News Clips
Health Affairs: (7/21) – The policy goals of payment reform can only be achieved by maximizing two objectives that are in tension: participation in risk-based alternative payment models and performance in those models. These goals are in tension because Medicare incentivizes participation in those models through financial rewards based on program performance. For example, modifications to the way that the Centers for Medicare and Medicaid Services (CMS) sets financial benchmarks for accountable care organizations (ACOs) can make the program more or less attractive to new program entrants. At the same time, those policy changes also affect the incentives of the ACOs within the program to perform well and reduce spending, which serves to benefit Medicare’s long run fiscal health.
Milbank Memorial Fund: (7/20) – The COVID-19 pandemic is shaping the financial outlooks of large and small hospital systems in a manner that is expected to further fuel this consolidation trend. A recent analysis found that the more consolidated the market, the greater the relief payments received by the hospital. The pandemic also created financial crises for small providers and placed enormous stress on small and independent medical practices, which is expected to fuel a wave of retirements, sell-offs, and bankruptcies. Meanwhile, private equity has enormous resources coming out of the pandemic that they must spend quickly, and it is expected that they will focus on the healthcare industry. All of these factors will contribute to fewer choices for patients.
Modern Healthcare: (7/20) – Doctors are leveraging a competitive market as more leave their private practices behind. Health systems, insurers, private equity firms, large physician groups and growing for-profit primary-care practices are making their best pitch to lure physicians and their referral networks. Many of the pitches look similar. They promise a better work-life balance, the flexibility to pursue alternative payment models as well as the autonomy and tools to practice how they prefer. But depending on the market, industry observers are concerned that unrivaled size and power could drive up costs.
NPR: (7/20) – Hospitals are a really important part of the American economy. Not just in terms of health and wellbeing, but in terms of dollars and cents. The largest chunk of America's healthcare spending goes to hospitals. But because of growing monopolization of them, Zack Cooper, an economist at Yale School of Public Health and his colleague, Martin Gaynor, have found that about 80 percent of America's hospital markets are now "highly concentrated."The research clearly shows, Cooper says, that growing monopolization has raised prices for patients as less competition means hospitals can charge higher prices and get away with it.
Healthcare Dive: (7/20) – In the proposed 2022 Outpatient Prospective Payment System rule released Monday, CMS wants to halt elimination of the inpatient-only (IPO) list and is seeking comment on how best to update outpatient and ambulatory surgical center quality reporting programs to include more information related to health equity. Providers heavily opposed the plan to eliminate the IPO list when it was announced in December, as it would have meant losing some business to outpatient facilities.
Beckers ASC Review: (7/20) – The financial strain of COVID-19 and dwindling interest in private practice from physicians in the early stages of their careers have prompted the closings of 31 physician groups and outpatient specialty centers this year.
Modern Healthcare: (7/19) – The Biden administration wants to increase fines for hospitals that are not making clear, accessible pricing information available online, according to CMS' proposed outpatient pay rule on Monday. The agency has proposed increasing the minimum fine for violations of the hospital price transparency rule to $300 per day for hospitals with 30 or fewer beds. Hospitals with more than 30 beds would have to pay $10 per day for each bed up to $5,500 daily. Hospitals could face annual fines of $110,000 to more than $2 million, depending on their size.
Fierce Healthcare: (7/19) – A new analysis found only 5.6 percent of hospitals were fully compliant with a major price transparency rule, with most failures centered on not posting payer-negotiated prices. The analysis released Friday by the group PatientRightsAdvocate.org is the latest evidence of widespread noncompliance with the rule, which went into effect back in January.
Modern Healthcare: (7/19) – Investors spent almost 10 times more buying physician practices in the second quarter of 2021 compared with the prior-year period. Solic Capital Management tallied total transaction value of $126.1 billion in the three months ended June 30, which the firm characterized as a "staggering" increase over the $12.9 billion announced during the same period in 2020. Today's investors are mostly private equity firms and the hottest area for investment is primary care, a surprising finding given that private equity tends to favor specialties with higher reimbursement like dermatology, ophthalmology and orthopedics.
RevCycle Intelligence: (7/16) – Telemedicine use skyrocketed among primary care practices during the pandemic, specifically for those with a value-based payment model, according to a research letter published in JAMA Health Forum. Although fee-for-service primary care organizations appeared to have a big near-term financial incentive for telemedicine use, results revealed that telemedicine was significantly more popular among practices reimbursed by value-based payment models.
Healthcare Dive: (7/15) – President Biden’s executive order on competition nudges the Federal Trade Commission (FTC) to ban or limit noncompete agreements — including in healthcare. It's unclear how swiftly the FTC will act and how broad the scope of a potential ban could be. The agency will most likely target the least controversial aspects of such agreements, such as those covering low-wage workers who are highly unlikely to hold any trade secrets to avoid pushback from the courts.
Modern Healthcare: (7/15) – President Joe Biden's latest executive order promoting competition in the U.S. economy could be a boon to private equity and disrupt the medical profession's long-standing guilds, depending on how far federal officials want to take matters.That's because hospitals will probably pause or slow their merger and acquisition activity while they wait for the Biden administration's next move, allowing private equity firms to roll up ancillaries and physician practices in the near term.
Modern Healthcare: (7/14) – Health plans have been striking more and more risk-sharing agreements with providers and digital health companies as the shift to value-based care intensifies—but that momentum faces challenges, analysts say. With more value-based contracts come more complication, particularly when it comes to attribution—or trying to figure out how to divvy up cost savings among multiple partners, That's led health plans to pump the breaks on adding more value-based partners, potentially hindering digital health ventures—like Amazon's Amazon Care—from striking value-based deals with health plans that want to pay fee-for-service.
Health Payer Intelligence: (7/14) – As the healthcare industry gravitates toward value-based care, population-based payment models have become the golden standard for payers, as the ultimate state of value-based care payment. Unfortunately for health insurers, the healthcare industry has lagged in population-based payment uptake. Population-based payment models are models that are detached from fee-for-service reimbursement altogether, as opposed to other alternative payment models that continue to build off of fee-for-service structures.
Modern Healthcare: (7/14) – Provider groups are preparing to fight after the new proposed fee schedule does not include pay raises for doctors, physician assistants, nurse practitioners and others. For the 2021 calendar year, there was an across-the-board 3.75% pay rise, at a cost of $3 billion to taxpayers. This was only possible because Congress decided to increase Medicare spending rather than adhering to the program's budget neutrality requirement. Now that the short-term boost is due to expire, CMS has proposed a 3.75 percent reduction in the physician fee schedule's conversion factor, which is used to calculate physician payments, for next year. As a result, total provider payments won't increase in 2022 unless Congress allocates additional money.
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