The deal threatens to reduce competition for 'tens of millions of consumers across broad swaths of the country,' the hospital lobbying group said.
In a letter to the U.S. Department of Justice released publicly Wednesday, the American Hospital Association urged antitrust regulators to investigate Centene Corp.'s proposed acquisition of WellCare Health Plans.
The AHA said the Centene-WellCare merger could undermine competition in Medicaid Managed Care and Medicare Advantage for "tens of millions of consumers across broad swaths of the country."
The planned acquisition, valued at $17.3 billion, doubles down on Centene's business strategy of growth through government-backed health insurance. Despite renewed chatter of a potential replacement for the Affordable Care Act, Centene CEO Michael Niedorff expressed confidence in the face of what he called mere "headline volatility."
But the AHA letter states that Niedorff has himself acknowledged some anticompetitive effects embedded in the current merger plans as it pertains to two states: Nebraska and Missouri. And the letter argues other states are likely to suffer from the deal as well.
The arrangement is especially troubling since more than 857,000 seniors are enrolled in MA plans operated by Centene and WellCare, the AHA letter states.
"The deal would not only eliminate current competition between them in the MA market, it also would eliminate the possibility of future competition between them," the letter states.
This comes after Centene and WellCare had competed against each other to purchase Aetna's MA plans in 2016, when Aetna had sought to acquire Humana, as Reuters' Carl O'Donnell and Caroline Humer reported at the time. The AHA cited the 2016 example as evidence that Centene and WellCare are competing for some of the same consumers.
"There is no service more important to American consumers than health care, and vigorous competition among health insurance companies is necessary to ensure that consumers receive high quality at affordable rates," the AHA wrote. "The facts show that the We1lCare-Centene transaction is likely to significantly reduce competition and will therefore harm the most vulnerable Americans. DOJ should vigorously review this transaction's effects on current and future competition and take all appropriate measures to protect U.S. consumers."
Spokespeople for Centene and WellCare could not immediately be reached for comment Wednesday.
The four waiver concepts CMS released last fall 'were just the beginning' as the agency seeks to build 'a library of options,' says Administrator Seema Verma.
In a request for information released Wednesday, the Centers for Medicare & Medicaid Services asked states to generate ideas for new ways they could bypass certain provisions of the Affordable Care Act, through so-called "State Relief and Empowerment Waivers."
The nationwide brainstorming session aims to add waiver concepts to the list of four that CMS released last fall after it issued revised guidance governing ACA Section 1332 waivers. Trump administration officials say the move will enable creative problem-solving at the local level, while critics worry the wider waivers could destabilize ACA-compliant markets.
"Ultimately, the goal here is to see states develop new waiver concepts and submit waiver applications that improve their health insurance markets," CMS Administrator Seema Verma wrote in a blog post. "To help states with that process, CMS intends to build a library of options, through more waiver concepts, so that states have additional illustrative ways to take advantage of this new flexibility."
"Indeed, the four waiver concepts we released last fall were just the beginning," Verma added.
The RFI, which CMS released with the U.S. Department of the Treasury, specifically asks for states to include ideas that "incorporate the entire range of waivable requirements allowed under Section 1332," while remaining within the law's guardrails. (Remember: The way the Trump administration has interpreted those statutory guardrails differs from the way the Obama administration interpreted them.)
Only certain parts of the ACA may be waived. The provisions protecting people with preexisting conditions are not among them, as Verma emphasized last week.
The surgeon and professor will work closely with a chief administrative officer to devise strategy as Mayo seeks to double its operations in the region.
Richard J. Gray, MD, will take over this month as CEO of Mayo Clinic in Arizona, the world-renowned nonprofit health system announced Tuesday.
"Like others who have come before him, Dr. Gray is a testament to our long-held tradition of succession in physician leadership," Mayo Clinic board chairperson Samuel Di Piazza said in a statement.
"He is fully committed to the values that Mayo Clinic was built upon and equally inspired by all that Mayo Clinic has yet to be," Di Piazza added.
Gray, a general surgeon and professor with a special focus on breast cancer, will work closely with Chief Administrative Officer Paula Menkosky to devise and execute a strategic vision. The pressure is on, as Mayo Clinic leaders in the Rochester, Minnesota, headquarters look to the region as a venue for significant near-term growth.
"As operations in the Southwest double in size over the next five years, Dr. Gray's experience, skill and strategic vision will be crucial to maintaining Mayo Clinic in Arizona's reputation as a destination medical center for hope and healing," said Mayo Clinic President and CEO Gianrico Farrugia, MD, who was named to his post less than nine months ago.
Gray will succeed Lois Krahn, MD, who has served as interim CEO for Mayo Clinic in Arizona since January, following the retirement of Wyatt Decker, MD.
Two initiatives touted by the Trump administration as beneficial ways to expand access to more-affordable health insurance are facing legal challenges.
After a federal judge blocked key provisions of the Trump administration's association health plans (AHP) rule late last month, saying they were part of an unlawful effort to bypass the Affordable Care Act, the government has filed an appeal to the D.C. Circuit Court.
The administration's effort to defend its rulemaking on AHPs comes as it also defends its rulemaking on short-term limited-duration (STLD) health plans in a separate lawsuit. The two rules were introduced last year as side-by-side prongs in the administration's push to expand access to cheaper insurance despite the ACA—a push that some have warned could undermine the markets established by the Obama-era law.
But proponents of the AHPs rule cheered the administration's move as beneficial for small businesses.
"This appeal is welcomed by associations across the country who have invested their time, money and reputation to launch health plans under the 2018 regulation," said Kev Coleman, president and founder of AssociationHealthPlans.com, in a statement.
"This regulation marked a watershed in health policy inasmuch as it corrected a basic unfairness existing in health coverage costs between small companies and large companies. Prior to the regulation, small businesses faced the prospect of paying more than large companies for the same health benefits," Coleman added. "The new regulation made it easier for small businesses and sole proprietors to band together and access the lower-cost large company health insurance market that already provides coverage to roughly 96 million Americans."
In his ruling late last month, U.S. District Judge John D. Bates in the D.C. District Court said the AHPs rule had unreasonably expanded the legal definition of "employer" and "employee."
Republicans in the House of Representatives have introduced legislation to amend the law to accommodate the effort to expand AHPs.
The lawsuit challenging the AHPs rule was brought last July by New York and 10 other states, plus the District of Columbia. The separate lawsuit challenging the STLD insurance rule was brought last September by seven groups, led by the Association for Community Affiliated Plans (ACAP), also in the D.C. District Court but before U.S. District Judge Richard J. Leon.
In addition to the lawsuit, the STLD rule also faces a potential legislative threat. Democrats in the House of Representatives have introduced legislation to nullify the rule.
That legislation would decrease the deficit by $8.9 billion over 10 years, primarily through lower premium subsidies for nongroup insurance, according to analysis by the Congressional Budget Office.
ACAP CEO Margaret A. Murray said the CBO analysis shows that short-term plans undermine the ACA's existing marketplace. Murray noted also that CBO's score shows that about one-third of the 1.5 million people who would be blocked from a short-term plan would wind up uninsured altogether.
"We can't take that lightly—it highlights the need to take on the challenges surrounding affordability," she said in a statement. "But merely paring back coverage and allowing the most insidious features of the individual market to return—such as exclusions based on pre-existing conditions and the practice of recission—is no solution at all."
The pharmacy chain asked for a narrow hearing on its DOJ-approved purchase of Aetna, as seven witnesses prepare to testify against it.
CVS Health asked the federal judge overseeing its acquisition of Aetna to prevent seven witnesses who lined up to testify against the megamerger from speaking at a hearing next month.
Although antitrust regulators with the U.S. Department of Justice greenlit the CVS-Aetna deal last fall, U.S. District Judge Richard Leon in Washington, D.C., made clear that his review should not be seen as a rubber stamp. Leon said he wanted to hear from witnesses before deciding whether to sign off on the DOJ-approved deal.
The seven witnesses put forward by three groups of amici curiae include health policy professors and economists from major universities, but CVS argued in a court filing Friday that Leon should decline altogether to hold a hearing with live witnesses. The planned testimony, as outlined in court filings, includes irrelevant arguments that could turn the hearing "into a forum for airing competitors' grievances about the CVS-Aetna merger and about the healthcare industry more generally," attorneys for CVS wrote.
The CVS filing argues that the three groups of amici—the AIDS Healthcare Foundation (AHF), the American Medical Association (AMA), and Consumer Action with the U.S. Public Interest Research Group (PIRG)—would be advancing their own competitive interests if the hearing were to proceed.
"Amici's submissions demonstrate that such a hearing is unnecessary in light of the considerable record already before the Court," attorneys for CVS wrote, "and Amici's planned presentations, consisting almost exclusively of unreliable competitor testimony on issues that are not relevant to the Court's Tunney Act determination, will add little, if anything, of value."
In its own filing Monday, the DOJ argued that Leon should limit the testimony to only those items relevant to the scope of Tunney Act review. The DOJ asked the court to strike five of the seven witnesses entirely and limit of the scope of the testimony offered by the other two.
"These limitations will ensure that the hearing remains within the appropriate statutory and constitutional bounds, and will protect the Executive Branch's constitutionally mandated control over its resource-allocation decisions in the enforcement of antitrust laws," DOJ attorneys wrote.
Under the Obama administration, HHS had adopted a $1.5 million cap per calendar year for all violations of an identical HIPAA provision. That's being undone.
Being caught in violation of the Health Insurance Portability and Accountability Act (HIPAA), even if you had no idea you were doing anything wrong, could have in recent years resulted in financial penalties capped at $1.5 million annually per violation type. But not anymore.
Health and Human Services said in a "notification of enforcement discretion" released late Friday that the department will impose lower annual penalty caps for all but the most-severe tier of HIPAA violations. The annual cap for unwitting offenses has dropped by more than $1.4 million.
The change, which is being rolled out on an interim basis pending further rulemaking, rejects the Obama administration's interpretation of penalty provisions in the Health Information Technology for Economic and Clinical Health (HITECH) Act. While the Obama administration had determined that "apparently inconsistent language" in the law's penalty breakdown meant the government could adopt a $1.5 million cap across the board, the Trump administration has determined that "the better reading" of the law would apply lower caps for lower-tier offenses.
There are four tiers of HIPAA violation severity outlined in the HITECH Act, based on the violator's level of culpability:
No knowledge. The person didn't know and wouldn't have known of the violation even if they had exercised reasonability diligence. (Penalty: $100-$50,000 per violation)
Reasonable cause. The person violated HIPAA due to reasonable cause, not willful neglect. (Penalty: $1,000-$50,000 per violation)
Willful neglect, corrected. The person's violation resulted from willful neglect that was corrected in a timely fashion. ($10,000-$50,000 per violation)
Willful neglect, not corrected. The violation resulted from willful neglect and wasn't corrected in a timely fashion. ($50,000 per violation)
Under the Obama administration's interpretation of the HITECH Act's penalty structure, the annual limit for each tier was $1.5 million.
Under the Trump administration's interpretation, the annual limit is $25,000 for tier-one violations, $100,000 for tier-two violations, $250,000 for tier-three violations, and $1.5 million for tier-four violations, according to the HHS notification.
The embrace of mandatory models comes after the Trump administration was regarded in its early months as preferring voluntary models.
Centers for Medicare & Medicaid Services Administrator Seema Verma signaled Thursday that the Trump administration has its eye on rolling out more mandatory payment models.
The administration had been seen as preferring voluntary payment models under former Health and Human Services Secretary Thomas Price, MD, who resigned in 2017 after just seven months on the job. But the tone seems to have shifted under current HHS Secretary Alex Azar, who's been on the job 15 months and has repeatedly voiced support for mandatory models.
Verma mentioned the forthcoming mandatory models in opening remarks to the National Association of Accountable Care Organizations (NAACOS) spring conference in Baltimore.
"Looking forward, you can expect that some of the models we have under development will be mandatory," Verma said in her prepared remarks.
"One reason for mandatory models is that selection effects can be significant in voluntary models," she said. "Selection effects happen when only the providers who would benefit financially from a model choose to participate, thereby reducing the amount of savings that the model can generate."
"Requiring participation also helps us understand the impact of our models on a variety of provider types, so the data resulting from the model will be more broadly representative," she added.
A report released in January by the Government Accountability Office that compared voluntary and mandatory payment models found pros and cons for each type but noted that mandatory options "are more likely to give CMS generalizable evaluation results."
In her speech, Verma addressed the Trump administration's "Pathways to Success" overhaul of Medicare's ACO program—a set of changes that NAACOS and other stakeholders had asked, unsuccessfully, be delayed.
"While concerns were raised that we would see providers drop out of the program under the new parameters, providers are committed to pursuing value," she said, noting that 90% of eligible ACOs with agreements that would have ended at the end of 2018 decided to extend their agreements.
"We are offering a second application cycle this summer to provide ACOs with another opportunity to join the redesigned program," she added.
Verma also said it's encouraging to see so many ACOs taking on additional risk. While only 19% of ACOs are in two-sided risk arrangements right now, 38% of "Pathways to Success" applicants have applied for arrangements that would qualify as advanced alternative payment models (Advanced APMs), she said.
The behavioral health patient allegedly attacked multiple nurses, inflicting injuries that later killed one of them.
A patient charged with manslaughter for allegedly causing the death of a nurse at Baton Rouge General Medical Center in Louisiana two weeks ago has been arrested.
Jessie Guillory, 54, was booked Tuesday in the East Baton Rouge Parish Prison, where he's being held on $100,000 bond, according to local sheriff's office records.
Guillory is accused of an early-April attack that caused the death of nurse Lynne Truxillo, 56, the following week, according to the local coroner, as The Advocatereported.
Truxillo reportedly finished her shift on the day of the attack before being treated and released from the hospital's emergency department. Her death was caused by blood clots in one leg and both lungs stemming from the fight, the coroner said.
The death comes as nurses push for policies to better protect frontline healthcare professionals from workplace violence.
The CMS administrator said states won't be granted ACA waivers for proposals that would undermine access and affordability. Some say her verbal commitment is more stringent than the administration's own written guidance.
As state policymakers explore their options to allow health insurance outside the parameters established by the Affordable Care Act, the head of the Centers for Medicare & Medicaid Services sought Tuesday to clarify the agency's commitment to protecting people with preexisting conditions.
Kansas last week became the third state to allow its Farm Bureau to market non-ACA-compliant health plans, following Tennessee and Iowa, as The Topeka Capital-Journal reported. And regulation of other non-ACA-compliant plans—such as short-term limited-duration options, which are not required to cover people with preexisting conditions—varies widely from state to state, according to the Commonwealth Fund.
Proponents of the ACA have worried that rising popularity of plans that offer skimpier coverage than the minimum essential benefits outlined in the Obama-era law would prompt healthy consumers to leave the ACA-compliant market, resulting in higher premiums for those left behind. That concern was magnified last fall when the Trump administration overhauled ACA waivers in a way that would let states divert federal subsidies from ACA-compliant plans to short-term alternatives.
CMS Administrator Seema Verma acknowledged in November that states could propose to use federal subsidies to cover short-term limited-duration plans. But the agency would evaluate each waiver proposal against the four guardrails outlined in the law, she said.
Verma reiterated and sought to clarify that commitment Tuesday at a forum CMS hosted in Washington, D.C., with various stakeholders in the ACA's Section 1332 waivers, which the Trump administration has rebranded as "State Relief and Empowerment Waivers." The administration released new guidance governing the waivers in October, followed by four waiver concepts in November.
"Some have criticized the new guidance and waiver concepts because they claim that there's an opportunity for states to adopt waivers that undermine the individual market risk pool and, as a result, would make the market more expensive for people with preexisting conditions," Verma said Tuesday. "Critics claim that giving states the opportunity to offer new options to purchase health plans outside the individual market—such as short-term limited duration plans—could pull healthier people out of the market and undermine coverage available to people with preexisting conditions who remain in the market. Again, I want to make clear that a waiver cannot undermine coverage for people with preexisting conditions."
While the guidance gives states more flexibility, it does not abolish the statutory guardrails, so "any state waiver will need to carefully account for any impact on the individual market risk pool and guarantee that people with preexisting conditions continue to have access to coverage that is at least as comprehensive and as affordable as it is today," Verma said.
"So if a state is to allow subsidies to be used for short-term plans, they must have a solution for how to continue to guarantee access to the same level of affordability and comprehensiveness for those who remain in the individual market," she said.
"To be very clear, the new guidance does nothing to change the ACA's preexisting condition protections," Verma said. "The protections cannot be waived, and a waiver cannot be approved that might otherwise undermine these protections. And, regardless, this administration stands committed to protecting people with preexisting conditions."
Trump administration officials have voiced support for preexisting condition protections, but they have also asked federal courts to invalidate the ACA in its entirety. Republicans on Capitol Hill have proffered legislative proposals of their own to add preexisting condition protections outside the ACA, but those proposals have generally offered less protection than the ACA, as The New York Times' Robert Pear reported last week.
Matthew Fiedler, PhD, a fellow with the Brookings Institution Center for Health Policy who served as chief economist of the Council of Economic Advisers during the Obama administration, said he's puzzled by Verma's comments. The administration could have made such a commitment in writing when it revised the waiver guidance last fall, he said.
"But the guidance pointedly did not include such a standard," Fiedler told HealthLeaders in an email. "The disconnect between Verma's speech and the Administration's formal guidance leaves me a bit confused about how the Administration will judge waivers in practice."
The proposal aims to solve a disparity that CMS says can create 'a downard spiral' for low wage index hospitals. That means a decrease for high-wage index hospitals.
The Centers for Medicare & Medicaid Services announced Tuesday afternoon a proposal to increase the inpatient hospital wage index for low-wage index hospitals, with the goal of supporting quality healthcare in rural areas.
The change was announced as part of the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) proposed rule for fiscal year 2020, which begins in less than six months.
"This would have a huge impact on rural communities that have been forgotten by previous administrations," CMS Administrator Seema Verma said during a call with reporters.
"One in five Americans are living in rural areas and the hospitals that serve them are the backbone of our nation's healthcare system," Verma said in a statement. "Rural Americans face many obstacles as the result of our fragmented healthcare system, including living in communities with disproportionally higher poverty rates, more chronic conditions, and more uninsured or underinsured individuals."
"The Trump administration is committed to addressing inequities in health care, which is why we are proposing historic Medicare payment changes that will help bring stability to rural hospitals and improve patients’ access to quality healthcare," Verma added.
Since low wage hospitals typically can't afford to pay their staffs as much as high wage hospitals pay, these low wage facilities are often caught in "a downward spiral" that exacerbates the gap between high and low wage index hospitals, CMS said. The agency invited comments and suggestions in last year's IPPS rule and said many of those comments cited concerns about disparities related to the existing wage index system.
Under the proposal, hospitals with a wage index below the 25th percentile would see an increase, while hospitals with a wage index above the 75th percentile would see a decrease, according to a CMS fact sheet.
Decreases would be capped at 5% for fiscal year 2020 to mitigate their impact, according to the agency.
The proposal would also affect the so-called "rural floor" calculation, which requires that the IPPS wage index value for urban hospitals be no lower than the value for rural hospitals in the same state.
"It appears that hospitals in a limited number of states have used urban to rural hospital reclassifications to inappropriately influence the rural floor wage index value. To address this, CMS proposes removing urban to rural hospital reclassifications from the calculation of the rural floor wage index value beginning in FY 2020," the agency said in its fact sheet.
Verma mentioned on the call with reporters that some urban hospitals seem to be "gaming the system" through these reclassifications.
No Major Price Transparency Items
Last year's IPPS proposals made news for their price transparency provisions, requiring hospitals to publish their chargemasters online in a machine-readable format. But the IPPS proposed rule for fiscal year 2020 doesn't contain any major price transparency proposals, such as an enforcement mechanism for last year's new provisions.
That's not to say, however, that CMS is backing down from its push for more transparency. There are still more payment rules to come for fiscal year 2020, so stakeholders should "stay tuned," Verma said.
