January 30th, 2020 marked a dramatic change in Medicaid funding, as the Trump Administration and Centers for Medicare & Medicaid Services (“CMS”) showcased a plan, called the “Healthy Adult Opportunity,” that would permit states to cap Medicaid spending. This was a blow to the Medicaid expansion under the Affordable Care Act (“ACA”), which expanded federal spending for low income individuals that did not previously qualify for the program.
Continue Reading ACA Medicaid Expansion Weakens: Trump Administration Unveils Optional Plan for Block Grants

On September 5, 2019, the Centers for Medicare and Medicaid Services (“CMS”) released a final rule with comment period entitled, “Program Integrity Enhancements to the Provider Enrollment Process” (the “Final Rule”). The Final Rule, aiming to “address various program integrity issues and vulnerabilities by enabling CMS to take action against unqualified and potentially fraudulent entities and individuals,” significantly expands CMS’ ability to deny or revoke the Medicare enrollment of providers (e.g., hospitals, skilled nursing facilities, home health agencies, hospices, etc.) and suppliers (e.g., physicians, therapists, ambulance services, durable medical equipment suppliers, etc.) in ways that may create concerns even for providers and suppliers who are fully qualified and have not engaged in any fraudulent conduct.
Continue Reading CMS Finalizes Rule Expanding its Authority to Deny and Revoke Medicare Program Enrollment, Among Other Changes

In a rare act of bipartisanship, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Ron Wyden, D-Ore., introduced on July 23rd a chairman’s mark, the Prescription Drug Pricing Reduction Act (PDPRA) of 2019 (the “PDPRA” or “Mark”), to lower the price of prescription drugs for Americans. According to the Committee, the Congressional Budget Office (“CBO”) projects that the PDPRA would save taxpayers more than $100 billion in Medicare and Medicaid spending over 10 years, lower Medicare beneficiaries’ out-of-pocket costs by $27 billion and lower beneficiaries’ premiums by $5 billion. The bill passed out of committee by a 19-9 vote on July 25th.

Reaction to the Mark has been mixed. For example, the Pharmaceutical Research and Manufacturers of America criticized the PDPRA as the “wrong approach to lowering drug prices” and predicts it will “siphon” billions of dollars away from research and development without benefitting seniors at the pharmacy counter. America’s Health Insurance Plans was “encouraged” by the Committee’s work and expressed its readiness to work with Congress and the Administration.
Continue Reading Is Prescription Drug Pricing The Cure For Partisanship?

Today, President Trump signed into law a sweeping tax reform bill passed by the House and the Senate on Wednesday that will materially affect virtually every sector in the economy, including, perhaps to a greater degree than others, the healthcare sector. Between the bill’s repeal of the Affordable Care Act’s individual mandate penalty tax and other pertinent provisions, we might reasonably expect to see:
Continue Reading President Trump Signs Tax Reform Bill Into Law

While September 30, 2017 has been an important procedural deadline for purposes of the GOP’s most recent legislative push to repeal the Affordable Care Act (ACA), it also serves a critical funding deadline for purposes of the Disproportionate Share Hospital (DSH) payment program. Absent legislative action, DSH payments are set to be reduced by $2 billion starting October 1, 2017.
Continue Reading Disproportionate Share Hospitals Facing Steep Payment Cuts

Some interesting presentations on the last day of the JPMorgan Healthcare Conference that concentrated on common themes – the increasing importance of ancillary business line to bolster core business revenue and of filling in holes to achieve scale and full-service offerings.

Genesis Healthcare – The largest U.S. skilled nursing facility (SNF) provider, which also is the largest provider of contracted rehabilitation services, had an interesting story to tell. It reminded me of the endless road trip, where you are trying to appropriately fill the time on the way to your destination, while the kids in the back seat keep asking “Are we there yet?”  For Genesis and, perhaps for the SNF sector, the rainbow at the end of the road is the U.S. demographic pot of golden age seniors.   With Genesis average SNF bed occupancy at approximately 88% over the last 3 years (higher according to Genesis than two large competitors Ensign and Kindred), we continue to see less utilization of SNFs then existing capacity, and beds continue to be taken out of operation. BUT, wait until 2025, when the Baby Boom has fully actualized and when according to Genesis predictions, demand for U.S. SNF beds will outstrip existing capacity.


Continue Reading Notes on Day 4 of the JPMorgan Healthcare Conference

Day 3 of the JPMorgan healthcare conference was one of striking contrasts between the old and the new. (And, by the way, the rain finally stopped for a day, but it will be back tomorrow to finish off the last day of the conference).

The Old:  Sitting in the Community Health Systems (CHS) presentation and listening to Wade Smith talk about the slimming down of CHS through the 20+ sales completed or in process, the audience could have heard this speech (with a few exceptions about the pending ACA changes) and not known if it was 2006 or 2016.  Very traditional hospital system presentation – admissions and revenue growth (or, as appropriate, losses), hospital market share, number of surgeries, physician recruiting, management of debt and expenses, etc.  All appropriate, but a marked contrast to many of the other hospital presentations this week with their emphasis on moving to risk, population health management, apps and patient engagement and brand.


Continue Reading The Old and the New – Day 3 Notes from the JP Morgan Healthcare Conference

Addressing the Social Determinants of Health:  Is the healthcare industry pushing a rock up a hill?  We collectively are trying to provide healthcare with improved quality and reduced cost, but the structure of the nation’s healthcare system remains heavily siloed with the social determinants of health often falling wholly or partly outside the mandate and reach of the healthcare delivery system. Bernard Tyson of Kaiser on Monday noted studies that health is determined approximately 30% by family history and genetics, with the majority of the healthcare impact coming approximately 40% from personal behavior, 20% from environmental factors and 10% from healthcare services.  So, the playing field, if the above numbers are correct, is tilted much more toward nurture, rather than nature.  While we are aware of some hospitals starting to provide housing or other limited services to address the needs of their community and therefore also to address healthcare cost containment, those examples are the exception to date, rather than the rule.
Continue Reading Food for Thought (and Health): Day 2 Notes from the JP Morgan Healthcare Conference

A large amount of wind, much discussion about the U.S healthcare, and the public getting soaked again – if you were thinking about Washington, DC and the new Congress, you’re 3,000 miles away from the action. This is the week of the annual JP Morgan Healthcare conference in San Francisco, with many thousands of healthcare operators and investors flooding Union Square again only to be greeted by one of the worst storms and floods in the recent history of the Bay Area.  Can’t help thinking about the coincidence of nature providing us with a metaphor for the possible upcoming repeal of the Affordable Care Act.
Continue Reading Looking Forward/Looking Backward – Day 1 Notes from the JPMorgan Healthcare Conference