Missouri adds new Medicaid leverage for managed-care companies

Tension between managed-care contractors and Medicaid-reliant hospitals is boiling in Missouri, where the state is docking Medicaid payments for providers who don’t join one of the three managed-care networks.

Missouri’s move, which went into effect July 1, has sparked an outcry from hospitals, who frame it as the state tipping its hand in what are often fraught negotiations with payers. The new regulation imposes a 10% fee-for-service cut on any provider who doesn’t opt into the networks run by Centene, which does business in Missouri as Home State Health Plan, UnitedHealthcare and WellCare. Twelve of the state’s 160 hospitals have not yet joined at least one of three plans’ networks.

A spokesperson for the Missouri Health Plan Association, representing all three managed-care insurers, defended the new mandate as simply an incentive for the outlying hospitals to engage with Medicaid now that managed care is the direction the state wants to go. The spokesperson said Missouri’s managed care reimburses at no less than 100% of the Medicaid fee for service rate.

But hospitals say the state is handing over all leverage for how they get paid to these plans. The carriers didn’t fully absorb Medicaid coverage for the state’s designated managed-care market—made up of poor parents or guardians of young children, children and pregnant women—until May 2017. As of this year, they hold about $2.3 billion of the state’s $8.8 billion annual Medicaid spending, the association’s spokesperson said. For acute-care patients and the chronically ill, the state still pays providers directly through fee for service.

“By tipping the leverage toward the state’s MCOs, the change gives the plans unilateral rate-setting power,” Missouri Hospital Association CEO Herb Kuhn wrote in the group’s publication last month. “If a hospital doesn’t agree to accept whatever payment rate the Medicaid managed-care plan offers, the plan can simply refuse to sign a contract, locking in the fee-for-service level cut.”

Steven Edwards, president of the CoxHealth system of six hospitals in and around Springfield, said he thinks the scale is already tipping. He has been negotiating a contract over the past year with the last of the three managed-care plans, whose network he hasn’t yet joined, when suddenly last month the talks broke down.

This signals, to him, that the rule limiting him to 90% of fee-for-service Medicaid if he doesn’t enter the plan network is turning the tables. This affects his Medicaid-heavy rural hospitals since Missouri already has one of the lowest Medicaid reimbursements in the country.

“We’re negotiating a contract right now,” Edwards said. “You would think that there is no motivation for the payer to pay more than 90%, because it will fall back to that for us.”

Edwards and other practitioners and hospitals are gauging how the regulation might affect obstetrics especially, since pregnant women are one of the largest segments of managed care and Medicaid covers the births of just over 40% of the state’s babies. Medicaid deducts obstetric gynecologists by another 10 points, and typically hospitals subsidize them. Edwards projects that his system’s 800-bed flagship hospital in Springfield, which delivers about 4,000 babies per year, would see a $5 million hit. About 30% to 40% of the babies delivered in that hospital are on Medicaid, Edwards said.

Amid all the hospital outcry, the future of the regulation is uncertain as hospitals gear up to lobby the new governor. Republican Gov. Eric Greitens resigned last month and was replaced by GOP Lt. Gov. Mike Parson.

“Our hope is that when attention is drawn to this matter and he realizes he has inherited something from his predecessor with implications probably not well understood — we would like to convince him to pause and get the Legislature involved,” Edwards said.

The fallout comes amid another new Medicaid controversy triggered late last month when Parson signed a $2.7 million contract with the consulting firm McKinsey & Co. to complete a comprehensive analysis of Medicaid.

House Minority Leader Gail McCann Beatty, a Democrat, immediately flagged the award as potentially problematic because it was more than twice as much as all three competing bids combined. One of the rival contractors, Navigant, has already filed a complaint and asked for a rebid.

According to the Jefferson City News Tribune, McCann Beatty alerted Parson by letter to McKinsey’s “close ties” to a high-ranking Greitens hire, Drew Erdmann, the state’s first chief operating officer. She also criticized the bidding process, begun on Greitens’ watch, as “highly questionable.”

Kuhn is blasting the administration for pursuing the regulation before the analysis is done. In addition, he wrote, hospital leaders and the health department have already started discussions about managed care in the state.

“This process should be allowed to play out,” Kuhn said. “A half-baked solution could only compound the problems providers are experiencing currently.”

While the Medicaid transition into managed care has become the norm nationwide, plenty of states and rural states in particular have seen ongoing issues with the transition—particularly in places like Missouri that did not expand Medicaid and where the slim numbers translate into much tighter margins for managed-care plans.

Iowa under former GOP Gov. Terry Branstad moved to managed care so quickly, after underestimating the per-person cost, that the state last year sought hundreds of millions in federal dollars to essentially bail out its program and keep the plans in their contracts.

Faulty estimates for capitation have gone the other way too, particularly in expansion states. Rhode Island auditors in 2015, after the state expanded Medicaid under Obamacare, found the state had overpaid Neighborhood Health Plan and UnitedHealthcare more than $200 million and had to start clawing back the funds.

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California law introduces new data concerns for healthcare organizations

California legislators are giving companies dealing in personal data—including some health information—yet another set of restrictions to contend with thanks to a new broad privacy law passed last week.

The California Consumer Privacy Act of 2018 gives consumers more control over the personal data that businesses collect. Companies have to tell people what data they’ve collected, what they’re using the data for, and which third parties they’ve given access to the data, among other requirements.

Although healthcare companies already comply with HIPAA, the new state law will create another layer of compliance when it goes into effect in a year and a half.

“It’s going to have a significant impact on the healthcare sector,” said Mark Brennan, a partner with Hogan Lovells. “From an operational perspective, it’s going to be interesting to see how companies work to sort out these requirements.”

For some organizations, like those that make consumer-facing wellness apps that collect personal information, the law will apply to all the personal data they collect.

For others, like those defined as covered entities under HIPAA, the law does not apply to protected health information regulated by HIPAA’s privacy, security and breach notification rules.

But it does apply to other information held by an organization that does business in California.

For instance, if a consumer requests that an organization delete their personal information other than protected health information, the organization has to take the request into consideration.

“Healthcare provider organizations need to start thinking about what data they have and whether or not it is covered by HIPAA and what data they might be getting from other sources they may not be covered by HIPAA,” said Dominique Shelton, co-chair of Perkins Coie’s ad tech privacy and data management group.

Healthcare organizations must also be careful when investing in outside companies that develop and market consumer-facing health or wellness mobile apps and solutions or when launching their own internal ventures that do the same.

“The privacy, and security administrative and technological infrastructure for complying with the newly-established rights of the consumer under this new and far-reaching law will be a key feasibility consideration,” said Bernadette Broccolo, a partner with the law firm McDermott Will & Emery.

Businesses that work with covered entities will also need to pay close attention to the type of data they’re collecting.

“Groups that may buy and sell data from EHRs—this may have a significant effect on their business,” Brennan said. “There’s the possibility that this law could put U.S. companies at a disadvantage in global competition,” he said. “It’s going to be difficult for California courts to enforce this law against non-U.S. companies.”

But many of those companies, and some U.S. companies too, are already paying attention to similar requirements by the European Union’s General Data Protection Regulation policies.

“The good news is everyone’s been thinking along these same terms for GDPR,” said David Ross, principal and cybersecurity growth leader for the risk, internal audit and cybersecurity practice at Baker Tilly. “Everything you’ve done for GDPR pretty much ports over, since it shares a tremendous amount in common from a conceptual level with GDPR.”

So, much as healthcare organizations needed to prepare for those regulations, which went into effect on May 25, they’ll need to figure out which patients’ data this law applies to, Shelton said. “Everybody’s going to need to update their privacy policies when this goes into effect,” she said.

Some expect the California law, like GDPR, to start a domino effect, with other states soon following suit, Ross said. “California’s always been kind of a trendsetter.”

https://bit.ly/2MKuRNM

Tennessee seeks to update strategy for hospital uncompensated care

Tennessee plans to seek federal permission to change how it doles out uncompensated-care funds to hospitals.

The state is collecting comments on a proposed state plan amendment to update how Medicaid distributes disproportionate-share hospital, or DSH, funds, which cover unpaid bills at hospitals with high amounts of Medicaid patients. Tennessee receives $53 million in Medicaid DSH funds annually.

Currently, each eligible hospital receives a set amount of DSH money. If they have been overpaid, the state recovers the excess DSH funds and redistributes them to other hospitals within the same DSH funding group. These categories include essential service safety net hospitals, children’s safety net hospitals, and free-standing psychiatric hospitals. The state plan amendment will allow recovered funds to be redistributed to any DSH-eligible hospital.

Tennessee is looking to make the change as its hospitals face mounting financial pressure, largely due to the state’s decision not to expand Medicaid. Eight hospitals in the state closed between January 2010 and January 2018, according to a database created by the North Carolina Rural Health Research Program.

Only Texas has had more hospitals close during that eight-year period, according to the database.

Patient revenue hasn’t covered total hospital expenses in the state since 2010, according to the Tennessee Hospital Association, which tracks the finances of acute-care hospitals. By 2014, expenses were $240 million more than patient revenue, according to the association’s most recent figures.

The trade group supports the proposed change and plans to work with the state to implement it, according to Yolanda James, an association spokeswoman.

Erlanger Health System, a Chattanooga, Tenn.-based system with seven hospitals, also praised the move as it gives the state more flexibility in handling the distribution of funds, according to Stephen Johnson, vice president of governmental and payer relations at Erlanger.

https://bit.ly/2KHGbwR

States expand telemedicine to allow prescribing of controlled substances

Legislators are beginning to open up new avenues for providers to use telemedicine to prescribe medications, a move that’s indicative of growing acceptance of virtual care as a way to improve access.

On Sunday, Connecticut became the latest state to allow providers to prescribe controlled substances through telemedicine for treating psychiatric disabilities and substance use disorder. Seven other states have recently passed similar laws allowing the prescription of controlled substances via telemedicine.

“They’re recognizing that it’s a clinically meaningful part of taking care of patients,” said Nathaniel Lacktman, a partner and healthcare lawyer with Foley & Larder, whose telemedicine industry team helped the Connecticut Psychiatric Society write part of the bill. “The landscape has changed significantly over the last two years.”

This bill reflects a trend of incremental change, said Marki Stewart, an attorney with Dickinson Wright. “States are slowly and narrowly carving out certain circumstances where telemedicine could be used to improve care,” she said.

But patients and providers alike will still face limitations, despite bills like the one Connecticut just passed.

In most cases, prescribers must first have in-person visits with patients before prescribing them medications virtually, even in states whose laws don’t require preliminary in-person visits because of the federal Ryan Haight Online Pharmacy Consumer Protection Act, which was passed in 2008 and requires the practice.

Congress is considering relaxing some of the Ryan Haight Act’s restrictions, allowing certain facilities to qualify as Drug Enforcement Administration-registered clinics so providers could prescribe controlled substances to patients in those facilities.

The changes reflect legislators’ growing realization of how industry practices have changed since the act passed, said Jennifer Breuer, a partner with Drinker Biddle.

“When Ryan Haight was passed, telemedicine was this pie-in-the-sky idea, and there were online pharmacies letting you fill out a questionnaire and get whatever you asked for,” she said.

But telemedicine has matured, and the federal government has cracked down on online pharmacies.

Now, telemedicine visits can sometimes be recorded in electronic health records. When it comes to prescribing, that means more opportunity for verification, Breuer said.

The Connecticut law and others aren’t just a reaction to the changing technological landscape; they’re also a reaction to the shortage of psychiatric care in the country—a shortage made particularly acute by the opioid-addiction epidemic.

“The federal government is starting to recognize that telemedicine has a lot of benefits,” Stewart said. Though the CMS greatly limits what kind of virtual care can be reimbursed through Medicare, the agency is testing new use cases.

Private insurers are adding conditions for which telemedicine can be used, with a particular focus on chronic diseases.

“There’s a real understanding and data to show that people don’t have access to the care they need in real time and where they can access it,” Breuer said. “Telemedicine may not be a panacea, but at least it’s a step in the right direction.”

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Agents and brokers flee ACA exchanges despite Trump administration support

The number of registered brokers and agents who help people sign up for coverage through the federal ACA insurance exchange continued to decline in 2018, despite the CMS’ efforts to encourage their participation by making it easier for them to sign up customers during open enrollment.

The number of agents and brokers participating in the Affordable Care Act open enrollment for 2018 dropped 24.8% to 49,100 from more than 65,300 during open enrollment for 2017 coverage, according to a CMS report released Monday. Since open enrollment for 2016 coverage, the number of registered agents and brokers has fallen by 38.3%.

Health insurer exits from the exchanges, expensive member premiums and limited commissions for those who enroll individuals in exchange plans have driven brokers and agents out of the market, the CMS said. The agency’s strategy to encourage shoppers to seek help from brokers while giving brokers more tools to engage consumers failed to stem the exodus.

During open enrollment for 2018 coverage, the Trump administration allowed consumers to bypass the federal HealthCare.gov platform and buy an ACA-approved plan directly from a broker or an insurer’s website.

It also introduced a tool called “Help on Demand” that connected shoppers to licensed agents able to help with application and enrollment questions. The CMS also began recognizing high-performing brokers and agents in 2018. On the flip side, the Trump administration slashed federal funding to ACA navigators, who receive grants to assist consumers during open enrollment. Some navigator groups were forced to cut staff or cancel outreach events because of the smaller budgets.

The administration has supported privatizing health insurance enrollment. But navigator funding cuts, along with dwindling broker participation have helped reduce ACA enrollment. Nearly 11.8 million people signed up for 2018 coverage, down from 12.2 million in 2017. So far 1.1 million people have dropped their 2018 plans as of mid-March, the CMS said Monday.

Still, the CMS said that though there are fewer agents and brokers participating, they are still supporting about 42% of HealthCare.gov customers.

Brokers help consumers navigate coverage options and also tend to advocate for their customers if claims get denied. They’ve historically signed up about half of all exchange enrollees. Before the ACA, insurance companies would pay brokers commissions based on monthly premiums for plans sold on the individual market. But insurers—many of which lost money on their individual insurance plans, but are now on track to make a profit—have increasingly chosen to stop paying those fees for all or certain types of health plans, saying its necessary for them to stay financially viable.

The CMS in December 2016 issued guidance instructing health plans to be consistent in how they pay commissions across all exchange plans, effective January 2018. But brokers say nothing has changed since the guidance came out. Groups representing agents and brokers have long complained that the CMS was unwilling to enforce commission payments for fear of discouraging insurer participation.

“Without a viable compensation structure for agents and brokers, it may be difficult for CMS to improve or stabilize agent and broker retention and achieve significant enrollment gains, leaving consumers with diminished access to insurance specialists willing to help them in their local communities,” the agency said in its report.

The CMS also said it would continue to streamline the HealthCare.gov platform for 2019 and give brokers and agents new tools to help them assist customers with eligibility determinations and plan selections while reducing the need to use the federal website or call center.

https://bit.ly/2NsgJK6

Malaysia firm IHH submits new bid for Fortis

Malaysia`s IHH Healthcare Berhad today said it has made a fresh binding offer to the board of Fortis Healthcare.

The binding offer is valid till July 16, 2018, IHH Healthcare Berhad said in a regulatory filing.

IHH today issued a letter to the board of Fortis “setting out a binding offer, which supersedes and replaces the enhanced revised proposal,” it added.

“In the event IHH does not receive any response from Fortis by no later than 5 pm ISTon July 16 2018, the binding offer shall be deemed to have been withdrawn,” IHH Healthcare Berhad said.

The company, however, did not provide any details about the size of the bid.

Cash-strapped Fortis Healthcare had set July 3 as the deadline for the submission of the fresh binding bids. The company had earlier scrapped its decision to opt for the offer by the Munjal-Burman combine to invest Rs 1,800 crore in the company.

Earlier, Fortis Healthcare had received binding bids from four suitors — Munjal-Burman combine, TPG-Manipal consortium, Malaysia`s IHH Healthcare Berhad and KKR-backed Radiant Life Care.

China`s Fosun Healthcare had not made a binding bid for the company.

https://bit.ly/2KMrQfv

Globus Medical Adds Two Innovative Solutions to Growing Trauma Portfolio

Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal solutions company, announced today the expansion of its orthopedic trauma product portfolio with two new product offerings, the ANTHEM Ankle Fracture System and the ANTHEM Proximal Humerus Fracture System, marking the Trauma divisions fourth and fifth comprehensive product launches over the last 10 months.

This is an exciting time for Globus Trauma as we continue to execute our product launch strategy and build a comprehensive Trauma product portfolio, said Barclay Davis, Vice President, Orthopedic Trauma. With each new product introduction, our goal is to design systems that help streamline the procedure, increase versatility, reduce operative time, and improve patient care.

ANTHEM Ankle Fracture Plating and other lower extremity systems will be exhibited at the annual American Orthopedic Foot and Ankle Society Meeting in Boston, MassachusettsJuly 11th-14th. Globus Medical invites meeting attendees to Booth 206 to experience its recent product innovations and discuss trauma advancements with the companys product development experts.

The ANTHEM Ankle Fracture System is an extensive range of 7 unique plating options for treatment of virtually any ankle fracture. Over 25% thinner than the market leaders plate, ANTHEMs low profile ankle fracture plates are designed to minimize soft tissue irritation from implant prominence. Anatomically contoured plates, extensive screw options and instruments specifically designed for ankle anatomy are rolled into one efficient and comprehensive system for treating ankle fractures.

The ANTHEM Proximal Humerus Fracture System is designed to treat a wide variety of shoulder fractures and streamline procedural flow. The unique polyaxial screw technology allows for more accurate targeting of dense calcar bone to enhance fixation, independent of plate position. Large suture holes simplify suture attachment for soft tissue or rotator cuff repair. This comprehensive stand-alone system includes small fragment instruments and innovative retractors to help streamline the surgical procedure, aid in visibility of the fracture site, and optimize surgical time.

Indications

The ANTHEM Fracture System is indicated for fixation of fractures, osteotomies, arthrodesis and reconstruction of bones for the appropriate size of the device to be used in adult patients, including the clavicle, scapula, humerus, radius, ulna, small bones (metacarpals, metatarsals, phalanges), wrist, pelvis, femur, tibia, fibula, ankle, and foot. The clavicle hook plate may be used for dislocations of the acromioclavicular joint.

Small fragment, proximal tibia, clavicle and distal fibula plates may be used in all pediatric subgroups (except neonates) and small stature adults. Distal radius plates may be used in adolescents (12-21 years of age). Plating may be used in patients with osteopenic bone.

https://bit.ly/2Kx70ER