Last Wednesday, FTI released its year-end 2023 summary of insurer-hospital disputes: it reported a 69% increase from 2022 in conflicts where formal negotiations broke down reached based on media coverage in 34 states. The majority of the 86 instances involved Medicare Advantage coverage or reimbursement issues and referral relationships with doctors and hospitals were disrupted, at least temporarily.
Yesterday, Jarrard, a Nashville-based communications consultancy, released results of its December 2023 survey about the public’s views of hospitals and health insurers: Its findings suggest that hospitals are more favorably positioned in than health insurers on most issues but neither enjoys a strong majority support and both have seen their support erode since 2022: For example:
| Health Insurers
|
Hospitals
|
|
| “Mostly focused on caring for patients or mostly focused on making money”: | 23% Agree/77%Disagree December ‘23 vs. 30% Agree/70% Disagree December ‘22 | 31% Agree/39% Disagree December 23 vs. % 47 Agree/53% Disagree December 2022 |
| “How much do you trust each of the following when it comes to developing healthcare policy and laws and the right kind of solutions to improve healthcare?” From 10 options: | Health insurance companies #8 (34%) | Hospitals #3 (51%) behind nurses (84%) and doctors (76%) |
| “Which two of the following would you say are most responsible for rising healthcare costs in the United States?” From 10 options: | Insurance companies #1 (47%) with drug companies #2 (41%) | Hospitals #5 (13%) |
Additional findings in Polling Section below
The ascendancy of insurer-hospital disputes is now a staple of U.S of healthcare. It accompanies the well-documented erosion of trust and confidence in the “health system” and the major institutions that play key roles in shaping its future (Congress, the Supreme Court, CDC, the Big Business et al). Notably, the Jarrard data also showed widespread lack of awareness about hospital ownership distinctions and lack of consensus about possible solutions to health system issues across the board.
My take:
At this stage in the health system, insurers and hospitals have much in common:
- Each is composed of multiple cohorts that range from small publicly funded operators to multinational enterprises.
- Each is represented by powerful trade groups that lobby quite effectively on their behalf at state and federal levels. (AHIP.org, www.AHA.org)
- Each believes its role vital to an orderly private health system: insurers thru plan design, provider credentialling, negotiations and payments for providers, quality measurement, member education; hospitals facilities, technologies and professional services in local communities.
- Each is a frequent target of unflattering media attention about business practices: for insurers, coverage and denial policies, premium prices, out-of-pocket obligations in plans, prior authorization, et al and for hospitals, executive compensation, prices, patient debt collection et al.
- Each is a target of FTC and DOJ efforts to tighten consolidation requirements and protect consumers.
- Each is dominated by large multi-market operators for whom diversification and growth are core business strategies.
- And each thinks the system’s escalating cost issue is manageable, especially if the perceived flaws of the other are corrected first.
But the public’s not sure.
In the November 2023 Keckley Poll, we asked 817 survey participants “Asked “How much trust and confidence do you have in … to develop a plan for the U.S. health system that maximizes what it has done well and corrects its major flaws? Notably, physicians get the nod over hospitals, insurers and others, but it is the public’s lack of confidence in ANY of the five that’s most telling:
| $ A great deal | % Some | % Not Much/None | |
| Insurance Companies | 18.4 | 43.2 | 38.4 |
| Hospitals | 27.4 | 51.9 | 20.7 |
| Physicians | 32.5 | 52.9 | 13.6 |
| Federal Government | 14.2 | 42.4 | 43.5 |
| National Retail Health Co.’s | 21.3 | 50.9 | 27.8 |
These data confirm a public view that’s skeptical about the bona fides of hospitals and insurers to solve the system’s widely known problems. While each of the 5 institutions (above) asserts its unique role and value proposition, none stands out for its differentiated commitment to the greater good.
The challenges facing the health system—accessibility, affordability, effectiveness– cut across every sector. They’ll not be solved by one acting alone. And sacred cows protected by both will need to be slaughtered to create the better new normal desired by a significant majority of taxpayers and elected officials.
Thus, in 2024, the holy war between health insurers and hospitals will intensify as the economy stabilizes and each builds-out its solutions for near-term revenue growth and risk-mitigation. There will be moments of aligned interest like last week’s welcomed final rule for prior authorization which benefits both, but they’re rare. The norm will be the blame game between insurers and hospitals as bigger and better financed in their ranks will survive while others falter.
But the long-term destiny of the entire system will not be defined by hospitals and insurers acting alone. That simply assures the Holy War will intensify and each will stoke animosity toward the other with fervor until and unless leaders in each sector decide to white-board a fresh start together. I am optimistic!
Paul
P.S. With Ron Desantis out of the GOP primary field, the Trump-Haley race is unlikely to surface major differences in health policies either would advance if elected. Both agree in principle on abortion rights through state oversight and both promise constraints on the “administrative state” i.e. agencies of government that issue orders and set rules though unelected—like CMS, CDC, and many others in healthcare. Stay tuned.
Resources
End of Year Update: Payer-Provider Disputes in the Public Eye in 2023 – FTI Strategic Communications (fticommunications.com) January 16, 2024
2024 NATIONAL CONSUMER SURVEY SERIES: ISSUES & ADVOCACY Jarrard Inc. www.jarrard.inc
The Keckley Report www.paulkeckley.com
Polling
Jarrard Polling: Results from Jarrard’s latest poll of 1670 adults who completed its online survey Dec. 18-Dec 28, 2023:
Attitudes about the system:
- “Healthcare in the U.S. offers good value for the cost”: 21% agree vs. 58% who disagree
- “The U.S. healthcare system provides equitable care for all”: 22% agree vs. 57% disagree
- “How much do you trust each of the following when it comes to developing healthcare policy and laws and the right kind of solutions to improve healthcare?” Hospitals (51%) #3 behind nurses (84%) and doctors (76%) vs. health insurance companies (34%)
- “Which two of the following would you say are most responsible for rising healthcare costs in the United States?” Of 10 options, insurance companies #1 (47%) vs. hospitals #5 (13%)
Attitudes about hospitals:
- “I support elected officials in their efforts to increase regulation of hospitals and health system.” 64% agree vs. 36% who disagree
- “Hospitals in the U.S. provide substantial community benefit”:41% all hospitals vs. 62% “my preferred hospital”
- “Hospitals in the U.S. do not provide enough community benefit: all hospitals.” 59% agree for all hospitals vs. 38% “My preferred hospital”
- “Consolidation between hospitals and health systems is good for healthcare in the United States” 54% agree vs. 46% who think it harmful
- “As long as the care hospitals provide is good, it doesn’t bother me if they (hospitals) try to make money”: 49% agree vs. 44% who disagree. Note: strongly agree is 21% vs. strongly disagree is 22%.
- “As far as you know, is your preferred hospital nonprofit or for-profit?” 16% non-profit, 42% for-profit and 42% unsure.
Attitudes about insurers:
- “Generally speaking, do you believe health insurance companies are meeting the needs of most Americans?” 43% in 12/22 vs. 35% in 12/23
2024 NATIONAL CONSUMER SURVEY SERIES: ISSUES & ADVOCACY Jarrard Inc. www.jarrard.inc
Quotables: Reactions to CMS ’Prior Authorization Final Rule
Re: CMS prior authorization final rule reaction by AHA: “While prior authorization can be a tool to help ensure patients receive coverage for their care, too often the practice has been misused by these large commercial insurers to impose bureaucratic obstacles and create mountains of paperwork and red tape for providers, often jeopardizing patient health in the process.
Addressing abuses of prior authorization has been a top AHA priority…We’re pleased to report that CMS has listened and acted. The agency this week issued a final rule requiring MA, Medicaid, Children’s Health Insurance Program and federally facilitated Marketplace plans to streamline their prior authorization processes to improve timely access to care for patients and alleviate provider administrative burden…
We appreciate the progress on this issue, and the AHA continues to engage policymakers to increase oversight of the MA program overall to improve how coverage works for MA enrollees…”
Rick Pollack” Protecting Patient Care with Enhanced Medicare Advantage Oversight and Prior Authorization Changes” AHA Today January 19, 2024 www.aha.org
Re: AHIP reaction to prior authorization final rule: “It’s crucial that we all work towards ensuring patients have access to the information they need to make informed healthcare decisions. CMS took a step in the right direction by finalizing the Interoperability and Prior Authorization rule…
We appreciate CMS’ announcement of enforcement discretion that will permit plans to use one standard, rather tarn mixing and matching, to reduce costs and speed implementation. However, we must remember that the CMS rule is only half the picture; the Office of the Coordinator for Health Information Technology should swiftly require vendors to build electronic prior authorization capabilities into the electronic health record so that providers can do their part, or plans will build a bridge to nowhere.”
AHIP www.ahip.org
Re: interoperability effort status: “In 2016, the 21st Century Cures Act required that the U.S. make progress toward interoperability, which it defined as “all electronically accessible health information” to be accessed, exchanged and used “without special effort on the part of the user.”
In December, seven years after the passage of the bill, the Department of Health and Human Services finalized a rule that will penalize providers for blocking access to electronic health information.
But instead of accomplishing what the 21st Century Cures Act attempted to do, the rule misses the mark. It defines interoperability as access to a U.S. Core Data for Interoperability (USCDI v3). On Wednesday the Centers for Medicare and Medicaid Services issued its interoperability standards as part of its prior authorization rule issued using Health Level 7 for transfer of data between providers.
That data does not include the full patient record, excluding information such as the use of non-medication substances, food allergies, physical activity assessments, notes on medication instructions, and other items.
To mandate access to only a limited set of data is to fail to take advantage of available information that could dramatically improve health and health outcomes while protecting privacy and reducing unnecessary health care costs. The sharing of health information is binary — you either share it or you do not. The bits-and-pieces approach to information sharing distorts rather than enhances the clinical interaction.”
Why is the U.S. still so far behind on health data interoperability? – STAT (statnews.com) January 18, 2024
Re: prior auth final rule and role of CMS: “If CMS is not allowed to use its expertise to create specific instructions using only the very general Congressional directive in the 21st Century Cures Act about how patients should get access to their own health data, then we may not be able to modernize much. Indeed, during oral arguments this week, U.S. Supreme Court Justice Elena Kagan wondered how Congress could possibly legislate something like artificial intelligence with any specificity – naturally leaving the regulatory experts to pick up where legislative language must leave off. If the High Court decides to eviscerate this regulatory authority.”
Only What Matters on Health Information Policy (mailchi.mp) January 19, 2024
Quotables: Industry Voices
Re: NIH focus under new leader: “One of the things I would really like to champion as director is that notion that we do more together to start focusing on some of the fundamental causes of disease across all institutes: inflammation, metabolic syndrome, immune system dysfunction… to have all hands-on deck, really tackling their root causes,”
NIH director takes cautious approach to Biden drug pricing priority (statnews.com) January 16, 2024
Re: news coverage: “We need to recapture some of the swagger and innovation of the early CNN. It’s time for a new revolution.
There’s news of a fair amount of change at CNN in this memo, and no doubt more in the coming months. Change is essential if we’re to secure this great news company’s future. It brings uncertainty — that I’m afraid is inevitable — but in my experience, it’s also often rich in personal and shared opportunity. As we enter this new chapter in CNN’s storied history, I’d encourage you to take a leaf out of Ted Turner’s book. Let’s build with confidence. Let’s fulfill our mission. Let’s learn some new tricks. Let’s look after each other. Let’s have some fun.”
Mark Thompson New Vision for CNN Includes Digital, TV Cuts – The Hollywood Reporter January 17, 2024
Re: hospital bad debt: “…As much as 31% of the cost of US healthcare is probably driven by the administration of complex bills that now beset the public. A recent investigation by KFF Health News and NPR found more than 100 million Americans have medical debt of some kind. In part, those sacrifices are driven by hospitals’ extraordinary collection practices…and health plans designed by insurers which force hospitals to become debt collectors.”
Federal regulations allow insurers on state exchanges to charge an individual as much as $9,450 out of pocket in 2024 – not including monthly payments called premiums. That limit is predicted to grow to $14,100 by 2030. And because healthcare costs are rising faster than wages, those expenses are predicted to eat up an ever-larger share of Americans’ paychecks Further, patient advocates criticize bad debt as a metric in its own right. Hospitals view bad debt as bills patients could pay but choose not to. But hospitals rarely screen patients for their ability to pay, and a raft of evidence shows patients who experience medical debt are often low-income and would probably qualify for discounted or free care if they went through hospitals’ lengthy application process.”
Majority of debtors to US hospitals now people with health insurance | US healthcare | The Guardian January 8, 2024
Re: investigation of potential Dana Farber research misconduct:” Scientists at Dana-Farber Cancer Institute, one of the nation’s leading cancer research and treatment centers, are “moving to” retract one paper and correct others amid an expanding investigation of data manipulation…Dana-Farber officials disclosed that the review process began for some studies more than a year ago…The institute’s existing review has expanded and gained fresh urgency after a scientific sleuth, Sholto David, began poring through papers co-authored by Dana-Farber researchers in December. He claims to have spotted problems with figures in 57 papers, many of them widely cited, whose authors include four of the Harvard-affiliated institute’s top scientists, including Glimcher, Hahn, Irene Ghobrial, and Kenneth Anderson…
The advent of AI image analysis and forums like PubPeer now mean that it’s possible for virtually anyone to look up any researcher’s past work, spot a questionable figure, and post that concern online. There are early signs that this increased scrutiny is prompting academic institutes to try to detect errors before they are published.”
Dana-Farber researchers moving to retract paper in investigation (statnews.com) January 19, 2024
Re: Chevron review by SCOTUS: “Now that abortion is restricted and affirmative action is hobbled, the conservative legal movement has set its sights on a third precedent: Chevron v. Natural Resources Defense Council.
The 1984 decision, one of the most cited in American law but largely unknown to the public, bolstered the power of executive agencies that regulate the environment, the marketplace, the work force, the airwaves and countless other aspects of modern life. Overturning it has been a key goal of the right and is part of a project to demolish the “administrative state.”
A decision rejecting Chevron would threaten regulations covering — just for starters — health care, consumer safety, government benefit programs and climate change.
After three and a half hours of lively arguments on Wednesday that appeared to divide the justices along the usual lines, it seemed that the court’s conservative majority was prepared to limit or even eliminate the precedent.”
The Morning: A landmark case – pkeckley@paulkeckley.com – PaulKeckley.com Mail (google.com) January 18, 2024
Re: market segmentation: “While no single psychographic profile dominates the American population, the dominant profiles are Willful Endurers and Self Achievers. Willful Endurers and Self Achievers comprise 31.0% and 23.3% of American consumers, respectively, followed by Balance Seekers (18.5%), Direction Takers (17.6%) and Priority Jugglers (9.6%). In recent years, the national psychographic distribution has shifted, with Willful Endurers consistently representing the largest share of Americans, but increasing in share from 2021 to 2023. Notably, the proportion of Priority Jugglers shrank the most from 2021 to 2023. Typically, the secondary profile for Priority Juggler is Willful Endurer, suggesting that a small yet meaningful percentage of Priority Jugglers are more influenced by their secondary profile.”
Trilliant Health Compass January 14, 2024 https://www.trillianthealth.com/insights/the-compass
Re: medical group deterioration: “The failure of the elite multispecialty medical groups, which practiced value-based care long before it became a policy touchstone, is an indictment of federal physician payment policy. A possible policy justification for holding Medicare’s fee schedule underwater for the past decade was to make fee-for-service medicine less attractive vs. “value-based care” and to set the stage for the end of fee-for-service Medicare payment. Organizations like Geisinger and Virginia Mason, whose core values favored conservative medical practice, were the losers — and they paid with the loss of their independence. The policy community has loudly decried the corporatization of physician practice, ignoring the catalytic role of physician payment policies it has supported. The slow strangulation of the Part B Medicare fee schedule has been the root cause of the demise of these important groups…
These elite multispecialty groups have not disappeared from the scene. But they are no longer governed by the clinicians themselves, and what their new owners will do with their proud heritage of clinical excellence remains to be seen.”
Multispecialty medical groups are rapidly losing their independence – STAT (statnews.com) January 17, 2024
Hospitals
Study: diagnostic error in hospitals: Researchers analyzed records of 2428 hospitalized adults transferred to the ICU or who died in the hospital. Findings:
“A missed or delayed diagnosis took place in 23%, with 17% of these errors causing temporary or permanent harm to patients. The underlying diagnostic process problems with greatest effect sizes associated with diagnostic errors, and which might be an initial focus for safety improvement efforts, were faults in testing and clinical assessment…Problems with choosing and interpreting tests and the processes involved with clinician assessment are high-priority areas for improvement efforts.”
Study: classifying hospital bad debt: “Crowe research has found that self-pay-after-insurance patients (the deductible amount and/ or the residual amount due from the patient after insurance payment) represented nearly 60% of patient bad debt in 2021, a five-fold increase in just three years. This metric has been on the rise since HDHPs have proliferated in the market, and 2021 marked the first-time self-pay-after insurance accounts were the leading source of bad debt for hospitals….
- Bad debt attributable to self-pay after insurance accounts: 11.1% in 2018 vs. 57.6% in 2021
- Bad debt accounts with balances of more than $7,500: 5.2% in 2018 vs. 17.7% in 2021
- Bad debt accounts with balances of more than $14,000: 4.4% in 2018 vs. 16.8% in 2021
- Self-pay after insurance collection rate: 76% in 2020 vs. 54.8% in 2021
Crowe hospital-collection-rates-for-self-pay-patient-accounts-report-chc2305-001a.pdf (crowe.com) August 2202
General Catalyst-HATCo announce Summa acquisition: Last week, General Catalyst announced its plan to buy Akron, Ohio-based nonprofit health system Summa Health and convert it to a for-profit “tech enabled delivery platform at scale across all points of care.” Summa — a $2 billion integrated delivery system that spans emergency, acute, critical, outpatient, and home care services — will become a wholly-owned subsidiary of General Catalyst (GC) via its new company, HATCo, pending regulatory approval.
Why General Catalyst says Summa Health purchase isn’t ‘another private equity deal’ | Becker’s (beckershospitalreview.com)January 18, 2024
Bloomberg: hospital debt issuance approaching pre-pandemic level: A new Bloomberg analysis this week shows a four-fold increase in the value of municipal bonds tapped by hospitals, with more than $1.7 billion raised for capital improvements, compared with the $391 million issued in January 2023.
Hospitals Are Back to the Municipal-Bond Market as Labor Costs Ease – Bloomberg January 12, 2024
Watchdog report: private equity ownership of hospitals: Watchdog Private Equity Stakeholder Project, which is sponsored by the American Federation of Teachers and the International Association of Machinists and Aerospace Workers, released a report last week focused on Lifepoint Health and Scion Health’s ownership by Apollo Global Management.
“Lifepoint and Scion Health hospitals tend to score lower than other facilities on quality metrics and ratings of patient safety. Last year, a group of 55 Apollo-owned hospitals earned an average star rating of 2.71 from the Centers for Medicare and Medicaid Services, compared with the national average of 3.16 stars. Among Apollo-owned facilities, 45% received “C” safety grades from the Leapfrog Group in November, and 12% got “D” grades. Of all hospitals graded by Leapfrog, 39% received “C’s” and 7% received “D’s.”
Private equity ownership report aims to hold buyers accountable | Modern Healthcare January 16, 2024
Epic announces platform enhancements: Epic announced platform changes to facilitate vendor integration: Connection Hub, Toolbox and Workshop (which replaces the “Partners” and “Pals” designation for vendors).
Epic launches app market overhaul | Modern Healthcare January 17, 2024
Kaufman Hall: 2023 hospital M&A recap: The total number of announced transactions in 2023 with 65 announced transactions in 2023 (including 16 in 4Q2023) compared to 53 in 2022.
- The increase in the percentage of announced transactions that involved a financially distressed partner increased from 15% in 2022 to 28% in 2023.
- While below the historic high of 2022, the average size of the smaller party by annual revenue in 2023 remained high at $591 million, comparable to the $619 million recorded in 2021. For the last three years (2021, 2022, and 2023), average size of the smaller party has significantly outpaced figures from the preceding nine (2012 – 2020).
- Total transacted revenue of $38.4 billion also remained high by historical standards (Figure 7).
- Organizations with an A- credit rating or higher remained consistent with the last four years, with over 12% of selling organizations maintaining at least an A- rating (Figure 8).
2023 Hospital and Health System M&A in Review | Kaufman Hall January 18, 2024
FTI report: payer-provider disputes: “Over two years, our research has found a steady increase in media coverage of payer-provider rate negotiations, with significant year-over-year increases from 2022 to 2023. Notably, as we have previously reported, Medicare Advantage (MA) has increasingly been at the center of contract disputes between payers and providers in 2023 with some health systems choosing to terminate all contracts with MA plans.” Findings:
- In 2023, at least 86 disputes in 34 states were covered in the media, compared to 51 in 24 states in 2022, or a 69% increase in the volume of disputes.
- In 2023, 44% of public disputes failed to reach an agreement, and patients/members went out of network. In 2022, 45% of disputes did not reach a timely agreement.
- Among the 86 disputes that went public in 2023, 59%, or 51, involved Medicare Advantage contracts. Twelve disputes were exclusively about MA plans. In 2022, 29 of 51 public disputes, or 56%, involved Medicare Advantage contracts, with eight disputes exclusively involving MA plans
End of Year Update: Payer-Provider Disputes in the Public Eye in 2023 – FTI Strategic Communications (fticommunications.com) January 16, 2024
Economy
S&P hits all time high: Friday, the S&P 500 closed at 4839.81–1% higher than the previous record of 4796.56 reached on Jan. 3, 2022. Since the recent low (October 12, 2022), the market is up 35% as anxieties about a recession, inflation and interest rate hikes by the fed have decreased.
The S&P 500 just closed at a new all-time high (axios.com) January 19, 2024
ERI Report: Compensation growth 2023: Per the Economic Research Institute’s National Compensation Forecast (January 2024):
- Actual compensation movement in the fourth quarter of 2023 saw a moderate level of growth at 1.09%, above October’s 0.94% and below July’s rate of 1.17% growth. The past 4 quarters have seen higher-than-average growth, with a 4.12% growth rate– lower than the year-over-year (YOY) rate of growth reported last quarter at 4.46%.
- Salary growth 2013-2023 by industry: Professional (+30%), Healthcare (+29.7%), Top Management (+23.3%)
- The mean salary in healthcare was $136,251—up 3.2% 2022-2023 and up 3.3% 2020-2023.
National_Compensation_Forecast_January_2024.pdf
Survey: healthcare workers: Qualtrics’” Healthcare Experience Trends Report” for 2023 is based on 3,000 healthcare workers across 27 countries. Findings:
- 52% of healthcare employees indicated they feel fairly paid for the work they do
- 38% of healthcare workers reported they feel their pay is clearly linked to their performance.
- 61% of healthcare workers reported they intend to stay in their job, a decrease of 4% compared to last year’s respondents.
- 39% of healthcare workers indicated they are considering leaving their current organization, a decrease of 4% compared to 2022.
Healthcare Experience Management | Qualtrics January 17, 2024
Health Insurance
CMS: marketplace enrollment: “. .over 20 million Americans have signed up for 2024 individual market health insurance coverage through the Marketplaces… this includes 15.5 million Marketplace plan selections in the 32 states using the HealthCare.gov platform for the 2024 plan year and 4.8 million plan selections in the 18 states and DC with state-based Marketplaces (SBMs)…Total nationwide plan selections include 3.7 million consumers (18% of total) who are new to the Marketplaces for 2024, and 16.6 million consumers (82% of total) who had active 2023 coverage and selected a plan for 2024 coverage or were automatically re-enrolled. “
AMA study: Payer Market Concentration, 2022: Across all product lines, 73% of metropolitan statistical areas were highly concentrated in 2022:
- In 90% of regions, a single payer owns a 30% market share.
- In 48% of markets, one payer controls at least 50% of the share.
- In 11% of markets, a single insurer has a 70% or higher market share.
AMA, Competition in Health Insurance: A Comprehensive Study of U.S. Markets, December 2023
Study: MA sponsor risk coding: “We analyze the equity and efficiency effects of three potential changes to the CMS Hierarchical Condition Category (HCC) payment system for Medicare Advantage (MA): excluding the diagnostic groups that contribute the most to differential measured MA and FFS risk; excluding diagnoses from chart reviews; and excluding diagnoses from home-based health risk assessments. Results:
- We find that V28 will have a substantial effect on MA payment: if it had been fully implemented in 2021, relative MA risk would have been reduced from 119.5% of FFS using the pre-V28 system to 111.7% using V28. However, even using V28, measured MA relative risk would still have been 11.7% higher than FFS in 2021, relative MA risk would have increased approximately 1.6% per year from 2017-2021, and the average risk score for the decile of contracts that code most intensely would have been 0.33 higher than for the decile that codes least intensely…
- We also demonstrate large differences among MA sponsors in coding intensity. Among the five largest sponsors, United stands out as coding much more intensely than average, and Kaiser as coding much less intensely than average. Excluding the ‘top 10’ HCCs from the payment system would have a large effect on the average risk score of United, and virtually no effect on Kaiser’s.
Regulators
CDC announcements/reports from last week report:
- Obesity rates and weight loss drugs: The states with the highest prescribing rates are among those with greater prevalence of diabetesand obesity. Importantly, the data from 1.9 billion claims from private insurers, as well as Medicare — which only covers GLP-1s to treat diabetes — and Medicaid lumps the prescriptions together, After Kentucky, West Virginia had the next highest prescribing rate, at 18.9 prescriptions dispensed per 1,000. That was followed by Alaska (17.5 per 1,000), Mississippi (16.1) and Louisiana (15.4). Rhode Island had the lowest rate of prescriptions (3.7 per 1,000), and its neighbor Massachusetts had the second lowest (4), followed by Wisconsin (4.3) and Hawai’i (4.3.)
- CDC: Per the CDC’s National Center for Health Statistics report last week: The percentage of emergency department visits by children with no insurance decreased from 7.4% in 2010 to 3.0% in 2021. Among adults, the percentage of visits with Medicaid increased from 25.5% in 2010 to 38.9% in 2021, and the percentage of visits by those with no insurance decreased from 24.6% to 11.1% during this period.
CMS announcements/rules from last week:
- Prior authorization final rule: Health insurance companies and states will have to resolve prior authorization requests within 7 days or 72 hours if urgent under the 822-page final rule “Advancing Interoperability and Improving Prior Authorization Processes” rule. The regulation also includes new data standards the agency says will facilitate interoperability for prior authorizations and requires covered entities to disclose prior authorization statistics. The rule applies to insurers in the Medicare, Medicaid, Children’s Health Insurance Program, as well as health insurance exchange markets. Starting in 2027, insurers and states will have to use the Health Level 7 Fast Healthcare Interoperability Resources—also called HL7 FHIR—API to process prior authorizations.
- CMS: Physician payments: Last Wednesday, CMS announced it would raise Medicare reimbursements to home health companies by 0.8% in 2024–a reversal from a 2% payment cut proposedin June. However, the agency also warned that as early as 2025, care providers could be on the hook for $3.5 billion in overpayments CMS made from 2020 through 2022. Those overpayments stemmed from adjustments in the Patients-Driven Groupings Model that took effect in 2020.
- CMS: MA open enrollment results: Medicare Advantage enrollment increased 2.9% to 32.9 million as of Jan. 1 to 52% of eligibles. UnitedHealthcare’s 1.6% growth rate and Humana’s 2% fell below the 2.9% industry average. CVS Health subsidiary Aetna recorded the greatest rate of Medicare Advantage enrollment growth, as sign-ups rose 15.8% to 3.9 million.
USDA: States opt out of food assistance program in 15 states: Per the USDA, Republican governors in 15 states are opting out of a new federally funded program to give food assistance to hungry children during the summer months, denying benefits to 8 million children from low-income households across the country. The program is expected to serve 21 million children starting in June, providing $2.5 billion in relief across the country…
35 states, five U.S. territories and four Native American tribes indicated they will be participating. In 2022, food insecurity rates increased sharply, with 17.3% of households with children lacking enough food, up from 12.5% in 2021, according to the USDA.
Republican governors in 15 states reject summer food money for kids Washington Post January 10, 2024
MedPAC report: Coding intensity and the types of enrollees who select Medicare Advantage plans will drive an additional $88 billion in payments to the program in 2024 compared with what traditional Medicare would receive, according to the Medicare Payment and Advisory Commission’. annual status report for Medicare Advantage in 2024. The advisory group estimated that risk scores in Medicare Advantage will be 20.1% higher for patients than if they were enrolled in traditional Medicare accounting for $54 billion in additional payments to Medicare Advantage plans in 2024.
MedPAC-MA-status-report-Jan-2024.pdf January 12, 2024
FTC, DOJ probe antitrust case against Open AI: Per Politico reporting last week, the DOJ and FTC are both pushing to investigate Microsoft’s OpenAI partnership for antitrust violations: The Justice Department and the Federal Trade Commission are in discussions over which agency can probe OpenAI, including the ChatGPT creators’ involvement with Microsoft, on antitrust grounds. The FTC initiated talks with the DOJ months ago to figure out which one can review the matter, according to three people with knowledge of the matter. But neither agency is ready to relinquish jurisdiction, the people said, which must be resolved before the government can formally intervene in one of the most high-profile and controversial tech partnerships in recent years.
Note: According to a report issued last month, both the Federal Trade Commission and Justice Department filed 50 merger challenges in fiscal year 2022, more than we’ve seen in over 20 years. Some big deals have gone through, including Microsoft’s purchase of Activision Blizzard and UnitedHealth Group’s Optum unit’s acquisition of Change Healthcare. Federal regulators are investigating one pending megadeal—Kroger’s proposed $24.6 billion purchase of Albertsons—which the Washington state Attorney General’s office formally challenged last week
Both of these agencies want a piece of Microsoft’s Open AI partnership – POLITICO January 19, 2024
