Washington Update: Monday, February 6, 2023
President Biden will give his “State of the Union” speech tomorrow night.
Besides its political significance, a President’s State-of-the-Union traditionally marks the start of the Congressional law-making season. Ordinarily, the President submits his proposed budget the week after the speech. Then Congress reacts (in March), drafts its own budget (in April), and writes its separate spending bills (Summer). However, hanging over this year is also the Federal debt ceiling which needs to be increased in the next few months.
Will the Biden Administration include unified PAC-PPS in its budget?
For ten years now, both Democratic and Republican Administrations have included a proposed, unified post-acute payment system as part of its budget projections. This way, they can book the illusory, assumed savings from an untried system. It’s a common, if somewhat farcical, budgetary tactic in Washington. But what changed in the past year is that CMS released a report showing how difficult it is to do a new unified system, especially one that would generate meaningful savings.
Will Republicans recommend Medicare cuts as part of debt ceiling increase?
Republicans say they won’t agree to raise the Federal debt ceiling unless Democrats agree to spending cuts — which Republicans are not yet specifying. Social Security and mandatory healthcare spending (including Medicare), represent half of the Federal budget. Will Republicans propose cutting Medicare spending? Last week, House Speaker Kevin McCarthy (R-CA) has said that Republicans will not. And President Biden and Democrats would be unlikely to support if they did.
Charles Koch’s Republican network says it will oppose Donald Trump.
The network of Republican donors led by conservative billionaire Charles Koch said this weekend that it will oppose Donald Trump for the 2024 Republican nomination. The Koch network now joins the Club for Growth, another large spender, and finance billionaires Kenneth C. Griffin and Stephen A. Schwarzman in signaling their opposition to Trump’s attempt to win the GOP nomination for a third straight presidential election.
Pennsylvania Republicans gathered last weekend in Hershey.
The Pennsylvania Republican Party reelected Lawrence Tabas, a healthcare lawyer with the Obermayer firm, as state party chairman. Despite complaints about 2022 losses — Senate, Governor and State House (where Republicans lost control for first time in twelve years) — no serious plan to oust Tabas ever gained traction. The next big race is the 2024 Senate seat where Republicans are preparing to challenge Sen. Bob Casey (D-PA) who has served in the Senate since 2007.
AHA requests our input regarding MA plan claim practices.
The American Hospital Association requests our input on recent use of questionable claims review practices by MA plans. CMS has issued two new, proposed rules which would change the way MA plans adjudicate claims by tightening claims review requirements and requiring plans to accept prior authorization requests electronically. For information, contact Chris Carey who represents us in the AHA Post-Acute Council. CCCarey@selectmedical.com.
New rule allows CMS to clawback billions from overpaid MA plans.
Under a significant rule released last week, CMS’ will now be able to clawback billions from MA plans. After five years of analysis, CMS has now finalized how it will extrapolate from a small subset of MA audits and apply the error rate to the insurer’s entire MA business. The rule is referred to as the Medicare Advantage Risk Adjustment Data Validation (RADV). MedPAC estimates that MA plans are overpaid $17 billion each year. MA insurers will likely file a legal challenge.
COVID-19: For Washington, it’s all over but the shouting.
Even though COVID-19 is fading as a public health issue, it is soaring as a political issue. Democrats defend protective measures recommended by the NIH and CDC such as vaccine mandates, school closures and mask requirements. Republicans counter COVID-19 restrictions represented an over-reaction and unnecessary governmental intrusions into private life. Leading Republicans – Trump and DeSantis – are even sparring over who pushed back the most against measures they view as overreach.
Genesis, large PA-based SNF operator, announces growth after rough years.
The Kennett Square company, now privately-held after delisting in 2021, will take over 34 ProMedica (formerly ManorCare) sites in Pennsylvania and four in Colorado. Driving the decision is Welltower, a Toledo-based REIT, who decided to bring in Genesis for management. Genesis is one of the nation’s largest SNF operators and has faced years of financial struggles. Genesis has had several CEOs in the past few years. One-third of all COVID-19 related deaths occurred in SNFs.
Pennsylvania’s Tower Health hires new bankers to explore future options.
Tower Health – a multi-hospital non-profit system based in West Reading, PA -- has hired Houlihan Lokey, a healthcare-focused investment bank, to explore its options. Tower operates three large general hospitals and a children’s hospital, all in Pennsylvania. The Philadelphia Inquirer says Tower is recovering from “a botched expansion into Southeastern Pennsylvania” when, in 2017, it bought five hospitals from Community Health Systems.