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AHA: Anthem-Cigna merger would hurt move to value-based reimbursement


The American Hospital Association (AHA) is urging a federal appeals court to uphold a district court decision that has blocked Anthem’s proposed $54 billion acquisition of Cigna.

The organization asserted that the combined company would reduce innovation in the health-insurance market when it’s most needed to continue shifting healthcare away from the fee-for-service model toward value-based care.

“Anthem has been less willing than Cigna to innovate and develop value-based reimbursement systems,” the AHA wrote.

Anthem has said that it is “committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice.”

However, the AHA contended that value-based reimbursement models “depend critically on the willingness of payers to experiment, innovate, and collaborate with hospitals and physicians to develop new payment methodologies that go beyond the old fee-for-service system.” And there is “substantial evidence that underscores Cigna’s particular reliance {as opposed to Anthem’s} ‘upon innovation to compete,’” the AHA added.

AHA’s brief comes days after the Department of Justice, several states and the District of Columbia also urged the appeals court to maintain the lower court’s blocking of the agreement. There is “overwhelming evidence – uncontested by Anthem on appeal” that the merger would raise prices to consumers and shrink innovation among insurers, and that “showed Anthem had no real plan to achieve” the medical-cost savings it asserted that the combined company would create.

To read the AHA’s argument please hit this link.



AHA warns of clinical, fiscal disaster if ACA repealed

The American Hospital Association (AHA) and Federation of American Hospitals (FAH) warn of  possible clinical and financial catastrophe if the Affordable Care Act is repealed, as the Republicans have vowed to do.  They  released this statement:

“The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) {have} sent letters to President-elect Trump and Congressional leaders highlighting a new report that details the impact a potential repeal of the Affordable Care Act (ACA) would have on hospitals and health systems as they strive to care for their communities.”

To read the report, please hit this link.

The AHA and FHA press release went on:

Rick Pollack, AHA president and CEO, and Chip Kahn, FAH president and CEO, stressed that health coverage is key to ensuring patients have access to the care they need.  They noted that any reconsideration of the ACA should be accompanied at the same time by provisions that guarantee similar coverage to those who would lose it.  They also highlighted the important role hospitals play in providing essential medical services and critical public health infrastructure.

It appears Congress is moving to reconsider the ACA in the early days of the new year without enacting accompanying legislation specifically guaranteeing similar coverage for those who will lose it.  If that approach is taken, they asked that any repeal legislation prospectively restore key hospital reductions included in the ACA to offset the cost of providing coverage. In that instance, the groups stated:

“… [W]e respectfully urge you to also include in such legislation the prospective repeal of funding reductions for Medicare and Medicaid hospital services for patient care that were included in the ACA for purposes of helping fund coverage for the insured. Specifically, we seek your support for the restoration of the Medicare hospital inflation update, as well as Medicare and Medicaid Disproportionate Share Hospital (DSH) payments that support those facilities that take care of high volumes of uninsured, poor and disabled Americans. Restoring these cuts for the future is absolutely essential to enable hospitals and health systems to provide the care that the patients and communities we serve both expect and deserve.”

The report, which was commissioned by the AHA and FAH, was prepared by the health care economics firm Dobson/ DaVanzo. The report finds that, under the most recent repeal without replacement bill, H.R. 3762, hospitals would face a net negative impact of $165.8 billion from 2018-2026 after accounting for the restoration of the Medicaid DSH cuts that H.R. 3762 contemplates. It also found that hospitals would suffer a loss of $289.5 billion in Medicare inflation updates if the payment reductions in the ACA are not restored. Finally, the study authors calculate that the impact of retaining the Medicare and Medicaid DSH reductions would amount to $102.9 billion.

“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care, decimate hospitals’ and health systems’ ability to provide services, weaken local economies that hospitals help sustain and grow, and result in massive job losses. As you know, hospitals are often the largest employer in many communities, and more than half of a hospital’s budget is devoted to supporting the salaries and benefits of caregivers who provide 24/7 coverage, which cannot be replaced,” wrote Pollack and Kahn.

The letter also calls attention to a second Dobson | DaVanzo analysis that estimates the cumulative federal payment reductions to hospital services that have been imposed through other Congressional and Executive Branch actions subsequent to and independent of the ACA. These reductions alone total another $148 billion from 2010 – 2026, and come on top of the ACA reductions.

Pollack and Kahn concluded the letter by committing to work with the President-elect Trump and Congress during this challenging process and reiterating the importance of properly funding hospital services.

They wrote, “As you begin reconsideration of the ACA, we want to be a constructive partner in this discussion. We strongly believe that any repeal legislation must be accompanied by provisions that protect the coverage for those currently receiving such protection. However, if that is not the legislative path to be pursued, then it is vital that such legislation provide a true clean slate and also include repeal of the reductions in payments for hospitals services embedded in the ACA – specifically the substantial reductions to hospitals’ annual inflation updates and the cuts to Medicare and Medicaid DSH payments. If the coverage associated with the ACA disappears, the importance of these payments would be heightened – they are vital in helping defray the costs of treating our most vulnerable patients.”


AHA again takes aim at CMS site-neutral rule


The AHA has again asked the Centers for Medicare & Medicaid Services to delay implementing  the site-neutral provisions of the Bipartisan Budget Act next Jan. 1, citing potential risk for hospitals to  violate the Stark law and Anti-Kickback statute.

Under the site-neutral rule, CMS would pay for services rendered in hospital outpatient departments at the same, lower rate it pays for  treatment in physicians’ offices. The proposal has engendered controversy since its announcement, with physicians and hospitals taking opposing views.

The AHA now has further ammunition in its push to delay the rule’s implementation. Parts of the rule would apparently make hospitals vulnerable to punishment  under laws restricting  hospitals’ provisions of free goods or services to referring physicians.

The AHA analysis concludes that hospitals could  unfairly suffer  by bearing the extra cost of operating their outpatient departments at ”no cost to physicians.”

To read a longer story on this, please hit this link.

Heart Assn. focuses on social determinants of heart health



The American Heart Association  is urging public- and private-sector healthcare policymakers to pay  more attention to the social factors that influence heart health, such as race, education and location.

This all comes under what we at Cambridge Management Group have long worked to understand  and address — the social determinants of health.

“What we’re discovering is that this is a very complicated space and there may be a number of variables beyond people’s control that have an impact on their health,” Dr. Clyde Yancy, an author of the report, told Reuters. Dr. Yancy  is chief of cardiology at Northwestern University’s Feinberg School of Medicine, in Chicago.

He gave as an example  new research suggesting that local pollution levels are tied to the risk of high blood pressure, among an area’s population.

The AHA group  notes that deaths from cardiovascular disease have declined since the 1970s thanks to advances in prevention and treatment.

But the group noted  that not all groups have benefited equally across economic, racial and ethnic groups. “Overall population health cannot improve if parts of the population do not benefit from improvements in prevention and treatment,” it wrote.

They cited social and economic status, race, ethnicity, social support, culture and language, access to care and place of residence as determining factors of health.




Anger grows over drug-cost surge


Attendees at the American Hospital Association’s  recent annual meeting asked whether the pharmaceutical industry can be shamed into controlling the astronomical costs of some of its brand-name drugs — or whether the federal  and state governments may soon feel compelled to come in  with what are in effect price controls.

The public is becoming increasingly and frustrated by the gigantic and arbitrary drug-price surges, which threaten to destroy efforts to bring overall U.S. healthcare costs — far and away the world’s highest — under long-term control.

As the AHA’s site notes “Critics say most of the price increases appear to be arbitrary and some have happened virtually overnight, even for medications that have been available for some time. They’re demanding more transparency from the drug industry.”

A New York Times editorial speculated that disclosures on investment and profit “might shame [drug] companies into restraining their price increases and provide state officials with information to determine what action to take.”

Governing magazine noted:

“In state’s fight for price transparency, drugmakers are winning.”

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