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Court Rejects 340B Cuts

A federal court has ruled that the Centers for Medicare & Medicaid Services overstepped its authority in reducing Medicare payments for prescription drugs covered by the section 340B prescription drug discount program. While the court conceded that CMS has the authority to address 340B payments, it found that CMS’s drastic payment cuts, introduced in FY 2018, “…fundamentally altered the statutory scheme established by Congress…” for determining 340B payment rates. The court suggested that CMS either change its methodology for determining 340B payments to justify the specific cuts it proposes or raise its objections with Congress, which created the program and has the authority to change it. According to documents submitted to the court by the parties that filed the suit, … Read More

Posted in Medicare, Pennsylvania safety-net hospitals

Feds Urge States to Do More for Dually Eligible

In a formal guidance letter to state Medicaid directors, the Centers for Medicare & Medicaid Services has outlined ten ways that states can better serve individuals who are enrolled in both Medicare and Medicaid. Noting that such dually eligible individuals represent 20 percent of Medicare enrollees but 34 percent of Medicare spending while also constituting 15 percent of Medicaid beneficiaries but 33 percent of Medicaid spending, the letter from CMS administrator Seema Verma to state Medicaid directors explains that This letter describes ten opportunities – none of which require complex demonstrations or Medicare waivers – to better serve individuals dually eligible for Medicare and Medicaid, including through new developments in managed care, using Medicare data to inform care coordination and … Read More

Posted in Federal Medicaid issues, Medicare

Medicare Advantage to Address Social Determinants of Health

Beginning next year, the Centers for Medicare & Medicaid Services will authorize Medicare Advantage plans to pay for some health-related but non-medical benefits for their members – benefits that will help address social determinants of health that affect the health status of many Medicare beneficiaries. As explained by Health and Human Services Secretary Alex Azar at a recent event in Salt Lake City, These interventions can keep seniors out of the hospital, which we are increasingly realizing is not just a cost saver but actually an important way to protect their health, too.  If seniors do end up going to the hospital, making sure they can get out as soon as possible with the appropriate rehab services is crucial to … Read More

Posted in Medicare, social determinants of health, Uncategorized

New Approach to Readmissions Program to Take Effect October 1

Medicare’s hospital readmissions reduction program will move in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals. The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group. As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 … Read More

Posted in Medicare

Proposed Federal Reorganization Could Affect Health Care

Aspects of a proposed reorganization of the federal government could affect the agencies that administer key health care programs. In its 132-page Delivering Government Solutions in the 21st Century:  Reform Plan and Reorganization Recommendations proposal, the White House calls for consolidating many social safety-net programs in a new Department of Health and Public Welfare.  This department would retain responsibility for Medicare and Medicaid but also would assume responsibility for some food aid programs, including food stamps (now the Supplemental Food Assistance Program, or SNAP). In addition, the proposal would: consolidate all health research programs in the National Institutes of Health, including the Agency for Healthcare Research and Quality, the National Institute for Occupational Safety and Health, and the National Institute … Read More

Posted in Federal Medicaid issues, Medicare

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress. Among the findings included in the report by the Medicare Payment Advisory Commission are: Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays. Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted. MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities. MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities. MedPAC’s recommendations include: Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care. Reducing … Read More

Posted in Medicare

S&P: 340B Cuts Will Hurt

Payment cuts in the 340B prescription drug program will most likely hurt hospital financial performance, and among those most likely to be hurt are DSH hospitals, small hospitals, and rural hospitals. These are among the conclusions in a report recently issued by S&P Global Ratings. The report concludes that …the impact of the cuts to the 340B Drug Pricing Program on not-for-profit hospitals that rely on 340B drug savings will likely weaken their operating performance at a time of already tightening margins. Effective the beginning of 2018, the Centers for Medicare & Medicaid Services cut the 340B program 16 percent, or $1.6 billion, reducing the reimbursement 340B-eligible hospitals receive for dispensing prescription drugs on an outpatient basis to eligible patients. … Read More

Posted in 340b, DSH hospitals, Medicare, Pennsylvania safety-net hospitals

The 340B Issue Explained

The section 340B prescription drug discount program has grown increasingly controversial in recent years. The program, established in the 1990s to help hospitals with the cost of the prescription drugs they provide to low-income patients on an outpatient basis, has grown considerably since its inception.  Pharmaceutical companies argue that it is too large, that it contributes to the growing cost of prescription drugs, and that hospitals are not using the savings they reap from the program to serve more low-income patients, as was envisioned when Congress created the program. Eligible providers, on the other hand, note that much of the program’s growth was mandated by Congress and that 340B continues to serve its original purpose of helping hospitals serve low-income … Read More

Posted in Medicare

Helping Safety-Net Hospitals Help Their Patients

A new report published on the Health Affairs Blog describes the continuing challenges safety-net hospitals face and offers suggestions for helping them meet those challenges. The challenges, according to the report, are the virtual elimination of the Affordable Care Act’s individual health insurance mandate; the continued decline in the amount of Medicare disproportionate share hospital money (Medicare DSH) provided to safety-net hospitals; and hospital closures that shift more of the burden for caring for uninsured patients onto a smaller pool of safety-net hospitals.  The result is under-served patients and new financial risks for the hospitals that remain after some safety-net hospitals close because of the large amounts of uncompensated care those hospitals continue to provide. To address these challenges, the … Read More

Posted in Affordable Care Act, Medicare

New 340B Bill Proposed

A new bill introduced in the House seeks to bring greater transparency to the controversial 340B prescription drug discount program. Under H.R.5598, proposed by Rep. Earl “Buddy” Carter (R-GA), hospitals would be required to report the outpatient care they provide to low-income patients in both their main hospital and at pediatric care sites.  Hospitals already separately report the inpatient care they provide to such patients. According to Representative Carter, I introduced this legislation today because I believe the 340B program is very important, but it needs to be improved.  340B is an outpatient program and currently hospitals do not have to report low-income utilization in outpatient settings. This legislation adds an additional layer of transparency to allow us to better … Read More

Posted in Medicare
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