Congress passes short-term funding bill extending DSH payments to March 8

By Dave Muoio - Both chambers of Congress voted Thursday to pass a bill Thursday that punts a partial government shutdown, set to go into effect this weekend, back to early March. Read Full Article…

VBA Article Summary

1. Legislative Action: The U.S. Congress has taken significant steps to avoid a government shutdown by passing a stopgap measure with a clear bipartisan majority, with the Senate voting 77-18 and the House voting 314-108. This temporary legislation, orchestrated by Senate Majority Leader Chuck Schumer and House Speaker Mike Johnson, aims to extend the government's operational deadline until midnight of the upcoming Saturday, providing lawmakers additional time to deliberate on a series of independent spending bills intended to finance the government for the rest of the fiscal year ending October 1.

2. Contentious Issues and Healthcare Provisions: The extension comes amidst notable disagreements between and within major political parties, particularly on sensitive topics such as the Ukraine conflict and border control. The stopgap measure is not just a budgetary band-aid but also a crucial healthcare provision. It defers an $8 billion annual cut to Medicaid disproportionate share hospital payments and extends funding for vital community health initiatives, including the National Health Service Corps and teaching health centers engaged in Graduate Medical Education programs, ensuring their operation until at least March 8.

3. Exclusions and Uncertainties: Despite addressing certain healthcare funding concerns, the stopgap does not tackle some of the more contentious healthcare-related financial adjustments. Notably, it overlooks lobbyists' pressing issues like the enactment of site-neutral Medicare payments and the adjustment to the physician Medicare payment rate that was implemented at the start of the year. This exclusion indicates potential future disputes and legislative challenges as these significant healthcare financial policies remain unaddressed in the stopgap measure.

A MUST Attend Event Based on DIR Poll Results

Projected Health Care Costs for Medicare Beneficiaries Rose Again in 2023

By Remy Samuels - The predicted savings target needed for Medicare beneficiaries to cover premiums, deductibles and prescription drugs in retirement increased once again last year, according to new data from the Employee Benefit Research Institute. Read Full Article…

VBA Article Summary

1. Retirement Health Care Savings Requirements: The Employee Benefit Research Institute (EBRI) has highlighted the substantial savings needed to cover health care costs in retirement. A couple with high prescription drug costs may need up to $413,000 for a 90% chance of covering these expenses. Individuals also face significant targets, with a 65-year-old man requiring $215,000 and a 65-year-old woman needing $252,000 for similar probabilities of covering Medigap plan premiums and median drug costs. These figures underscore the importance of early and adequate financial planning for health care in retirement.

2. Medicare Coverage and Out-of-Pocket Costs: Despite the introduction of Medicare and legislative efforts like the Patient Protection and Affordable Care Act, retirees still face considerable out-of-pocket expenses for health care, particularly for prescription drugs. While the Inflation Reduction Act of 2022 will cap Medicare Part D out-of-pocket spending at $2,000 starting in 2025, enrollees still bear a significant portion of their health care costs. EBRI's model indicates that even with these provisions, a substantial amount of savings is required to have a high likelihood of covering health care expenses, with individual savings targets varying based on the specific Medicare plan and the enrollee's gender.

3. Strategies for Addressing Rising Health Care Costs: As the availability of retiree health benefits from employers decreases, individuals must adopt proactive strategies to manage the high costs of health care in retirement. Spiegel from EBRI recommends maximizing contributions to 401(k) plans, especially when employers offer matching contributions, and participating in health savings accounts (HSAs) associated with high-deductible health plans. The pre-tax contributions and potential employer matching in HSAs can significantly offset future health care costs, and investing these funds can provide additional financial security in retirement.

CMS unveils new behavioral health model using a 'no wrong door' approach

By Noah Tong - The Centers for Medicare & Medicaid Services announced Thursday the Innovation in Behavioral Health Model, a new approach that is designed to test for improving outcomes for adults with mental health and substance use disorder. Read Full Article…

VBA Article Summary

1. Introduction of the Integrated Behavioral Health (IBH) Model: The IBH model, launching this fall, aims to streamline access to comprehensive care for adults in Medicare and Medicaid. It focuses on providing "physical, behavioral, and social supports" through community-based practices forming care teams. This model is distinct for its "no wrong door" approach, ensuring that individuals receive the necessary services regardless of how they initiate their care journey. Care includes screenings, assessments, and referrals, with the implementation phase spanning from 2027 to 2032.

2. Reverse Integration and Support for Behavioral Health: CMS officials underscore the innovative aspect of the IBH model, which integrates physical health services into behavioral health settings, a reversal of the typical model. This strategy, termed "reverse integration," aims to foster a holistic approach to healthcare. High-level officials, including Liz Fowler (CMS Deputy Administrator) and Andrea Palm (HHS Deputy Secretary), have emphasized the importance of integrating primary care with behavioral health, enhancing health IT infrastructure, and addressing health-related social needs such as housing and nutrition.

3. Operational Details and Expected Outcomes: The model is set to be piloted by the Center for Medicare and Medicaid Innovation in up to eight states over eight years. Eligibility for participation requires being a community-based organization or safety net provider meeting specific state and Medicaid criteria. The initiative anticipates reducing overall healthcare expenses, improving health IT systems, and addressing the high incidence of mental illness and substance use disorder among Medicare and Medicaid beneficiaries. Additionally, CMS is exploring the integration of the IBH model into the Merit-based Incentive Payment System as an Alternative Payment Model and is considering policy changes to ensure an adequate number of in-network behavioral health practitioners in Medicare Advantage plans.

Bernie Sanders proposes subpoenas of CEOs of J&J, Merck on drug prices

By Rachel Cohrs - Senate health committee chair Bernie Sanders has taken a step toward subpoenaing the CEOs of Johnson & Johnson and Merck related to an investigation into high drug prices in the United States, he announced Thursday. Read Full Article…

VBA Article Summary

1. Unprecedented Move by Sanders: Senator Bernie Sanders (I-Vt.) is taking a rare step in seeking subpoenas against Johnson & Johnson CEO Joaquin Duato and Merck CEO Robert Davis for declining to testify at a Senate health committee hearing on high prescription drug costs. This move is notable as the committee hasn't issued a subpoena in over 40 years. The hearing, aimed at addressing why the U.S. faces the highest drug prices globally, saw only Bristol Myers Squibb CEO Chris Boerner willing to participate, contingent on other CEO involvement. Sanders also intends to propose a committee vote on initiating an investigation into the soaring drug costs.

2. Corporate Response and Senate Dynamics: Johnson & Johnson and Merck have shown reluctance to have their CEOs testify, offering alternative executives and expressing concerns about the hearing's nature. Both companies, along with Bristol Myers Squibb, have engaged in legal actions against the federal government, deeming the Medicare drug price negotiation program unconstitutional. These companies argue that the hearing is more retaliatory than informative, especially regarding their legal challenges. Contrarily, Sen. Bill Cassidy (La.), a top Republican on the panel, advocates for a bipartisan approach and sees value in hearing from executives responsible for drug pricing.

3. Wider Context and Implications: The situation unfolds amidst broader scrutiny of drug pricing in the U.S., with the health committee previously hearing from executives of other major pharmaceutical companies like Moderna and insulin manufacturers. The tension underscores the complex interplay between government oversight, corporate interests, and legal frameworks, particularly as companies allege the hearing's motive is punitive due to their opposition to recent legislation on drug price negotiations. Sanders's firm stance, juxtaposed with threats of subpoenas to other corporate leaders like the CEO of Starbucks, highlights a growing assertiveness in tackling what he views as corporate evasion of accountability in crucial public health matters.

How Can AI Support Value-Based Care?

By Marissa Plescia - Artificial Intelligence has the potential to greatly improve clinical care and support the transition to value-based care, but also comes with risks. So what role should AI play in value-based care models? The question was posed last week during a panel discussion at CES 2024 that was moderated by Dr. Jesse Ehrenfeld, president of the American Medical Association. Read Full Article…

VBA Article Summary

1. Application of AI in Low-Risk Areas and Human Oversight in Clinical Decisions: Chris Jagmin from CVS Health’s Aetna emphasizes the importance of implementing AI in low-risk areas such as aiding clinical decision-making and insurer approvals. However, he cautions against solely relying on AI for critical clinical decisions, advocating for human oversight to ensure ethical and accurate outcomes. Dr. Maria Ansari of The Permanente Medical Group aligns with this viewpoint, emphasizing that while AI can augment clinical decision support tools, it's the physicians, not AI, who treat patients. Both stress the necessity of a human touch in clinical decisions.

2. AI's Role in Enhancing Value-Based Care: Dr. Ansari highlights the effective use of AI in a value-based care model, particularly in predicting patients' needs for additional care levels. She presents AI's potential in responsibly identifying individuals at risk of severe health conditions like strokes or heart attacks. Ansari exemplifies this by detailing how The Permanente Medical Group leveraged AI to analyze mammogram data, significantly improving the prediction accuracy for breast cancer risk compared to traditional methods. This indicates AI's capability to enhance healthcare outcomes by prioritizing and optimizing patient care, especially in post-pandemic scenarios where healthcare backlogs, like delayed mammograms, are prevalent.

3. National Emphasis on Safe and Responsible AI Use in Healthcare: The discussion reflects a broader national movement towards the safe and responsible utilization of AI in healthcare, marked by President Joe Biden's executive order on AI development and use. Following this, notable healthcare organizations, including CVS Health, committed to the responsible adoption of AI. This indicates a collective acknowledgment of AI's transformative potential in healthcare, provided it's harnessed under stringent ethical standards and with a foundational emphasis on enhancing, not replacing, human-led clinical care.

Dozens of health systems, state groups back AHA lawsuit against HHS' 3rd-party web tracker policy

By Dave Muoio - The American Hospital Association (AHA)'s lawsuit against the Department of Health and Human Services’ (HHS’) third-party web tracker policy has picked up the support of other hospital industry groups and organizations. Read Full Article…

VBA Article Summary

1. Legal Action Against HHS Bulletin: Seventeen state hospital associations, 30 hospitals, and health systems, alongside the American Hospital Association (AHA), filed friend-of-the-court briefs to support a lawsuit against the Department of Health and Human Services’ (HHS) bulletin released in December 2022. The bulletin, which addresses the use of web tracking tools like Meta Pixel and Google Analytics, has been described by these groups as "unlawful and uncounseled." They argue that the tools are vital for maintaining online health information and countering medical misinformation. They also contend that the rule leads to unnecessary litigation that benefits certain lawyers without providing meaningful public benefit, while also undermining hospitals' ability to deliver healthcare services and share critical health information.

2. Concerns Over HIPAA Violations and Information Sharing: The HHS bulletin highlights potential HIPAA violations in using web tracking tools on hospital websites without proper user authentication. This has led to investigations of numerous providers. Hospitals argue that the bulletin disrupts the balance between privacy and information sharing as outlined in HIPAA. They express concerns that the restrictions prevent effective information gathering and dissemination, crucial for identifying community health needs and providing valuable services such as translation, accessibility, and navigation for healthcare facilities. The plaintiffs highlight that even federal government healthcare websites use similar tracking tools, pointing out a perceived inconsistency in the application of the bulletin's guidelines.

3. Request for Injunction and Legal Relief: The plaintiffs are seeking legal relief by requesting the court to declare the data collected by these tools as not individually identifiable health information, thereby not covered under HIPAA. They aim for a permanent injunction against HHS and the Office for Civil Rights (OCR), preventing the enforcement of the bulletin. The plaintiffs argue that the bulletin, while presented as guidance material, effectively acts as a legislative rule with significant legal implications, condemning a new category of conduct under HIPAA without proper procedural adherence, such as notice-and-comment rulemaking. The lawsuit also points to the substantial costs incurred by hospitals due to the removal of these technologies and the resulting unfounded litigation, emphasizing the bulletin's negative impact on hospital operations and public health services.

Humana warns of higher medical costs as patients use insurance more often

By Nathan Bomey - Health insurers are feeling the pain as patients are getting treated at higher rates than expected. Read Full Article…

VBA Article Summary

1. Increased Healthcare Utilization Impacts Insurer Profits: Humana's recent announcement highlighted a significant rise in Medicare Advantage costs due to an unexpected increase in inpatient hospital admissions. This trend, coupled with increased expenses in non-inpatient services like physician visits, outpatient surgeries, and supplemental benefits (dental and vision), has led to a higher portion of premiums being spent on medical care (91.4% in Q4 from an expected 89.5%). Consequently, this leaves less revenue to support the company's bottom line, forcing Humana to revise down its profit expectations for individual Medicare Advantage members in 2024 to just 1.8%.

2. Market Reaction and Future Profit Outlook: Following the announcement, Humana's stock experienced a significant drop, decreasing by 11% in early-afternoon trading and erasing billions of dollars from its market valuation. Analysts, including Morningstar's Julie Utterback, express concerns that the company's profit outlook through 2024 might be weaker than anticipated. This downward trend in profit expectations is partly attributed to seniors catching up on elective procedures that were postponed during the pandemic, as noted by insurers like UnitedHealth, who also reported a jump in utilization rates.

3. Industry-Wide Implications and Future Premium Adjustments: The observed trends in healthcare utilization are not confined to Humana but are seen as impacting the insurance industry broadly. Humana anticipates these trends to be factored into the 2025 Medicare Advantage pricing cycle, suggesting a potential rise in premiums for consumers. As insurance companies adjust to the increased demand for healthcare services, the broader implications for the industry and policyholders will likely include recalibrated premium structures to accommodate the higher costs associated with this uptick in healthcare utilization.

It’s Time to Fully Embrace Precision Medicine’s Promise in Pediatrics

By Jeremy Woods, M.D. - Medicine typically treats patients using evidence derived from studies of large groups of people. Such studies are valuable, but they may ignore a patient’s individual biology. Read Full Article…

VBA Article Summary

1. Revolution in Diagnosis and Treatment through Precision Medicine: Precision medicine marks a significant shift from the traditional "one-size-fits-all" approach, leveraging genomic sequencing to tailor diagnosis and treatment based on individual biology. This approach is particularly transformative in pediatrics, aiding in the management of rare diseases and pediatric cancer. The cost and time for genome sequencing have drastically reduced since the Human Genome Project, making it a viable option for many. However, challenges remain in data sharing among medical professionals and integrating vast genomic data into healthcare systems.

2. Economic Growth and Geographic Expansion of Precision Medicine: The precision medicine market is witnessing rapid growth, with a projected Compound Annual Growth Rate of 12.1% from 2023 to 2032. This growth is driven by advancements in cancer treatment, development of new therapeutic techniques, and breakthroughs in genomic research. North America and Western Europe currently dominate the market, but the Asia-Pacific region is expected to see significant growth. Initiatives like Project Baby Bear highlight the practical benefits and cost-effectiveness of rapid genome sequencing in pediatric care, further fueling the adoption and reimbursement support for precision medicine.

3. Future Prospects and Necessary Advances in Precision Medicine: To fully realize the potential of precision medicine, especially in pediatrics, there are several areas that require enhancement. These include managing the extensive data generated, integrating genetic testing data with demographic data to form comprehensive databases, and improving education and training for medical professionals in interpreting genetic data. Embedding genetic counselors in leadership roles and developing programs for secure data management and best practice advisories are crucial steps. The overarching goal is to navigate the complexities of technology and data to provide tailored and effective patient care, thereby transforming the landscape of healthcare.

Oncologists Sound the Alarm About Rise of White Bagging

By Alicia Gallegos - For years, oncologist John DiPersio, MD, PhD, had faced frustrating encounters with insurers that only cover medications through a process called white bagging. Read Full Article…

VBA Article Summary

1. White Bagging Consequences and Responses: White bagging, where specialty drugs are delivered from a pharmacy to the physician rather than being purchased directly by the oncologist, has been shown to increase costs for patients and reduce reimbursement for oncology practices. It can also pose safety risks due to potential drug contamination, inability to adjust dosages, and care delays. Dr. DiPersio, from Siteman Cancer Center, avoids white bagging but faces challenges when insurers mandate it, leading to potential nonpayment for drug administration. The practice is becoming more prevalent, as evidenced by a significant increase in white bagging in clinics and hospital outpatient departments from 2019 to 2023.

2. Economic Implications and Industry Opinions: White bagging shifts drug coverage from a patient's medical benefit to their pharmacy benefit, changing the reimbursement model and ostensibly reducing out-of-pocket costs. However, data indicates that white bagging actually increases patient costs and reduces payments to providers while benefiting insurers, specialty pharmacies, and pharmacy benefit managers. This profit-driven model often involves intertwined corporations controlling different stages of the drug supply chain, steering business and potentially compromising patient care quality.

3. Legislative Actions and Safety Concerns: As white bagging practices grow, safety concerns and the unpredictable nature of patient care have led some oncologists and states to take action. States like Louisiana, Vermont, and Minnesota have enacted laws to restrict or prohibit white bagging, aiming to protect patient care and ensure proper reimbursement for providers. At a federal level, healthcare associations are advocating for regulatory actions against white bagging due to its potential impact on patient safety and care continuity. Despite these efforts, the increasing prevalence of white bagging mandates puts oncologists in challenging positions, often forcing difficult decisions regarding insurance contracts and patient treatment options.

Why the right benefits are integral to retaining talent

By Rob Whalen - After a chaotic few years for HR professionals – from the “Great Resignation” to drastic shifts in employee demands and expectations – things appear to be stabilizing as we enter 2024. Read Full Article…

VBA Article Summary

1. Challenging Complacency in HR Strategies: Despite apparent improvements in economic indicators like decreasing quit rates and stabilized pay increases, HR professionals are cautioned against becoming complacent. The reality is that employees are still grappling with financial and mental stress, exhibiting low engagement levels, and contributing to ongoing retention challenges for companies. As January, a month notorious for high turnover rates, approaches, HR teams are urged to scrutinize their retention strategies, particularly their benefits packages. The modern workforce demands personalized benefits that acknowledge and address their unique needs and aspirations, moving away from traditional, inflexible benefits structures.

2. The High Cost of Turnover: The phenomenon of the "Great Resignation" highlighted the severe impact of turnover on organizations, with record numbers of employees quitting in recent years. Turnover extends beyond the direct financial costs of replacing an employee, which can amount to twice the employee's salary. It also manifests in decreased productivity, eroded morale, and diminished profitability. Companies find themselves paying a premium to attract new talent, all while battling the phenomenon of "quiet quitting," where employees psychologically disengage from their work. To combat these trends, HR teams must delve into the root causes of turnover and cultivate a deep understanding of their workforce's needs and drivers of job satisfaction.

3. Personalized Benefits as a Retention Strategy: With a significant proportion of organizations concerned about retention, it is imperative to address this issue through targeted actions. HR teams should focus on offering personalized, flexible benefits that resonate with individual employee needs, such as convertible PTO options that allow employees to align unused vacation time with their specific life goals. Such innovative benefits strategies not only address underutilization issues but also demonstrate a commitment to treating employees as individuals with unique needs and aspirations. By aligning benefits with the personal and professional goals of employees, companies can significantly enhance their retention rates and foster a more committed and engaged workforce.