If a hospital were to be assessed the maximum penalty for an entire year, it would owe $109,500 for failing to comply.
The final rule on hospital price transparency issued Friday by the Centers for Medicare & Medicaid Services allows the agency to impose civil monetary penalties for those that fail to comply, but some proponents of the policy worry these relatively minor fines may be an insufficient enforcement tool.
In other words, the mandate for hospitals to disclose the rates they negotiate with insurers has teeth—but they may be mere baby teeth.
A hospital that fails to comply with the final rule, which is slated to take effect in 2021, faces a maximum fine of $300 per day, even if the hospital is violating multiple requirements of the policy, according to the final rule.
"The technical term for that is 'chump change,' " Kaiser Family Foundation Executive Vice President for Health Policy Larry Levitt wrote in a tweet Friday. "I wonder how many hospitals will just pay the fine."
Although the scope of the final rule has broad implications, this enforcement mechanism "is quite weak," Levitt said.
If a hospital were to be assessed the maximum $300 penalty for an entire year, it would owe the government $109,500 for failing to comply with this final rule during that year. (The amount will be updated annually with a cost-of-living adjustment multiplier, according to the rule.)
In HCCI's comment on the proposed rule—the proposal included the same $300 max daily penalty as does the final version—Brennan praised the rule's monitoring methods and enforcement actions as "appropriately varied and iterative," but he said typical hospitals may see $100,000 as a small piece of their total revenue.
"We worry that many stakeholders will view the noncompliance penalty as a new business expense rather than an incentive to comply with the transparency requirements," Brennan wrote.
For its part, CMS acknowledged in the final rule that stakeholders had expressed concerns about the penalty amount. While some comments on the proposed rule called for higher penalties, others pushed for lower penalties or no penalties at all.
Paying more than $100,000 in fines might be chump change for large hospitals, but such penalties could prove overly burdensome for small hospitals, especially critical access hospitals, some commenters argued, according to the CMS summary of the comments, which noted that some called for a sliding fee scale.
Officials rejected calls for a sliding fee but said they will continue to consider the topic and may revisit a scaling methodology in future rulemaking.
After considering higher and lower dollar amounts, CMS officials settled on the $300 maximum, figuring they had struck an appropriate balance, according to the rule.
"We believe this amount to be sufficient to prompt hospitals to timely and properly display standard charges in both machine-readable and consumer-friendly formats in accordance with the requirements of this final rule," the document states.
Furthermore, the rule's regulatory impact analysis estimates that its provisions will cost each hospital about $11,900 to implement, so the maximum penalty for noncompliance is steeper than the total estimated cost of compliance, the rule states.
Correction: An earlier version of this story stated incorrectly that the maximum penalty for a Leap Year would be $109,500. That sum is the maximum penalty for a non–Leap Year. The maximum penalty for a Leap Year would be $109,800.
UnityPoint Health rejected a potential merger with Sanford Health this week, forcing the CEOs to readjust after touting the expected benefits of a deal they ultimately didn't consummate.
The two of you have been courting for months. The relationship looks promising. You've talked at length about your future together. Then, out of the blue, they tell you they're headed in another direction. It happens.
Moving forward after a potential merger or acquisition partner walks away from the negotiating table isn't easy—you'll have to revise your vision of the road ahead and adjust your strategic communications accordingly—but it's doable.
This uncomfortable position, being rejected after an extensive M&A due diligence process, is precisely where Sanford Health President and CEO Kelby Krabbenhoft finds himself this week. The Sioux Falls, South Dakota–based health system had been in merger talks with UnityPoint Health, based in Des Moines, Iowa, to form an $11 billion enterprise with 76 hospitals. But the two nonprofits announced Tuesday that UnityPoint had backed out.
The news prompted some finger-pointing from Krabbenhoft, who had been expected to serve as president and CEO of the post-merger organization. Krabbenhoft expressed disappointment that UnityPoint's board "failed to embrace the vision."
UnityPoint President and CEO Kevin Vermeer, who had been expected to serve as senior executive vice president of the post-merger organization, said his organization decided it would be better to maintain its existing corporate structure than to move forward with the merger.
"For us to grow as a system, we look for three things: strategic alignment, a strong cultural fit, and the right timing," Vermeer wrote in a staff memo that UnityPoint shared with HealthLeaders. "In this case, we deeply respect Sanford Health, but this specific partnership opportunity did not work out."
"I said this before, and I'll say it again—we are strong with a partner and without one. I truly believe this," Vermeer wrote in his memo.
Krabbenhoft and Vermeer were unavailable to answer additional questions beyond their written statements.
Sanford's Bold Agenda, Deep Pockets
Sanford Health is named after credit card mogul T. Denny Sanford, who has donated hundreds of millions of dollars to the health system.
The philanthropic partnership dates back to the mid-2000s, when Krabbenhoft, the president and CEO of what was then called Sioux Valley Hospitals and Health System, outlined his aggressive vision for medical research and care delivery and sought the billionaire's financial backing, according to the Sanford Health Foundation.
Krabbenhoft has since led Sanford Health through a series of mergers and acquisitions, growing the organization into a 44-hospital system with operations in 26 states and nine countries.
Allan Baumgarten, a consultant and long-term observer of healthcare industry trends in the Midwest, says Krabbenhoft clearly has an ambitious agenda for the health system he leads.
"Sanford has deep pockets, wants to expand, wants to make acquisitions," Baumgarten says. "It's not surprising that you would hear quotes from him saying they didn't share the vision, they weren't as advanced as we are about what the future of healthcare is going to be."
This isn't the first time, though, that Krabbenhoft's vision has been foiled by M&A negotiations coming undone, Baumgarten says, pointing to Sanford Health's failed attempts to acquire each of the two largest health systems in Minnesota's Twin Cities: Allina Health and Fairview Health Services.
Sanford had been in talks with Allina before moving on to Fairview, as Krabbenhoft has acknowledged, according to a 2013 report by the Minneapolis Star Tribune's Jackie Crosby. Sanford then withdrew from M&A negotiations with Fairview amid criticism from some stakeholders and questions from the Minnesota attorney general.
Earlier this year, Sanford closed on its merger with nonprofit senior care provider Evangelical Lutheran Good Samaritan Society, and Sanford abandoned its efforts to acquire Mid Dakota Clinic amid a challenge by the Federal Trade Commission.
Market Boundaries Still Expanding
Even though Sanford's merger talks with UnityPoint ended without a deal, there's still no question in Baumgarten's mind that health systems are increasingly pursuing tie-ups involving non-contiguous service areas—as evidenced by several recently completed mergers, including last year's formation of Advocate Aurora Health in Wisconsin and Illinois and Bon Secours Mercy Health in Ohio and Maryland.
"I think hospital systems are still very interested in expanding their geographic reach, trying to gain market power that cuts across major geographic service areas, trying to focus on areas where there might be a statewide or regional presence of major employers that they could deal with directly," Baumgarten says.
There are, however, other high-profile examples of much-buzzed-about transactions ultimately fizzling.
Identifying precisely which factors contributed to an individual transaction falling through can be difficult, especially from the outside. But past breakups like these have revealed several common themes, including both financial and operational concerns, according to a 2019 HealthLeaders intelligence report that surveyed executives about the reasons they abandoned an M&A plan before or during the due diligence phase.
On the financial side, the top three reasons that respondents cited were assumption of liabilities (23%), regulatory issues (22%), and concerns about risk/revenue sharing (20%). On the operational side, the top three reasons were mistrust between parties (30%), concern about governance (27%), and incompatible cultures (21%).
Post-Breakup Communications: 5 Tips
In most cases, when a deal falls through, the parties say respectful things about each other and indicate a willingness to explore other opportunities in the future, but Krabbenhoft apparently didn't feel obligated to take that kind of approach, Baumgarten says.
The fact that Krabbenhoft publicly expressed disappointment in UnityPoint's board may give other health system CEOs a reason to hesitate if he approaches them to initiate an M&A dialogue because there may be a perception that those who don't let Krabbenhoft have his way will get "smacked around in the newspapers" for it, Baumgarten says.
"I think interpersonal relationships are important," he says. "It's not unlike divorces or engagements that end up being broken up before the wedding takes place. What do you say about the other person? Do you burn bridges? Do you try and make it look like you were the good guy and the other was the bad guy?"
"There is something to be said for a communications strategy that is respectful and cordial and that is all positive, rather than remarks of disdain and disrespect," he adds.
Even if the prospect of your partnership has come to a close, your communications campaign about that partnership is ongoing, as David Jarrard, the CEO of healthcare strategic communications consultancy Jarrard Phillips Cate & Hancock Inc., writes in the HealthLeaders book Healthcare Mergers, Acquisitions, and Partnerships: An Insider's Guide to Communications.
Jarrard's book offers key steps for leaders to keep their strategic communications on point when a potential partnership falls through, including the following:
Be the first to share the news. "The announcement of a deal going south should be as closely managed as the announcement of a potential partnership," Jarrard writes. "It's not a story that will hold for long, though. Develop your message quickly and move. Cascade your message out to key audiences over the course of a few hours, beginning with your high-priority stakeholders. If it does leak, take control quickly. Focus less on finding the leak and more on getting the message fixed and moving forward."
Include a concrete "next step" in your messaging. "It's not enough to announce that the deal is dead. Have a 'so, therefore, we're going to ...' statement that finishes with something tangible, even if that next step is studying options for the next 90 days," Jarrard writes. "It's a signal that your leadership is not fretting but instead is already looking forward to the next milestone that will accomplish the goals you need to be strong."
Explain why the deal failed. "It won't be fun, but the rumor mill will create a story more dire than the real reasons," Jarrard writes. "Remember, you don't have to share or explain confidential details or boardroom politics. That's not really what people want. It is expected, however, that you will share some picture of why the hoped-for marriage didn't occur. Money? Culture? Governance? Regulatory concerns? Moreover, you don't have to attack your former partner to deliver a message that can put the issue to rest so you—and your hospital or healthcare organization—can move on."
If you have to walk away, do it together. "Joint communications ensure that no one is stabbing anyone in the back on the way out the door. Work together on a common message and, just as important, the timing of its delivery. If you don't, neither party will fare well and be able to take the next steps they need," Jarrard writes.
Keep a steady rhythm of ongoing communication. "When the partnership was on, you were writing and speaking multiple times a week on the topic. While you may not be at the same frenetic pace if the deal is off, you still need to communicate. One week, one month, a few months down the road, people will want to know what's next," Jarrard writes. "Even if you have not yet identified the right next solution, tell them that. Sharing a message that contains no new news carries a message that you are in control."
Keep in mind, Jarrard writes, that various stakeholder groups may have differing views on the merger, so don't be surprised if some of them celebrate what the senior leadership team views as a loss.
The parties have until next Friday to submit briefs on whether a preliminary injunction is needed. At issue is whether the state can change its interpretation of CON law standards.
Beaumont Health, based in Royal Oak, Michigan, filed a lawsuit this week against the state in an effort to salvage its plans for a 117-bed hospital in the village of Oxford, about 40 miles north of Detroit.
After the state identified the Oxford area as among six "limited access areas," pursuant to Michigan's Certificate of Need (CON) law, Beaumont filed an application last spring for approval to move forward with its hospital plans. Its prospects seemed promising after Henry Ford Health System's competing application was disqualified.
Beaumont's lawsuit—which was filed Tuesday in the Michigan Court of Claims against the state's CON commission and Department of Health and Human Services, according to court records—alleges, however, that officials changed their interpretation of Michigan's CON standards and said the relevant geographic area must have a population of at least 50,000 residents, as Gongwer News Services reported Tuesday. Officials rejected Beaumont's application because it didn't meet that threshold, the lawsuit alleges.
Beaumont requested a temporary restraining order (TRO) and preliminary injunction to keep the state from issuing new rules related to areas with limited hospital access. Judge Christopher Murray denied the TRO request but gave the parties until next Friday to submit briefs on whether he should issue a preliminary injunction, as Gongwer reported Wednesday.
In a statement released Thursday to HealthLeaders, a Beaumont spokesperson said the health system responded to the state's CON determination and fully intends to see its plans through.
"We remain committed to this project and will continue our efforts to provide health care in Oxford," the statement said. "We have land under agreement and we're eager to serve the community."
"States initially adopted CON laws to further laudable policy goals, including cost control and access to care. The evidence to date, however, suggests that CON laws are frequently costly barriers to entry for healthcare providers rather than successful tools for controlling costs or improving healthcare quality," the administration said in a report last December, noting that the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division had already advised states to curb their CON laws.
A federal law passed in 1974 prompted states to enact CON laws. At one point, every state but Louisiana had done so, according to the National Conference of State Legislatures (NCSL). The federal law was repealed, however, in 1987, and states began modifying or repealing their CON laws as well. But most states still have some form of CON program on the books, according to the NCSL.
The leader who had been in line to helm the post-merger entity said his potential merger partner's board 'failed to embrace the vision.'
There seems to be some finger-pointing between Sanford Health, based in Sioux Falls, South Dakota, and UnityPoint Health, based in Des Moines, Iowa, after talks of a major potential merger between the two Midwestern health systems flatlined.
The two nonprofits had been exploring a plan to combine their operations and form a 76-hospital system with $11 billion in annual revenue and operations across 26 states. When they announced their letter of intent last June, they said the deal would form one of the nation's 15 largest health systems.
But each acknowledged in separate statements Tuesday that their merger would not come to fruition.
Sanford Health President and CEO Kelby Krabbenhoft blamed the leaders of UnityPoint Health for the outcome.
"We were excited at the opportunity our combination would have provided to create a new health system of national prominence," Krabbenhoft said in a statement. "The executive management teams and physicians worked diligently for 18 months to provide a merger recommendation to the boards."
"We are disappointed that the UnityPoint Health board failed to embrace the vision," he said. "Our focus now is on the patients and communities we serve and the 50,000 people working tirelessly to support them."
Krabbenhoft had been expected to serve as president and CEO of the post-merger organization, while UnityPoint Health President and CEO Kevin Vermeer had been expected to serve as senior executive vice president.
Vermeer said UnityPoint decided to walk away from the deal after carefully considering its potential.
"Our organization concluded we can most effectively fulfill our mission by maintaining our existing corporate structure," Vermeer said in a statement released to HealthLeaders. "As a leader in the delivery of value-based care, UnityPoint Health remains strong and competitively positioned for the future."
The statement says UnityPoint has "great respect for Sanford Health and the relationships we've developed."
In a letter to Sanford employees, Krabbenhoft said the parties were each scheduled to vote separately Tuesday on the deal but UnityPoint met a day earlier and voted 13–6 against the merger, as Melanie Evans reported for The Wall Street Journal.
Spokespeople for Sanford and UnityPoint didn't immediately respond Wednesday to questions from HealthLeaders about the timing of UnityPoint's vote.
The government is moving forward with 'the second year of a two-year phase-in,' even though a judge vacated the policy in its first year.
The hospitals that successfully challenged a site-neutral payment policy for 2019 in federal court have asked the judge to enforce her order against the related 2020 policy as well.
U.S. District Judge Rosemary M. Collyer ruled in September that the Centers for Medicare & Medicaid Services exceeded its legal authority when it finalized the controversial policy last year as part of the Outpatient Prospective Payment System (OPPS) final rule for 2019. Collyer vacated the policy and declined the government's request in October to put her decision on hold.
Despite that ruling, earlier this month, CMS issued an OPPS final rule for 2020 that again included a site-neutral payment policy, which reduces reimbursement rates for clinic visits at hospital-owned outpatient provider departments to match the rates paid for clinic visits in physician offices.
The final rule says CMS officials are working to ensure that 2019 clinic visit payments comply with Collyer's decision, and it argues that moving forward with "the second year of the two-year phase-in of the clinic visit policy" in 2020 is appropriate, as CMS considers whether to file an appeal.
But the hospital plaintiffs—i.e., the American Hospital Association, the Association of American Medical Colleges, Mercy Health Muskegon, Olympic Medical Center, and York Hospital—contend the government's stated rationale is bunk.
"To be clear, CMS has not just issued another rule that is unlawful for the same reasons as the 2019 OPPS Final Rule. The agency has reinstatedthe second year of the two-year phase-in that was promulgated—in the agency's own words, 'finalized'—in the now-vacated 2019 OPPS Final Rule," the plaintiffs wrote Monday. "That violates this Court's vacatur order."
The plaintiffs asked Collyer to vacate the relevant portion of the 2020 rule, based on her decision on the 2019 rule.
The government, which opposes the plaintiffs' request, has until November 25 to file a formal response with the court, then the plaintiffs will have until December 5 to file a reply, according to an order Collyer issued Tuesday.
The relevant final rule is slated to take effect January 1, 2020.
Legal arguments aside, the site-neutral payment policy is controversial because hospitals provide expensive services that other outpatient facilities often don't, arguably leaving hospital-owned departments with higher overhead costs.
The healthcare industry praised him as 'an exceptional colleague,' 'a revered leader,' and 'a giant in health care.'
A five-day strike that was planned to begin Monday at more than 100 of Kaiser Permanente's mental health and medical facilities throughout California has been postponed after the sudden death of Chairman and CEO Bernard J. Tyson.
The nonprofit health system, based in Oakland, said Tyson, 60, died unexpectedly Sunday in his sleep. The board of directors immediately named Executive Vice President and Group President Gregory A. Adams as the organization's interim chairman and CEO.
Leaders across the healthcare industry responded to Tyson's death with a flood of praise for his vision, leadership, and accomplishments. Kaiser Permanente board member Edward Pei called Tyson "an exceptional colleague, a passionate leader, and an honorable man." The board of directors for America's Health Insurance Plans (AHIP) called him "a revered leader" who "epitomized what we should all strive to deliver." American Hospital Association President and CEO Rick Pollack called him "a giant in health care" and "a champion for creating a more integrated and coordinated delivery system" while expanding access and coverage.
"He was deeply passionate about the need to focus on wellness and prevention and was a tireless advocate for equitable care," Pollack said. "Whether it was addressing food insecurity or homelessness, he was a thoughtful voice on building a better future for all."
Tyson oversaw a payer-provider organization that has sought innovative solutions to population health problems, including hundreds of millions of dollars of investments in housing initiatives. And he has stuck by the Affordable Care Act insurance markets, even as other payer executives warned of a so-called "death spiral" in 2017, as The Wall Street Journal reported.
"Most CEOs don't leave their corporate offices, change clothes, and have car doors locked as they walk by or women move to the other side of the street hugging their purses as they see me out exercising. Even as a CEO, the black male experience is my reality," Tyson wrote in 2014.
Tyson, who worked three decades in management roles for Kaiser Permanente, was named CEO in 2013 and chairman in 2014. Since then, the organization has grown from 9.1 million members and $53 billion in annual revenue to 12.3 million members and $79.7 billion in revenue last year, as Los Angeles Times business columnist Michael Hiltzik reported.
The organization has been embroiled in labor disputes that challenge its public image, with some critics accusing the nonprofit of behaving more like a for-profit enterprise. Tyson's status as the nation's highest-paid nonprofit health system executive—he earned $16 million in 2017, as Kaiser Health News reported—was a point of contention.
National Union of Healthcare Workers President Sal Rosselli offered his condolences Sunday to Tyson's family, friends, and colleagues, and he announced that the labor union's leaders voted to postpone this week's strike, without scheduling a new date. The demonstration had been expected to include 4,000 psychologists, mental health therapists, and other medical professionals.
"Our members dedicate their lives to helping people through tragedy and trauma, and they understood that a strike would not be appropriate during this period of mourning and reflection," Rosselli said, noting that he'd known Tyson since the early 1980s, when Tyson was a manager at Kaiser Oakland Medical Center.
"While we had our differences, I had tremendous respect for him and his willingness to collaborate with workers to make Kaiser the model provider of medical services in California," Rosselli said. "We weren't able to achieve that same level of collaboration when it comes to Kaiser's mental health services, but I believed that he did want Kaiser to achieve real parity for mental health care, and I know our members remain fully committed to realizing that goal."
The top executive of Grande Ronde Hospital and Clinics hosts monthly breakfasts with community leaders to build rapport and demystify the institution in the public's eyes.
The fact that rural hospitals are especially vulnerable to the healthcare industry's shifting market dynamics is nothing new.
Policymakers have been tracking rural hospital closures for more than 30 years, as the rate of closures slowed in the late 1990s and early 2000s then accelerated again in the past decade, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina–Chapel Hill.
At least 118 rural hospitals have closed since 2010, according to data compiled by the Sheps Center. That includes at least 17 closures thus far in 2019, with more than two months to go before the end of the year.
But, in addition to the financial pressures of the past decade, there could be new competitive pressures on the horizon, as large retailers reach for a piece of the market for lower-acuity healthcare services.
Walmart last month opened a health center prototype in Dallas, Georgia—a city of 13,000 residents in a county of 164,000 residents, according to U.S. Census Bureau estimates—where the superstore will provide primary care, counseling, and other services, with the goal of perfecting a model to replicate elsewhere. The company said it already has plans to open a second site early next year in nearby Calhoun, Georgia, a city with 16,000 residents in a county of about 58,000 residents.
While some have described Walmart's health centers as a potentially positive development for rural health, it remains unclear what impact the retailer's health centers will have on the incumbent provider organizations that currently serve these rural communities.
In the face of that uncertainty, rural healthcare leaders are employing a variety of tactics to reinforce the long-term viability of the organizations they oversee. Some are linking arms with larger systems through mergers and acquisitions. Some are focusing on service lines that will differentiate them from potential competitors. And some are trotting out a tactic that works in concert with any other defensive strategy: consciously building affinity within the local market.
Jeremy P. Davis, MHA, president and CEO of Grande Ronde Hospital and Clinics (GRH) in La Grande, Oregon, said he has been working to deepen his organization's ties to the local community, fostering a sense of loyalty that could come in handy if an outside competitor were to attempt to intermediate GRH's patient relationships.
To that end, Davis has hosted a monthly "key leaders breakfast" for community leaders at GRH's flagship facility, a 25-bed critical access hospital in a county with fewer than 27,000 residents. The event for 15–20 guests has drawn mayors, representatives, fire chiefs, school teachers, business leaders, and others, he said. He usually introduces a physician or two to those who attend.
Davis, who took the helm at GRH late last year after serving as CEO of a critical access hospital in Wyoming, said he launched the monthly breakfast initiative by asking GRH staff to recommend names of people who should attend. That generated a list of 60–70 names. Davis keeps adding to that list by asking each round of participants to recommend future attendees.
More than 110 people have attended the events during the first seven months, beginning last February, Davis said.
The practice helps to demystify the hospital in the mind of community members, to make the institution familiar to those it serves, he said.
"I'm talking about cost, quality, or access, some of the things happening on a national stage," he said during a recent HealthLeaders CEO Exchange gathering.
"Consequently, I'm really promoting the hospital to the community over and over again, so that way when the time does come where we have some threat, I've hopefully built support," he added.
While GRH aims to earn the community's support by offering quality services at affordable prices, Davis said he sees a benefit in consciously planting the seeds of appreciation and rapport in the minds of local leaders.
"If they want our community to be successful, it's that 'buy local' mentality," he said, noting that GRH represents nearly 5% of the local workforce.
Critical access hospitals are often an economic engine for their communities and are sometimes among few large employers, making their partnerships with local stakeholders especially important, according to the National Rural Health Association.
But the need to lead both internally and externally—to win support not only from your employees but from the relevant public as well—exists regardless of whether you're running a small hospital, mid-sized health system, or massive academic medical center with thousands of employees.
The type of affinity-building exercise that Davis has employed at GRH may look different at a larger organization in a more-populous community, but the core principle translates. If policymakers and business leaders view the long-term success and viability of a healthcare organization as aligned and intertwined with that of the broader community, then outside competitors may have a tougher time interloping.
This defensive tactic can't replace the basic responsibility to provide the right care at the right place, time, and price. But investing proactively in community relationships just might help to smooth over a rough patch later on.
The HealthLeaders CEO Exchange annually gathers leading hospital and health system CEOs for a custom dialogue on only the critical issues facing the future of their organizations. The 2019 event was held September 25–27 in Park City, Utah. For more information on this and future events, please email exchange@healthleadersmedia.com.
CMS says the additional time will be used to evaluate stakeholder feedback.
Six months after announcing new value-based payment models to transform primary care, the Centers for Medicare & Medicaid Services released a request for applications (RFA) on Thursday that details how healthcare providers in certain areas and regions can apply to participate in one of the Primary Care First (PCF) model options.
Although CMS had earlier indicated plans to launch the first five-year PCF cohort in January 2020, the RFA indicates that the first round has been delayed a full year, until January 2021.
The Center for Medicare & Medicaid Innovation (CMMI), which manages the agency's experimental payment models, didn't immediately cite a reason for the delay. However, a CMS spokesperson said Friday the extra time would be used to evaluate "internal and external feedback from all stakeholders."
"We are committed to ensuring that the Primary Care First application incorporates this critical feedback in response to the model's announcement in April," the CMS spokesperson said.
"CMS moved the start date to allow stakeholders more time to consider participation, a decision that requires practices to assume risk in exchange for outcomes-based rewards. The delay also helps practices prepare for participation by allowing them additional time to move away from a fee-for-services structure," the spokesperson said.
Some stakeholders have touted the PCF and Direct Contracting (DC) model options that CMS outlined last spring as potentially poised to usher in a new wave of consumer-centric competition that could kickstart value-based care in Medicare and beyond. But they have been waiting for the RFA to assess key details, including how benchmarks will be established and calculated, how risk adjustment will work, and what waivers CMS will allow.
The DC model options are also expected to begin in January 2021, according to the CMS website. An RFA for those models hasn't been released.
The latest ruling opens the door to a possible appeal by the Trump administration, which has argued it has the authority to impose the rate adjustment.
A month after granting hospitals a major victory in their challenge to site-neutral payment provisions of the 2019 Outpatient Prospective Payment System (OPPS) final rule, U.S. District Judge Rosemary M. Collyer issued a follow-up ruling Monday that declined to delay the effects of her decision.
The government had asked Collyer either to modify her order or impose a 60-day stay, but Collyer rejected both of those requests, siding again with the hospitals that brought the suit. Her decision opens the door to a possible appeal.
The American Hospital Association, which worked with several member hospitals and the Association of American Medical Colleges to bring the suit, said Monday's ruling should result in more money for hospitals that had their reimbursement rates reduced as a result of the 2019 policy.
"Now that Judge Collyer has ruled against both the government's motion to reconsider her opinion and the motion for a stay, the AHA expects CMS to comply with today's order and promptly repay the impacted hospitals to support the work they do for the patients they serve," AHA General Counsel Melinda Hatton said in a statement.
The AHA has also acknowledged, however, that an appeal is expected.
When asked by HealthLeaders whether the government will appeal, a spokesperson for the Centers for Medicare & Medicaid Services said the agency is reviewing the decision and declines to comment on maters of pending litigation.
The committee chairman accuses the administration of withholding analyses that show its healthcare policies are expected to result in higher costs and a smaller insured population.
House Energy & Commerce Committee Chairman Frank Pallone, a Democrat from New Jersey, threatened to subpoena two of the government's top healthcare officials over their alleged failure to comply with the committee's requests for documents and information.
Pallone made the threat in a letter last Wednesday to Health and Human Services Secretary Alex Azar and Centers for Medicare & Medicaid Services Administrator Seema Verma, alleging that the Trump administration has moved forward with healthcare policies despite its own analysis showing that those policies would increase healthcare costs and reduce the insured population.
After being asked to give the committee a copy of the CMS Office of the Actuary's (OACT) analysis, HHS said in July that it doesn't have to produce the requested documentation because it "is protected by the deliberative process privilege," according to Pallone's letter, which sought to refute HHS' argument.
"Congress has a constitutional duty to conduct oversight of the Executive Branch, and a longstanding interest in ensuring that the Executive Branch operates in a transparent manner," Pallone wrote. "I am very concerned that despite the analyses by OACT, the Administration appears to be continuing to contemplate destructive policies that could harm families' access to affordable, comprehensive health insurance coverage."
If HHS doesn't provide the relevant documents by October 30, the committee "will be forced to consider" compelling their release, Pallone wrote.
Although there's no question that the Trump administration has sought to unwind the Affordable Care Act through legislation and litigation, officials have repeatedly rejected notions that they are engaged in efforts to "sabotage" the Obama-era law.