Jul
13

Friday catch-up – Hospitals and a BS alert

Glorious week here in New York’s Finger Lakes – high 70s, lots of sun, nice breeze.  I know, Florida friends, you’ll be gloating in February when it’s 10 below and snowing sideways…

Hospitals

NCCI’s just-released research indicates facility costs are rising, driven at least in part by less competition among hospitals. Key takeaway:

Reductions in hospital operating costs do not translate into price decreases. Research to date shows that hospital mergers increase the average price of hospital services by 6%−18%.

Kudos to NCCI for this research and the piece itself. The article is very well-written, concise, and understandable for us laypersons. NCCI has upped its game considerably of late, producing excellent work and explaining what their findings and implications thereof.

I’m going to focus on this in a post next week – there’s a ton of insights here that demand careful consideration from payers and employers.

For those looking to better understand how hospitals set prices, determine what their actual costs are, and how they use data to reduce costs while improving care, read this piece in HealthAffairs.

And there’s this – a hospital in the Cayman Islands is delivering excellent care at a fraction of the cost of US facilities. The facility is fully accredited, provides a simple, bundled price for each procedure (instead of bills for each doctor, facility fee, procedure, implant…) and will be a very attractive option for many Americans with specific health needs.

Medicaid

My bullshit detector went nuts when a press release hit the inbox this week.

In what has to be one of the crappiest, most distorted, unscientific and biased pieces of “research” ever done, a so-called “non-partisan” entity calling itself one of the nation’s “leading public policy organizations” claims:

in some states, up to 70% of able-bodied adults enrolled in Obamacare expansion earned $0 in income

I’m going to dig into this steaming pile of nonsense next week, but for now, know that this is flat out wrong.  There are so many errors, distortions, flat-out wrong statements, conflations, and unsupported conclusions in this “research” it just boggles the mind.

It’s one thing to have principled disagreements on policy. It’s entirely another thing to lie your ass off.

For those interested in real research by unbiased experts, the Kaiser Family Foundation’s recent report on Medicaid Work Requirements is required reading.

OK, rant over – till next week.

 


Jun
19

Roads to stability

After eight days with family in Tuscany, it’s back to work.

Before we dive into the mundane, an observation from my travels.

This is a road built by the Romans about 2000 years ago. It’s still pretty functional, as were most of the ones we rode on in the hills and valleys of Tuscany. Sure, it could be smoother and a bit less steep (or a LOT less steep) in places, but it’s still there.

The Romans built these by hand, with nothing but human and animal power, with no electronics or computers or drones or satellite or engineering apps, no internal combustion or hydraulics or steam- or coal- powered machines. And they’re still here.

The Romans built these roads to speed communications, trade, and security. The labor that built these roads was drawn from the poor in the cities, local farms and landowners.

Somehow, that bumpy, narrow road of stones buried in the dirt eons ago felt a lot more…reliable.

All those opioid bills in Congress

Now we know why Congress can’t get anything done – At last count there were about 30 opioid-related bills in various stages in the House or Senate – over 20 have actually been passed by the House. One of the bills that addresses the Institutions for Mental Diseases is pretty contentious.

According to the Washington Post, the “IMD exclusion”  prohibits federal Medicaid reimbursements for inpatient treatment centers with more than 16 beds whose patients are mainly suffering from severe mental illness. The House bill would lift the exclusion for treatment of opioid addiction- but ONLY opioid addiction.

This ignores the very real and pervasive nature of other-substance addiction that has long plagued poor rural, minority and inner-city populations – crystal meth is just one example.

Why we’d pass a bill that doesn’t address crystal meth, which is a disaster in many rural communities from Maine to Arizona, is beyond me.

But there’s another issue here that’s even more troubling; this bill ignores the real problem; community-based treatment has always been starved for funds, unable to help millions of people who endlessly wait their turn for treatment.

Experts believe we need north of $10 billion per year to make a real impact on substance abuse disorder

Fact is, many with substance abuse disorder want to get treatment – there just isn’t any available. And allowing Medicaid to spend billions on care delivered in large institutions sounds a lot like a hand-out of taxpayer dollars to big business-owned “treatment” centers.

The IMD exclusion repeal is just window-dressing, a way for politicians to claim they’re doing something while handing billions to an industry with really good lobbying.

What does this mean for you?

The Romans built very expensive and very solid, stable, and durable roads that led to the long-term survival and success of the Empire.

We give truckloads of taxpayer dollars to big business while ignoring the devastation of the rural and inner-city poor.

Where will our decision lead us?

 


Apr
13

When are you going to sue the opioid industry?

States, cities, counties, school districts, and individuals all have sued the opioid industry.  A lot of these have been consolidated in one suit in Federal District Court in Cleveland under what is known as Multidistrict Litigation or MDL. The judge in that case has ordered trials to begin in 2019.

Courts and law enforcement go after penny-ante street dealers, narcos, and their supply chain, and now they are going after guys like this…

This is Arthur Sackler MD of Purdue Pharma, courtesy Wikipedia.

In Cleveland, Judge Polster has ordered the DEA to turn over voluminous records of opioid transactions next week. The records, for a handful of states for 2006 – 2014, will be used to identify what drugs were shipped where by whom.

While hundreds of cases have been consolidated into this one, the Judge, Dan Aaron Polster, has no jurisdiction over many more suits that have been filed independently by individuals, employers, providers, estates, and others.

But the MDL case overseen by Judge Polster is instructive, as he is focused on not only resolving the case, but finding long-term answers to what will certainly be a decades-long struggle to deal with the harm caused by the opioid industry. His intent appears to be to help identify financial resources to help pay for that work.

From the LaCrosse Tribune:

The judge’s ultimate goal is to “dramatically reduce the number of the pills that are out there and make sure that the pills that are out there are being used properly.

“The court observes that the vast oversupply of opioid drugs in the United States has caused a plague on its citizens and their local and State governments. Plaintiffs’ request for the … data, which will allow Plaintiffs to discover how and where the virus grew, is a reasonable step toward defeating the disease,” the judge wrote in an order.

Estimates of the harm already caused and the bills that will come due are in the hundred billion dollar plus range, this for an industry that sold almost $10 billion in opioids in one year, 2015.

So, back to my question.

When is the workers’ compensation industry, a group that buys way more than 10% of the opioids sold every year, going to sue the opioid manufacturers and marketers? 

We are waiting…


Dec
14

It’s not a tax bill, it’s a healthcare bill

OK, a bit of hyperbole – but only a bit.

Here’s how the Trump Tax Bill will affect healthcare…

  1. Immediate $25 billion cut in Medicare spending followed by a total of $400 million over the next nine years
    This has to happen under “PAYGO” rules which require offsets in spending when revenues are cut (as will happen under the Trump Tax).  Medicare is NOT AN ENTITLEMENT, it is an EARNED benefit. Starting January 1, 2018, doctors, hospitals, and pharma are going to take the hit as Medicare will stop paying for some care delivered by doctors.
  2. 13 million (+/-) more people will lose health insurance
    If you can sign up AFTER you get sick, why would you pay premiums until you need insurance? The bill ends enforcement of the mandate, but insurers are still REQUIRED to take all comers. So, many younger and healthier people will not sign up, and when they don’t the “pool” of insured people will get older, less healthier, and therefore more expensive to insure.
  3. Individual health insurance premiums will go up about 10%
    So, Insurance companies will raise premiums by about 10% as healthcare costs for the older, less healthy population will go up.
  4. Drive insurers out of the individual and small group markets
    See above…
  5. Reduce drug development for “orphan” diseases
    Today pharma gets a major tax break for developing treatments for orphan diseases, such as cystic fibrosis, epilepsy, muscular dystrophy and Angelman syndrome. It appears that tax break goes away – and this will greatly reduce R&D. The tax credit has been cited as responsible for treatments for about 350 diseases; there are around 7000 in total.  Here’s one pretty amazing success story that will likely not be repeated due to the end of the tax credit.

With fewer people covered by insurance, and higher rates for those that are, we’re likely to see more insurers drop out of more markets.

The greatest impact will be seen several years down the road, when the overly-optimistic growth projections prove to be just that. Already, experts predict the Trump Tax Bill will add over a trillion dollars to our national debt. When that happens, there are going to be calls for massive cuts to ALL services – including Social Security, Medicare, and Medicaid.

What does this mean for you?

I’m thinking Medicaid for all by 2027.

 


Jul
10

Medicaid’s really important – even/especially to you.

Welcome back to MCM; I took a few days off posting to hit the campaign trail, where I heard a LOT of concern about possible changes to Medicaid.
Most of us probably don’t think much about Medicaid. Here’s why we should.
First, Medicaid covers the poor elderly, those who are totally disabled, and depending on the state, poor kids and families.
Second, many are really sick people or frail elderly with no other way to get healthcare.

 

Medicaid reimbursement is generally low compared to private insurance or Medicare, but that doesn’t mean access is severely limited. In fact, (about 70% of physicians do accept new Medicaid patients versus about 85% who accept new privately insured and Medicare patients) (ESI is employer insurance)


Dec
21

ACA Deathwatch: Hospitals, bankruptcy, and chicken-killing dogs

For those wondering why the GOP appears to be walking back its promise to “rip out Obamacare root and branch”, here’s why this is a whole lot harder than one might think.

And why the political realities make this picture far too real for the incoming Congress.

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The GOP has long prided itself as the party of fiscal responsibility; Speaker Ryan and Majority Leader McConnell have assailed ACA as unaffordable and a budget-breaker. However, among the myriad issues inherent in healthcare reform is this – repealing ACA would bankrupt Medicare’s hospital insurance fund next year.

(It would also alienate many who voted for Trump...but that’s another story.)

When ACA was passed, there were financial trade-offs put in place to address winners and loses in an attempt to make the law as budget neutral as possible.

Insurance companies, drug companies, device manufacturers, and hospitals paid higher taxes or got lower reimbursement because they were going to get a whole lot more business as millions more people got insurance. Specifically, hospitals’ Medicare reimbursement has been changed – in part to eliminate payment for medical mistakes and re-admissions, and in part by altering reimbursement mechanisms and formulas.

ACA also included a 0.9 percent payroll tax on the wealthy individuals earning more than $200k or couples making more than $250k.  This raised $63 billion, which went to fund Medicare’s Hospital Trust Fund.

The combination of lower total reimbursement and more revenue extended Medicare’s solvency by 11 years. Without ACA, the Trust Fund is bankrupt next year.

If the GOP repeals the ACA or eliminates the 0.9 percent tax on the very wealthy, Medicare Part A is technically bankrupt.

The incoming President, Congress, and HHS Secretary are facing the very same tradeoffs and complexities their predecessors faced in 2010 – health care is horrendously complex and inter-related.  There are no simple, easy answers.

What does the GOP do?

From here, it looks like they have a couple options.

  1. Repeal it, pass their own health care reform legislation that makes major changes, and claim success.  
    As noted above, and as we’ve seen over the last five years, changing the US healthcare system is brutally hard, there are way more unintended consequences than anyone could predict, and there are no simple answers. There is just no way they can cobble together legislation anytime soon that will address ACA’s issues and not result in a gigantic clustermess.
  2. Repeal ACA in two or three years, with the promise they’ll come up with a replacement in a year or two.
    Without a credible replacement, insurers and healthcare providers are going to panic. Expect insurers to exit the individual and small group health insurance markets in droves. Democrats will use Medicare’s pending insolvency to bludgeon Republicans in the mid-term elections.
  3. Rebrand ACA as TrumpCare, make a couple tweaks around the edges, declare victory, and go home.
    This gets my vote as most likely, primarily for the reasons noted above. Now that the GOP owns health reform and Medicare solvency, Democrats are going to tie the issue around their necks like a dead chicken.

For a more detailed discussion of the issue, here’s a good synopsis from Politico.

Later – Hospitals and Medicaid – it’s pretty scary. 

What does this mean for you?

Don’t be lazy. Healthcare reform is hugely complicated, and for those of us – that means you – invested in the industry, what’s about to happen is far too important for you to ignore it or pay it little heed.


Dec
7

Workers comp and Medicaid – Implications aplenty!

Workers comp and Medicaid are intertwined.

First, a few factoids about Medicaid.

  • Medicaid accounts for about 17% of US medical spend (work comp is about 1%)
  • It is very state-specific; states have a lot of control over who and what’s covered.
  • both federal and state funds pay for Medicaid, with the Feds covering about 62% of total costs
  • Most Medicaid recipients don’t pay deductibles, copays, or co-insurance. (Indiana is one exception)
  • Medicaid covers millions of people in working families.

Let’s dig into this last datapoint, as it has implications for workers’ comp.

63% of Medicaid recipients have at least one family member working full time. This varies among states, from 77% in Colorado to 51% in Rhode Island. 15% have a part time worker. Only 19% of recipients’ familes have no one working.

Many employers that don’t provide health insurance &/or aren’t required to provide health insurance under ACA recommend workers who qualify sign up for Medicaid.

Implications…

  • More workers are covered by Medicaid now than were pre-ACA
  • Medicaid’s health “benefits” are similar to work comp
  • Claiming behavior may well be influenced by coverage status

Next, employment.

Most credible studies indicate Medicaid expansion increased employment in states that expanded Medicaid.

Implications

More employment = more payroll = more workers’ comp premium and more claims (NOT higher frequency, which is a percentage and not a raw number)

There are a number of other benefits for states that expanded Medicaid – an excellent summary of all available research is here.

What does this mean for you?

Watch what happens with the GOP’s efforts to “repeal and replace” ACA.  Workers’ comp has done quite well since ACA’s full implementation; reductions in Medicaid will almost certainly have the opposite effect.

Note – if you want to argue or discuss, fine – cite sources and data to support your assertions.


Nov
21

Getting serious about health reform, part two – Medicare

As the GOP goes about repealing and replacing ACA, they’ll have to carefully consider how  Medicare will be affected, because it absolutely will be.

Briefly, reimbursement, senior drug benefits, hospital funding, and private Medicare Advantage programs were all altered by passage of ACA. Outright repeal of ACA will, according to most experts, result in higher Medicare costs in the future.

The GOP will have to walk a very narrow and tortuous path between increasing the deficit, something unacceptable to many legislators, and reducing benefits thereby angering its key constituency – seniors.

Not only did ACA make substantive and far-reaching changes to Medicare, but Medicare, Medicaid, group health and individual coverage are all inextricably linked. Reimbursement mechanisms and drivers, systems connectivity and protocols, coverage determinations and benefit design are related to, and influenced by, other payment sources.

Among the changes ACA made to Medicare are:

  • transition from strict fee for service to value-based purchasing
  • close the drug benefit’s “donut hole” (big out of pocket costs for recipients)
  • restrain increases in Medicare Advantage premium increases until the MA programs’ performance is on par with Medicare
  • fund ongoing and much-needed research

There’s been little detail from the incoming administration about future plans, however Speaker Paul Ryan’s “A Better Way” has a plan to address Medicare. It relies on privatization.  While Ryan’s website is outdated (still referring to the SGR), the “A Better Way” Plan, and recent press statements, provide some details on Ryan’s thinking about “repeal and replace”.

Before we jump into that, a word about ACA’s impact on Medicare. If ACA is repealed, there will be financial fallout for Medicare. In fact, as currently implemented, ACA’s passage has helped Medicare‘s viability.

Per Fact Check;

The law [ACA] both expanded Medicare fundingadding a 0.9 percent tax on earnings above $200,000 for single taxpayers or $250,000 for married couples — and cut the growth of future spending…The trustees’ 2010 report estimated that the ACA had added 12 years to the life of the Part A trust fund.” [emphasis added]

ACA also reduced some reimbursement (payments for imaging is one example), which many Republicans defined as “cutting” Medicare. That played well with seniors then, as most were highly protective of the system they’d been paying into for decades.

So, if ACA is repealed in its entirety, Medicare’s costs are going up.

Ryan’s solution

While there’s little in Pres. Elect Trump’s platform addressing Medicare, other GOP stalwarts have weighed To his credit, Speaker Ryan wants to improve Medicare’s future financial position; he proposes to do so by:

  1. Raising the eligibility age to 67 by 2020, and
  2. Dumping the current CMS-run system in favor of giving seniors vouchers they will use to buy coverage from private insurers. (currently private insurers administer the Medicare program under contract from CMS)

Financially, baby boomers MAY come out OK on the second point (except for those of us who are going to have to rely on the post-ACA private insurance market for two more years). But the Millennials and Gen Exers may well be looking at higher out-of-pocket costs if elected officials decide Medicare vouchers are just too expensive.

However, all seniors would be affected by a privatization of Medicare, and therein lies (one of) the issues.  Medicare is almost universally well-regarded and jealously guarded by seniors

  • 77% of seniors say Medicare is “very important” (that’s higher than the military)
  • more than 2/3rds say Medicare needs to make some changes to remain viable – but the overwhelming favorite “change” (87%) is for the Feds to negotiate drug prices
  • 75% of Medicare recipients believe it is working well

Most telling for Speaker Ryan, only a quarter of respondents thought Medicare should switch to the key plank of the Ryan plan – premium supports.

Reports indicate the GOP is going to move aggressively on repealing ACA and replacing it with something else.  Given the demographics of Trump/GOP voters (mostly older), their favorable views of today’s Medicare, and their lack of enthusiasm for higher premiums or cost share, this is going to be quite the challenge.

It will also be a clear indicator of how serious the GOP is about “reform”.

What does this mean for you?

The first 100 days are going to be quite interesting- watch for the battle between those focused on their core constituency and those seeking to fundamentally change health care.

 

 


Sep
26

What Medicare’s reimbursement changes mean for work comp

It isn’t possible to exaggerate the implications of the changes to Medicare’s provider fee schedule.

When Medicare shifts its weight, the foundations of workers comp move – a lot.  Here’s why.

First, around a third of provider reimbursement is governmental – and for some providers well over half of their payments come via Medicare, Medicaid, and other governmental programs which base reimbursement on CMS.

Second, the vast majority of work comp fee schedules are based on CMS therefore the changes  affect not only Medicare and Medicaid, but also many state workers compensation fee schedules. The decreases in reimbursement for imaging have been felt in Worker’s Comp. particularly in California and Florida. Also the increased reimbursement for physical therapy has also worked its way into the Worker’s Comp system.

The new fee schedule is known as MACRA.  Replacing the previous SGR system, MACRA will increase reimbursement 0.5% per year until 2019. At that point reimbursement will be flat until 2026.

While there are many other issues affected by this change, including increased reimbursement for quality and the use of electronic health records, the fee schedule changes themselves will have the most impact on Worker’s Compensation.

Expect continued increases in reimbursement for cognitive services; office visits, physical therapy and the like. I would also expect to see decreases in reimbursement for surgery and possibly ambulatory surgical centers which fare outside of MACRA.

What does this mean for you?

The schedule changes have already been felt in some states’ worker’s compensation systems. If Congress decides to take additional action which is possible but not probable this will also affect Worker’s Comp.


Dec
18

“Obamacare”, Medicaid, and workers’ comp settlements

In a piece in Insurance Thought Leadership, misleading labeledObamacare Expands Into Workers’ Comp”, MaryRose Reaston asserts that

The Affordable Care Act (ACA) was created to expand healthcare coverage. Unfortunately, the act has overstepped its bounds and will dip into the workers’ compensation coffers by requiring mandatory reporting for Medicaid beneficiaries. [emphasis added]

No, ACA has not “overstepped its bounds”.  The efforts by states are just that – state-based – and they are allowed/enabled by Federal legislation that is separate and distinct from the ACA.  Michael Stack has written an excellent summary of the situation, noting that the federal legislation allowing Medicaid to pursue settlements was part of the Medicaid Secondary Payer Act, which in turn was part of the 2013 Budget Bill..

In fact, I find the attempt to link ACA with state Medicaid recovery activity curious and convoluted. ACA expanded Medicaid – in states agreeing to do so. States remain the primary regulatory bodies for Medicaid. There is nothing in Ms Reaston’s argument that indicates how or by what means ACA encourages Medicaid to pursue workers comp settlements. States that expand or don’t expand Medicaid can decide to pursue settlements – independent of ACA.
Make no mistake, there are clear “winners” here – taxpayers. Any taxpayer should demand Medicaid recover any monies necessary to provide treatment paid for by Medicaid that should have been covered by workers comp.