Washington Update: Monday, May 15, 2023
CMS’ proposed change in high-cost outliers remains our focus in Washington.
Company leaders are engaging with the highest levels of the government and with our hospital partners to argue that, if the proposed policy is not reversed, then CMS is inadvertently encouraging LTCHs to avoid high-acuity cases – limiting access to care for the sickest of patients. The LTCH community argues that sicker patients over the past few years – combined with the staffing challenges – resulted in major cost anomalies, distorting high-cost outliers.
LTCH site-neutral rates return as COVID Public Health Emergency ends.
After more than three years, the COVID-19 Public Health Emergency came to an end last week and, with it, LTCH site-neutral rates now return. The CARES Act of 2020 suspended site-neutral rates in LTCHs, allowing some LTCHs to receive the full LTCH rate for lower-acuity patients. Site-neutral rates were imposed by Congress as part of the 2013 LTCH criteria law. Select Medical has always focused on higher acuity patients and generally avoided site-neutral issues.
Study: MA Prior Authorization Sucking Up More Time & Resources
A new study by the Medical Group Management Association (MGMS) finds that the cost and time required to comply with Medicare Advantage (MA) plans’ prior authorization (PA) requirements continues to grow. The study also found that a significant majority (72%) of peer-to-peer PA reviews were conducted by a plan clinician that wasn’t from a relevant specialty. CMS is now finalizing PA rules for health plans and Congress considers legislation. (Link to study.) https://www.mgma.com/news-insights/press/may-3,-2023-mgma-statement-on-latest-data-on-prior
House Republicans take aim at CMS’ Innovation Center
The House Ways & Means Health Subcommittee held a hearing and asked for greater oversight of “CMMI,” the CMS subdivision responsible for testing new payment systems. The main CMMI proposal at issue was a new drug pricing scheme (opposed by the pharmaceutical sector) but, also at issue, was the way CMMI has spent billions of dollars to test new payment methods with little progress in achieving its mission of lowering costs and raising quality.
And… CMMI legislation is likely coming.
Health chair Vern Buchanan (R-FL) mentioned that he hopes to put together legislation dealing with CMMI. Republicans have long questioned CMMI since it was created under the Affordable Care Act (ACA). “[CMMI] has tested more than 50 models since its creation,” said Rep. Adrian Smith (R-Neb.). “Despite millions of taxpayer dollars spent setting up and evaluating these models, only six of these were found to have delivered statistically significant savings.”
PA elections tomorrow will again determine control of state House.
Two special elections tomorrow could again tip control of the state House, now controlled by Democrats with 102 seats to Republicans 101 seats. Control has shifted between Republicans and Democrats since the November 2022 elections thanks to a series of vacancies and special elections. Now two House members have resigned – one Democrat from suburban Philly and one Republican from Lewisburg – triggering tomorrow’s special elections.
PA voters will also choose a new state supreme court justice.
Pennsylvania voters will also choose tomorrow from four lawyers seeking election to the state’s highest court. A seat has been open since the death of former Chief Justice Max Baer last year. In recent years, the court has decided cases on reproductive rights, mask mandates, and election disputes. Justices elected as Democrats have been in the majority since 2015. The seven-member court is currently composed of four Democrats and two Republicans.
Philly may be on verge of electing its first female mayor.
Philadelphia will elect a new mayor this year to succeed Jim Kenney. Tomorrow’s election is just the Democratic primary, but Philly hasn’t elected a Republican mayor since 1952. So, whoever wins tomorrow’s Democratic primary is likely to become the next mayor. It’s a crowded field of ten Democratic candidates but the three leaders in the polls are all women – Cherelle Parker, Rebecca Rhynhart and Helen Gym – which means Philly might soon have its first female mayor.
Home health provider Amedisys sells itself to Option Care
Amedisys agreed to be acquired for $3.6B by Option Care, an infusion therapy provider. Amedisys had a market capitalization of roughly $2.6B, while Option Care was valued at approximately $5B. Capital markets were not supportive of the deal with Option Care shares losing 25% of their value. One analyst predicted Option Care was paying a premium right before CMS is planning to reduce home health profitability. The combined company would have $6.2B in revenues.
GPO Premier is considering its strategic alternatives.
Group purchasing organization Premier is evaluating a potential sale of part or all of the business. The GPO is supposedly considering a separation of its service consulting division from its core supply chain division. GPOs negotiate price savings on drugs, medical devices and other supplies and services for healthcare providers such as hospitals and physician groups. Premier, based in Charlotte, has a member network of more than 4,400 hospitals.