, Wakely estimates that more than 50 million people will become infected, with at least 5.5 million requiring hospitalization – of which 1.3 million will require intensive care, with average ICU costs per patient exceeding $30,000.
"This new data provides us with better insight to help policymakers, private sector leaders, and other stakeholders understand the investments required to successfully care for every American subjected to this life-threatening virus," AHIP President and CEO Matt Eyles said.
Wakely estimates enrollee cost sharing would average approximately 14%-18% of annual allowed costs and would range from $10 billion to $78 billion. That estimate does not take into account decisions by some payers to waive out-of-pocket costs for COVID-19 testing and treatment.
Treating the Uninsured
A study this week by Kaiser Family Foundation estimates that providing care for up to two million uninsured Americans infected with the virus could cost between $13 billion and $42 billion, consuming more than 40% of the CARES Act funding for hospitals.
The variance of the estimate is owing to uncertainty about how may people will become infected.
"Covering COVID-19 hospital costs for patients who are uninsured would give them peace of mind that their inpatient costs will be covered," KFF President and CEO Drew Altman said. "While the details are spotty, uninsured patients could still be on the hook if they test negative for coronavirus and if they receive care outside hospitals."
Altman said the KFF analysis raises questions about how the federal government will help offset the bills of uninsured patients, and whether it reimburses physicians who treat uninsured COVID-19 patients.
The payment advances, essentially loans that will have to be paid back, were distributed under CMS's Accelerated and Advance Payment Program.
The Centers for Medicare & Medicaid Services said it used a streamlined approval process this week to distribute $34 billion in Medicare advanced payments to 17,000 providers and suppliers battling COVID-19
The payment advances – essentially loans that will have to be paid back – were distributed under CMS's Accelerated and Advance Payment Program, which is funded by the Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) trust funds, which are the same fund used to pay Medicare claims.
The $34 billion outlay is separate from the $100 billion provided in the Coronavirus Aid, Relief, and Economic Security Act, which distributes funds that do not need to be repaid.
CMS Administrator Seema Verma said the new streamlined process reduced the processing time from three or four weeks to four to six days.
"Healthcare providers are making massive financial sacrifices to care for the influx of coronavirus patients," Verma said in a media release.
"Many are rightly complying with federal recommendations to delay non-essential elective surgeries to preserve capacity and personal protective equipment," she said. "They shouldn't be penalized for doing the right thing."
CMS this month has received more than 25,000 requests from providers and suppliers for expedited payments and has approved more 17,000 requests in the past week.
Before the pandemic, CMS had approved about 100 requests for advanced payments in the past five years, mostly for natural disasters such as hurricanes and tornadoes.
"Amid a public health storm of unprecedented fury, these payments are helping providers and suppliers – so critical to defeating this terrible virus – stay afloat," Verma said.
The expedited payments are available to Part A providers, including hospitals, and Part B suppliers, including doctors, non-physician practitioners and durable medical equipment suppliers.
Most of the stakeholders can get an advance on three months of their Medicare reimbursements, and some providers can get up to six months.
CMS will apply claims payments to offset the accelerated/advance payments four months after the pay-out.
Most hospitals will have up to one year from the date the accelerated payment was made to repay the balance. Other Part A providers and Part B suppliers will have up to 210 days to complete repayments.
Trump disparaged the report at a Monday press availability, where he baselessly suggested it was politically motivated.
The American Hospital Association is defending federal auditors who've drawn the wrath of President Donald Trump for a scathing new report detailing hospital disarray and a slapdash federal response to the coronavirus pandemic.
The Department of Health and Human Services' Office of the Inspector General conducted a telephone survey on March 23-27 of 323 randomly selected hospitals across the nation. The survey found widespread shortages of vital medical equipment and a backlog of COVID-19 testing that was creating a bottleneck in patient throughput.
The report also detailed confusing and conflicting guidance given to hospitals from various federal agencies.
AHA President and CEO Rick Pollack called the OIG's report "important and timely" and said it "accurately captures the crisis that hospitals and health systems, physicians and nurses on the front lines face of not having enough personal protective equipment, medical supplies and equipment in their fight against COVID-19."
"The OIG report also highlights the tremendous strain – both physical and emotional – that this pandemic is putting on the shoulders of heroic physicians, nurses and other caregivers and their families, and why they need our support during this critical time," Pollack said.
Trump disparaged the report at a Monday press availability, where he baselessly suggested it was politically motivated.
"It's just wrong. Did I hear the word 'inspector general,' really? It's wrong," Trump said, adding later, "Well where did he come from, the inspector general? What's his name? So, give me the name of the inspector general. Could politics be entered into that?"
Trump did not provide any evidence to affirm his suggestions that the report was incorrect or politically motivated. HHS OIG is an independent arm of the department, that is led by Christi Grimm, a woman, who has worked for the office since 1999. The auditors who wrote the report have served Republican and Democratic administrations.
He also deflected blame for a shortage of COVID-19 testing kits and the backlog of test results away from the federal response, saying "states are supposed to be doing testing. Hospitals are supposed to be doing testing."
"We're the federal government. We're not supposed to be standing on street corners doing testing," he said. "They go to doctors. They go to hospitals."
Trump continued to disparage the auditors and question the motivation for the report in a tweet on Tueday.
"Why didn’t the I.G., who spent 8 years with the Obama Administration (Did she Report on the failed H1N1 Swine Flu debacle where 17,000 people died?), want to talk to the Admirals, Generals, V.P. & others in charge, before doing her report. Another Fake Dossier!"
Assistant Secretary for Health Adm. Brett Giroir, who attended the Monday briefing, said he doesn’t know the inspector general, but said the auditors should have come forward with their dire findings earlier.
"I'll tell you one thing I have a problem with: If there was such a problem that she knew about or he knew about on March 23 and 24, why did I find out about the test from them on the news media at 8 o'clock this morning," he said. "But that's a discussion for the future."
In defending the auditors, Pollack was careful not to dispute Trump directly, and even praised "certain agencies within the Administration (that) have responded to many of our concerns, particularly CMS, which has cleared regulatory red tape to allow hospitals the flexibility to take quick and decisive action in this rapidly changing situation to better care for patients."
Also Tuesday, without explanation, Trump removed Gerald Fine, a careeer employee, as the federal watchdog over the $2 trillion coronavirus emergency funding package, and named the the EPA inspector general as a temporary replacement.
An inability to quickly diagnose COVID-19 patients in a timely manner meant that hospitals had to assume that all symptomatic patients and staff were infected until results showed otherwise.
A shortage of COVID-19 testing kits, and lengthy waits for test results were identified as root problems that created bottlenecks for the nation's hospitals as the coronavirus pandemic gained momentum late last month, a new federal audit shows.
The scarcity of the tests, and the subsequent wait for results for patients and staff, which often took a week or longer, had a snowball effect on patient throughput, according to a survey and analysis by the Department of Health and Human Services' Office of the Inspector General.
The inability to quickly diagnose COVID-19 patients in a timely manner meant that hospitals had to assume that all symptomatic patients and staff were infected until results showed otherwise.
That delay sideline staff suspected of contracting the virus, who were quarantined; which strained remaining staff; kept patients in acute care hospital beds longer, and delayed transfer to nursing homes or other post-acute care settings until a diagnosis could be verified; directed more scarce resources, such as personal protective equipment, for patients in diagnostic limbo; which also made it harder for hospitals to free up bed capacity in anticipation of a surge in new patients, the survey found.
"Sitting with 60 patients with presumed positives in our hospital isn't healthy for anybody," one administrator told OIG in its March 23-27 telephone survey of 323 randomly selected hospitals across the nation.
"Hospitals reported that their most significant challenges centered on testing and caring for patients with known or suspected COVID-19 and keeping staff safe" OIG said. "Hospitals said that severe shortages of testing supplies and extended waits for test results limited hospitals' ability to monitor the health of patients and staff."
"They also reported that widespread shortages of personal protective equipment (PPE) put staff and patients at risk. In addition, hospitals said that they were not always able to maintain adequate staffing levels or to offer staff adequate support," OIG said.
"Administrators also expressed concern that fear and uncertainty were taking an emotional toll on staff, both professionally and personally," OIG said.
'We are all competing for the same items.'
The hospitals described a mad scramble to acquire testing kits, PPE, no-touch infrared thermometers, ventilators, and other supplies, and often found themselves competing with other hospitals and the general public for the scare resources. "We are all competing for the same items and there are only so many people on the other end of the supply chain," one administrator told auditors.
Hospitals also complained of little coordination or oversight – and sometimes conflicting guidance – from the federal government.
"Hospitals often stated that they were in competition with other providers for limited supplies, and that government intervention and coordination could help reconcile this problem at the national level to provide equitable distribution of supplies throughout the country," OIG said.
Another administrator told OIG that the hospital normally used 200 masks daily, but was now using 2,000 per day. Another hospital administrator said the "fear factor" prompted all staff to wear masks, not just those clinicians treating COVID-19 patients. Another administrator reported that a box of 2,500 N95 masks obtained from a state strategic reserve was unusable because the elastic straps had dry-rotted. Another administrator said that masks that usually cost 50 cents now cost $6 apiece.
When supplies could not be found and staffing shortages threatened care, OIG said hospitals improvised "a range of strategies to maintain or expand their capacity to care for patients and to keep staff safe," including "sometimes un-vetted, and non-traditional sources of supplies and medical equipment."
That included reusing disposable PPE, using homemade or construction face masks, and "jerry-rigging" anesthesia machines as ventilators.
To alleviate clinician shortages, hospitals trained anesthesiologists, hospitalists, and nurses to operate ventilators.
To support staff, hospitals provided childcare, laundry and grocery services, and hotel rooms to promote separation from elderly family members.
To manage patient flow and hospital capacity, some hospitals provided outpatient or telehealth care for patients with less-severe symptoms, and set up alternate care venues at fairgrounds, college dorms, and even empty jails.
On top of all this, hospital administrators reported that the increased costs of care, coupled with the decreased revenues from the postponement of lucrative elective surgeries and other procedures, posed "a threat to their financial viability," OIG said.
The administrators who spoke with OIG frequently expressed concerns about ongoing staffing and equipment shortages if the pandemic stretches into the summer and beyond.
"Unlike a disaster where the surge is over in a matter of days, with this situation we have to prepare for this to last many months," one administrator said. "We have to scale up in equipment and staff, and prepare for this to last a long, long time. This is very challenging for staff."
Since the survey was taken, OIG noted that the federal government has taken steps to address the shortages and concerns raised by hospitals, which includes a $110 billion aid package passed by Congress in late March.
The collaborative was created under a coronavirus emergency response initiative led by FEMA and HHS.
The Department of Justice says it will not launch an antitrust challenge against five medical supply companies collaborating to expedite the manufacturing and delivery of personal protective equipment and other coronavirus-related supplies.
The companies – McKesson Corp., Owens & Minor Inc., Cardinal Health Inc., Medline Industries Inc., and Henry Schein Inc. – are working collaboratively as Medical Supplies Distributors under a coronavirus emergency response initiative from the Federal Emergency Management Agency (FEMA) and the Department of Health and Human Services.
"These Medical Supplies Distributors should be applauded for their efforts to both assist the United States in responding to the COVID-19 pandemic and stay within the bounds of antitrust law," Assistant U.S. Attorney General Makan Delrahim said in a media release.
Medical Supplies Distributors has developed Project Airbridge, which works with FEMA and HHS and logistics companies to expedite and airlift PPE and other supplies and medications to pandemic "hotspots" across the country.
Medical Supplies Distributors submitted their collaborative for DOJ review on March 24. DOJ approved the request on Saturday.
Dentist and physician practices bore the brunt of downturn, reporting a combined 30,000 job losses.
New data released Friday shows that the COVID-19 response has led to massive layoffs in the healthcare sector, as hospitals and other care venues pare back elective and non-emergency services and focus resources to cope with the pandemic.
The healthcare sector, for decades a job-creating machine in the U.S. economy, lost 42,000 jobs in March, according to unemployment figures released today by the Bureau of Labor Statistics.
Among the casualties, ambulatory services lost 33,300 jobs, including 17,000 jobs losses in dentist offices, 12,000 jobs losses physician offices, and 7,000 losses in other care venues.
The nation's hospitals, which created on average 8,500 jobs per month in 2019, created 200 jobs in March.
For decades, the nation's healthcare sector has been a job-creating powerhouse. In 2019, nearly one-in-five jobs created in was in healthcare, and 374,000 jobs for the year – about 33,000 jobs each month –which greatly outpaced nearly every other major sector of the economy, BLS data show.
The 2019 figures include 269,000 new jobs in ambulatory services, up from 219,000 jobs in 2018, and 102,000 new hospital jobs, down from 107,000 new jobs in 2018.
The March employment numbers are considered "preliminary" and could be revised.
More than half (54%) of primary care practices are conducting the majority of their visits by telephone.
Nearly 8 in 10 primary care clinicians say their practice is under "severe" or "close to severe" strain because of COVID-19, with only one-third of respondents to a new poll this week reporting that they have enough cash on hand to last one month.
The combined numbers are in line with a similar polls conducted by PCC and the Green Center last month.
"The quantitative and qualitative results of these surveys are a clarion cry for more health plans to step up and cover telehealth and telephonic visits as Medicare has done," said Ann Greiner, president and CEO of the Primary Care Collaborative.
"Next is to get financial relief to practices that are going under water and to move primary care much more rapidly to adequate prospective payment," she said. "Practices under such arrangements can weather these storms and provide higher-value care."
Among the survey findings:
Telehealth capacity is increasing, with 33% of respondents reporting that their practice had no video visits (down from 60% the week before), while half report no e-visits at their practice (down from 70% the week before).
More than half (54%) of primary care practices are conducting the majority of their visits by telephone.
Nearly a third of respondents work at practices that offer some visits in the parking lot.
Only 33% of clinicians say they have enough cash on hand to function for four weeks. Half answered either "no" (13%) or "unsure" (37%).
More than 20% of respondents said their practice may temporarily close, owing to either "clinician or staff illness," (20% maybe); "lack of PPE/supplies (21% maybe); and "lack of revenue" (16% maybe).
The survey respondents represent a wide range of primary care providers, including family medicine (59%), geriatrics (13%), internal medicine (12%), primary care-based pharmacists and behavioral health (11%), and pediatrics (5%).
About 20% of the respondents work in small practices with three or fewer clinicians, 29% work in community health centers, 33% work in practices owned by an academic medical center, and 20% are self-employed. Nearly one-quarter of the respondents practice in a rural setting, and about half of the clinicians said a majority of their patients are commercially insured.
"This week's survey shows that pressure on front-line clinicians is intense," said Rebecca Etz co-director of The Larry A. Green Center and associate professor of family medicine and population health at Virginia Commonwealth University.
"Practices are mostly holding on now, but in this week's survey, six in 10 clinicians said they were uncertain if their practice will be open a month from now due to the combined pressures of no PPE, clinician and staff illness, and lost income," Etz said.
Lefteris has served as UCI Health's COO since December 2018.
UCI Health's search for a new CEO ended Thursday with the announcement that current COO Chad T. Lefteris has been picked to lead the Orange County-based health system.
His appointment was approved this week by the University of California Board of Regents.
"With the vast spread of COVID-19, this is a pivotal time for healthcare in our state and nation," Lefteris said in a media release." I will prioritize the health of our community and the safety and well-being of our physicians, nurses and staff as we work together to get through this pandemic. It's a privilege to work with all of the outstanding physicians, nurses and staff at UCI Health – they are truly heroes."
Lefteris has served as UCI Health's COO since December 2018. His new post puts him in charge of the entire UCI Health system, which includes UCI Medical Center, an academic medical center, and more than a dozen outpatient research and specialty care venues in Orange and Riverside County.
"After a nationwide search, the search committee identified the ideal candidate within our own ranks," Steve Goldstein, MD, UCO Health's vice chancellor for health affairs, said in a media release.
"Chad brings years of experience and a natural ability to build relationships. I have all the faith and confidence that Chad will lead UCI Health through this COVID-19 crisis. He’s the right person to ensure that our frontline caregivers have the tools and resources they need to continue providing care for our community during these trying times," Goldstein said.
Before joining UCI Health, Lefteris was vice president of operations at UNC REX Healthcare in Chapel Hill, North Carolina.
Lefteris said the continued focus of UCI Health under his tenure will be meeting the needs of the region's patients.
"While we’re at the forefront of providing complex care and cutting-edge research, we also have a prominent role in providing primary and specialty care in all corners of the community," he said.
Editor's note: This story was updated on April 8, 2020.
With hospitals pushed to the breaking point, here are some suggestions to defuse the inevitable stressors that come with the pandemic.
As the nation's healthcare delivery system comes closer to capacity, tempers are bound to flare among patients, clinicians, administrators and other stakeholders.
1. Behavior is Communication. Most communication occurs beyond the words we use. Look for signs of anxiety in body language, tone and cadence. Understand that crisis behavior reflects a need and consider what it is the other person might want.
2. Avoid the Power Struggle. No one can meet every need at every moment. Challenging or exercising authority over a person can escalate negative behaviors. Considering options you can offer allows flexibility to address both parties’ needs and desired outcomes.
3. Use Limit Setting. Behavior can’t be forced but setting limits can help us influence behaviors. Framing acceptable behaviors or outcomes can encourage the other person to choose the most productive option.
4. Practice Rational Detachment. Don’t take behaviors personally. Stay calm. Find a positive way to release the negative energy you absorbed during the conflict. Keep in mind, you can only control your own attitude and actions.
5. Therapeutic Rapport. Learn from the conflict and help the other person learn from the experience. Focus on identifying and preventing the pattern of behavior in the future. Finally, put time and effort into repairing the relationship.
