On June 15, 2022, in a win for hospitals, the Supreme Court issued its opinion in American Hospital Association et. al. v. Becerra (“Becerra”), overturning massive reimbursement reductions in the 340B drug pricing program (“340B Program”).
In its December Hospital Flash Report, Kaufman Hall identified and reviewed the continued, negative impact of COVID-19 on hospital operating margins. After a dramatic drop in hospital margins during the height of the pandemic in 2020 and early 2021, hospitals experienced a fluctuation of decreasing and increasing margins in the latter-half of the year. Overall, hospital margins remain significantly narrower than they were in 2019, before the pandemic. As a result, the industry may see an increase in hospital transactions in 2022 to offset the operational and financial hardships that continue to burden the health care system, as described in greater detail below.
Continue Reading COVID-19 Impacts and Outcomes on Hospital Margins in 2021: Increased Activity in Hospital Transactions in 2022?
In July 2020, we discussed a ruling by the D.C. Court of Appeals upholding the Department of Health and Human Services’ (HHS) site-neutral payment rules. On Monday, June 28, 2021, the Supreme Court declined, without comment, to hear an appeal from the American Hospital Association (AHA) and other provider groups asking it to reverse this ruling.
Continue Reading Site-Neutral Payments Stand: SCOTUS Declines to Hear AHA Appeal, Preserving Lower Payments to Off-Campus Provider-Based Departments
On April 27, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released the Hospital Inpatient Prospective Payment System (“IPPS”) and Long-Term Care Hospital (“LTCH”) unpublished Proposed Rule for 2022 (“Proposed Rule”). The Proposed Rule, if enacted, would eliminate the requirement from the Hospital IPPS and LTCH Final Rule for 2021 (“IPPS Final Rule for 2021”), as discussed in our September 11, 2020 blog post, that hospitals report the median payer-specific negotiated charge with Medicare Advantage (“MA”) payers, by MS-DRG, on its Medicare cost reports for cost reporting periods ending on or after January 1, 2021. CMS estimates that this will reduce the administrative burden on hospitals by approximately 64,000 hours.
Continue Reading CMS Proposes Repeal of Certain Cost Reporting Requirements from the IPPS Final Rule for 2021
As many of us are starting to see the small light at the end of the tunnel, many hospitals are still reeling from the stress of the last year. Following…
Continue Reading Implications of the Pandemic on Hospitals – New OIG Report, Government Response, and What Comes Next
On December 2, 2020, the Centers for Medicare & Medicaid Services (“CMS”) finalized policies that “aim to increase choice, lower patients’ out-of-pocket costs, empower patients, and protect taxpayer dollars” with changes to the Medicare Hospital Outpatient Prospective Payment System (“OPPS”) and the Ambulatory Surgical Center (“ASC”) Payment System in the Medicare OPPS and ASC Final Rule (“Final Rule”). These changes include: elimination of the “Inpatient Only List” and additions and revisions to the “ASC Covered Procedures List” – two key areas of “site neutrality”. Site neutrality is a move to diminish or eliminate the reimbursement differences between different sites of service.
Continue Reading Forthcoming Medicare Rule Furthers Push for Site Neutrality
As part of the “CY 2021 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule” (the “Final Rule”) published on December 2, 2020, the Centers for Medicare and Medicaid Services (“CMS”) finalized policies designed to overhaul the methodology used to calculate the Overall Hospital Quality Star Rating effective 2021.
Continue Reading New Criteria Established for the Overall Hospital Quality Star Rating
On July 17, 2020, in a blow to health care providers, the U.S. Court of Appeals for the D.C. Circuit overturned a lower court’s more favorable ruling and held that the Department of Health and Human Services (“HHS”) “site-neutral payment” policy may stand.
Continue Reading Site-Neutral Payments Stand: D.C. Court of Appeals Overturns Ruling and Allows Lower Payments to Off-Campus Provider-Based Departments
On July 17, 2020, the Department of Health and Human Services (“HHS”) announced it will begin distributing $10 billion in a second round of funding to hospitals operating in high impact COVID-19 areas. The distribution is anticipated to begin as early as today, Monday, July 20, 2020. Hospitals with over 161 COVID-19 admissions between January 1 and June 10, 2020, or one admission per day, or that experienced a disproportionate intensity of COVID-19 admissions (exceeding the average ratio of COVID-19 admissions/bed) will receive funding in this distribution in the amount of $50,000 per eligible admission.
Continue Reading More Money On the Way in COVID-19 Fight: HHS Announces Additional $10B for Hospitals in High Impact COVID-19 Areas
On November 15, 2019, CMS issued a final rule that requires hospitals to disclose to patients the hospital’s “standard charges,” which include the reimbursement rates the hospitals negotiate privately with insurers. This rule is in line with President Trump’s Executive Order, dated June 24, 2019, which focused on increasing price and quality transparency for American healthcare consumers. The Final Rule goes into effect as of January 1, 2021, at which time hospitals will have to post their standard charges online. Any hospital that refuses to do so will be subject to a fine of up to $300 per day. While CMS believes that the Final Rule will lower healthcare costs by allowing customers to compare prices and proactively shop for care, the Final Rule has been met with strong resistance from hospitals that claim that it is beyond the scope of CMS’ power to promulgate. …
Continue Reading Balancing Provider Pricing Transparency and Anti-Competitive Behavior
On September 17, 2019, the U.S. District Court for the District of Columbia ruled against the Centers for Medicare and Medicaid Services (“CMS”), vacating CMS’ 2018 Final OPPS Rule, which cut Medicare reimbursement rates for certain outpatient hospital services provided at certain off-campus provider-based departments (“PBDs”).
Continue Reading D.C. District Court Vacates CMS Final Rule, Finds that CMS’ Lesser Reimbursement of Services Provided at Grandfathered Off-Campus Provider-Based Departments Was Improper